The ocean breeze fills your nose as the sun turns your pale skin into a golden hue - could this vacation be any sweeter? But suddenly, clouds block out the rays and a thunderous bolt of lightning sends you scurrying to gather up your towel and island drinks amidst drenching rain and pounding waves. Your vacation is ruined! It's a good thing you bought travel insurance ... or is it? Did you get hurricane coverage? Or did you skip that extra $20 amendment? Don't let a simple oversight destroy your vacation. In this article, we'll show you why you should increase your policies before you take your vacation, along with which coverage you should avoid.

Tutorial: Introduction To Insurance

Even the Best Laid Plans Can Go Awry
Travel insurance provides a way to anticipate the unexpected. It can help you protect against a myriad of events, including weather-related issues, baggage loss, airline delays and cancellations, accident or illness, and much more. There are policies available to cover every eventuality, including missing your tee time on the golf course. Some policies even give you the option to cancel your trip for any reason at all.

In addition to protecting you against losing the money that you spent on your trip, there are policies available that provide medical coverage too. Medical expenses can be a particularly important part of travel insurance coverage, as many health insurance providers do not provide services if you're outside of your country of origin.

Ensuring You're Insured
Nobody wants to think about the worst-case scenario when planning a trip, but there are a whole host of reasons why you might need some protection. Tropical storms, such as hurricanes come immediately to mind. Destinations in hurricane prone areas may offer their own guarantees, ranging from money-back offers to credit for a return trip. Travel agencies that book a lot of trips to these areas may also offer some type of coverage, as do cruise ships. (Read Cruise Ships: Reining In Vacation Spending for insight into an economical way to travel in style.)

Floods, fires and other natural disasters either at home or at your intended destination may also prevent you from making your trip. Less severe, but equally disrupting, is the prospect of a rainy weekend at the beach, a broken down car or traffic on the way to the airport. Personal injury, the need to attend a funeral, an unexpected job interview or the illness of a travel companion could also cause you to cancel. Terrorist activity, even in popular European destinations, could also force you to change your travel plans.

Check Your Existing Coverage
Before you shell out the equivalent of 5-8% of the cost of your trip for insurance, be sure to check if you have existing coverage from other sources. Hotels and cruise lines may offer at least some assistance with the cost of your accommodations. Travel agencies may cover even more. If you used a credit card to pay for your trip, the credit card company (particularly if you used a gold or equivalently ranked card) may even provide similar insurance at no extra cost. Your homeowner's or renter's insurance policy may also cover lost luggage. (To read more about this type of insurance, read Insurance Tips For Homeowners and Insurance 101 For Renters.)

An existing life insurance policy should already cover you in the event of death, and it may cover serious health issues as well. (To learn how to read your current policy, see Understand Your Insurance Contract and Exploring Advanced Insurance Contract Fundamentals.)

Shop Around
Your existing coverage may not pay if you miss a flight and need to change airlines and book new tickets. Likewise, the cost of a hotel room may not be covered if you are stuck at the airport. Rental cars are another potential cost if you need to find an alternate way home or to your destination. Think through your trip carefully and put together a list of items you would like to have just in case something doesn't work out as planned.

To get the coverage that you need, you can contact your travel agent or shop online, but whatever you do, buy from a reputable insurer that offers round-the-clock assistance. That internet bargain may not be such a great deal if you are stuck in the path of an approaching storm and don't have anyone to call for help. You'll also want to compare prices to make sure you aren't overpaying. The most convenient source of insurance may not always be the best priced.

Just as there are policies available to cover nearly every eventuality, there are pages and pages of fine print that include provisions, such as how quickly you must file a claim and how close to your destination a particular storm must hit in order for your policy to pay the claim. Make sure that you read all of the information the insurer provides. You want to know exactly what is covered, what isn't covered, how to file a claim and what happens if the trip is canceled. Some policies reimburse all of your costs, others have a cap on the amount they will pay or pay only a percentage of your expenses. Certain policies don't reimburse you, but do provide a travel voucher that can be used at a later date. (To find out which policies you can avoid, read Fifteen Insurance Policies You Don't Need.)

