I originally wrote this article for the February 2008 Wide World Books & Maps Newsletter. If you click on the logo, you will find yourself at Wide World's site where you can view or purchase great travel books and gear. -Terrell

Hedging Your Bet: What You Really Need to Know About Travel Insurance

The choir I sing with is in the process of finalizing plans for a singing tour of Spain. We’re hoping to take a large (around 50 people) and diverse group (ages 26 to 70 plus) to Europe for two weeks of tourism and performances. Naturally, the arrangements are complicated and the choir will be requiring a substantial up-front deposit. No problem, say I, except for one thing. This trip will take place in the spring of 2009. Wait, you want me to give you a deposit for a trip 15 months away? How am I supposed to know what the world (my world in particular) will be like that far in the future? Which leads me to an inescapable conclusion: I’m going to have to behave like a grown-up and buy some travel insurance. Yes, it will be my first time to buy it. No, I don’t know much about insurance. Yes, you may be able to benefit from my research.

The First Thing You Have to Know…you can get travel insurance to cover various kinds of problems.

•  Trip Cancellation or Delay - Once I make a non-refundable deposit, I’ll want trip cancellation coverage. That means I’ll buy enough insurance to cover the money I can’t get back if I have to cancel the trip for some covered reason like breaking my leg or my elderly mother getting seriously ill. As we get closer to the trip date, I’ll have additional outlays like the full cost of the tour and a plane ticket so I’ll want to add additional coverage to make sure I can recover those expenses. I’m also planning to spend a few days on my own in Europe after the tour is over, but I’m not adding any coverage for that part of the trip because I’m not planning to prepay any hotels or transportation for those days. I only want to buy enough insurance to cover money I’ve already laid out and probably can’t have refunded.

• Medical - I also want to make sure I’m covered for any medical emergencies. I’m a healthy person, I’m not planning to engage in any risky behaviors, and I’m traveling in a country with good medical facilities so I’ll look for a budget amount of coverage: enough to pay for treating a broken leg and making sure I can get back to the States, for instance, which will keep my premium low.

• Loss or Theft of Personal Property - When I travel I make a point of never bringing things that I can’t afford to lose like jewelry or expensive clothes. On this trip, however, I will be bringing along my latest toy, a Canon digital SLR. That means that I will be looking for a policy that covers the loss or theft of personal items so I can replace that camera if I need to.

The Second Thing You Have to Know…you may already have some coverage.

Before you commit to any travel insurance policy, you should check to see what coverage you already have.  First, check with your health insurance provider. If you’re traveling in the U.S., you’re almost certainly covered but if you’re going abroad you may not be. Even if your policy does cover medical expenses outside the U.S., you may need emergency evacuation coverage to get you to a hospital that can provide a certain standard of care. Next, call your credit card company and get them to tell you exactly what coverage they provide for things like car rentals or airplane tickets. Every card is different so don’t assume your Master Card covers you for something just because your friend’s did. Finally check your Home Owner’s or Renter’s policy to see if you are covered against theft while traveling. Some do, some don’t and you won’t know unless you ask. Once you’ve got all these answers, you can make an informed decision about how much travel insurance you really need to buy.

The Third Thing You Have to Know…READ THE FINE PRINT!

I’ve spent hours perusing travel forums, talking to knowledgeable people and reading advice articles and I have determined that most of the well known insurance companies do an equally good job. If you’ve shopped at Wide World Books, you’ve probably seen brochures for Access America or maybe you’ve noticed links to them on our website. We recommend them because people in the store have used them and been happy with their services; there are also other good companies out there. Most of them also offer round-the-clock assistance hotlines that can help you find a new flight after a missed connection or an English-speaking doctor to treat your weird rash. The trick, according to my research, is not to choose the right company but to make sure that you choose a plan that specifically covers your situation.

In my case, since I’m concerned about buying so far ahead of time in an uncertain world, I will look for a plan that allows me to cancel anytime for any reason. If you have a pre-existing medical condition, look for a plan that includes a waiver for that condition and be sure to buy within the prescribed time frame. If you’re planning to go snowboarding, buy coverage that includes sporting activities. You can go to an insurance comparison site like www.insuremytrip.com to get an idea of the different products out there but it is still your responsibility to read the fine print. Almost all the complaints I read on the travel forums came from people who thought they were covered for something when a careful reading of their policy would have shown they weren’t. Of course, you can’t insure against everything, but you can make sure that you’re covered for the things that worry you the most.

The Fourth Thing You Have to Know…the higher the risk, the more you’ll pay

So how much is travel insurance really going to cost me? To get the coverage I really need, since my trip is not very risky or expensive and I’m still in a reasonable age bracket, my premium (as of this writing)will be around $100. Some of the other choir members will pay more because they’re older or have health conditions. They’re also much more likely to actually make a claim than I am so the higher price seems reasonable. If you’re going heli-skiing in the Himalayas, you’ll pay a much higher premium but you may really need that million dollar emergency evacuation benefit. The rule of thumb with travel insurance is that you should insure anything you can’t afford to lose. For me, the bottom line is will you sleep better if you know you’re protected? In this uncertain world you just have to weigh the risk and then pay the price that makes you comfortable.