A Guide to Travel Insurance

A sudden storm, a missed connection or a family emergency can turn a hard-earned vacation or important business trip into a big disappointment. Travel insurance can save the day, but picking the right coverage requires research, cost comparison and above all, reading the fine print.

A quick online search can make it easy to identify and price highly rated travel insurance carriers. But personal circumstances and coverage should be examined thoroughly before any trip reservations are made.

First, travelers should evaluate their own life, home, auto and health insurance coverage. It is wise to call personal insurance agents to discuss the future trip and its accommodations and activities. The idea is to see where personal coverage ends and where additional travel insurance might be beneficial.

Some travelers, for example, might be surprised to know that their homeowners' policy actually offers liability coverage for out-of-state or foreign trips and their health insurance might offer full or partial evacuation insurance. Credit card companies may offer additional protection. List specific risks and circumstances surrounding the trip to discuss with insurers to determine whether additional travel coverage might be necessary.

For business trips, employees should repeat this process with their benefits or human resources departments. Employers that regularly do business in risky areas where crime, geopolitical conflict or rough weather are common may have specific systems in place for these issues. But it is important to know how extensive an employer's protections might be to determine whether you'll need additional coverage.

Travel insurance covers these main risks: trip cancellation and/or trip interruption, baggage loss, medical and/or dental, pre-existing (medical) conditions and evacuation (medical or otherwise).

It is difficult to cite average premiums for trips because every trip and traveler is different. Coverage for short domestic trips with basic coverage for cancellation or lost baggage might cost some money; comprehensive coverage for a major world excursion may go well into the hundreds.

Travel companies like airlines and cruise lines sell various forms of trip insurance, but it might be wise to buy directly from an actual insurance company in the travel insurance business, better known as a "third-party" carrier. While travel insurance sold by travel companies might be adequate, they generally cannot match the quality of coverage or customer service that a full-time insurance provider can.

Before you buy travel coverage, it is particularly important to know what the policy's exclusion clause says. That section of the travel insurance policy indicates particular activities or circumstances that will prevent the payment of a claim.

Insurance companies respond to claims when customers file documents properly. Travelers who need to make a claim should have copies of receipts, ticketing and paperwork relevant to losses such as flight delays, lost luggage or any other potential loss indicated in the policy. If the claim is the result of a criminal act, policyholders should make sure they obtain and file copies of police, hotel or other relevant documentation safely.

Finally, it never hurts to visualize potential risks on an upcoming trip. Quick online searches make it easy for travelers to check on weather and potential conflicts at their destination. The U.S. State Department features its own global travel alert and warnings webpage (http://travel.state.gov/content/passports/english/alertswarnings.html) to prepare travelers for local crime, terrorist attacks or geopolitical conflict. The U.S. National Weather Service also features sites for long-term storm and hurricane prediction, though travel insurers will generally not issue coverage after a particular storm system is named.

Bottom line: Travel insurance can be a financial lifesaver. However, it's important to thoroughly evaluate such coverage in light of personal and business coverage you already have and, most of all, to read the fine print.