Just in Case
Plenty of people take trips every year without encountering any difficulty at all. While the added expense of vacation insurance may not be worth the money if you are taking an inexpensive trip or have booked at the last minute and leave in just a few days, the peace of mind that it offers may be just the ticket you are looking for if you have just booked the trip of a lifetime or if your departure date is still months in the future.

For more insight on how to minimize your risks while on vacation, read Travel Tips For Keeping You And Your Money Safe.

Related Articles
  1. Retirement

    Strategies for a Worry-Free Retirement

    Worried about retirement? Here are several strategies to greatly reduce the chance your nest egg will end up depleted.
  2. Markets

    The 5 Biggest Canadian Insurance Companies

    Learn more about the insurance industry as a whole, how it functions in Canada, and the five largest Canada-based insurance companies.
  3. Savings

    Best Places to Exchange Currency in Boston

    Since the nation’s first colonial currency was established in Revolutionary War-era Boston, the city’s currency exchange situation has come a long way.
  4. Personal Finance

    Finding Cheap Airline Tickets: An Insider’s Guide

    If understanding airline pricing feels like decoding riddles, arm yourself with these six simple strategies to land the best value ticket available online.
  5. Credit & Loans

    Travel Tips: Avoid Exchange Rate Headaches

    How to avoid the most common issues and hassles raised by exchange rates while traveling abroad.
  6. Personal Finance

    JetSuite Simplifies Private Jet Rental

    Chartering your own plane just got a bit more affordable.
  7. Insurance

    How to Shop for Home Insurance

    Tips for getting the best protection for your place and possessions.
  8. Personal Finance

    Best Ways to Exchange Currency

    How to avoid fees and get the best deal for your dollar.
  9. Investing

    Things Nursing Homes Are Not Allowed to Do

    What rights do a home's residents have? The same ones they they had before they entered the facility.
  10. Retirement

    How Much Medicaid and Medicare Cost Americans

    Medicaid & Medicare cost Americans plenty out of their paychecks. But how much, really? And what does that money buy?
RELATED TERMS
  1. Comprehensive Glass Policy

    An insurance policy that covers glass that has been broken or ...
  2. Coastal Barrier Improvement (CBI) ...

    A federal law that makes federal disaster relief and federal ...
  3. Net Collections

    A term used in medical accounting to describe the amount of money ...
  4. Directors And Officers Liability ...

    Directors and officers liability insurance covers you if you're ...
  5. Corridor Deductible

    Expenses that are paid by the insured in excess of an insurance ...
  6. Distribution Clause

    An insurance policy provision which determines how the coverage ...
RELATED FAQS
  1. What happens if my insurance claim falls below the deductible level?

    Though the ins and outs of health insurance are often confusing, the concept of the insurance deductible is relatively straightforward. ... Read Full Answer >>
  2. How is the deductible I paid for my insurance claim treated for tax purposes?

    The deductible you pay on your health insurance policy may be tax-deductible if you meet certain conditions. However, whether ... Read Full Answer >>
  3. What are the main factors that impact share prices in the insurance sector?

    The main factors that impact share prices in the insurance sector are interest rates, earnings and actuarial risk. In the ... Read Full Answer >>
  4. Why do insurance policies have deductibles?

    Insurance policies have deductibles for behavioral and financial reasons. Moral Hazards Deductibles mitigate the behavioral ... Read Full Answer >>
  5. Can I buy insurance to reduce unlimited liability in a partnership?

    Partnership insurance is actually quite common. Most of the time, partners buy insurance to safeguard against the possibility ... Read Full Answer >>
  6. Which emerging markets are seeing the strongest growth in the insurance sector?

    The emerging market economies seeing the strongest growth for the insurance sector are primarily the main emerging market ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!