Choosing Travel Insurance

There are a variety of types of travel insurance, including trip cancellation, trip interruption, emergency evacuation, accidental death and dismemberment and loss or damage to baggage and personal effects. Millions of dollars are wasted each year by travelers who purchase unnecessary travel insurance or travel assistance policies. Although these products may be valuable to some travelers in limited circumstances, you should check the terms and exclusions of any travel insurance or travel assistance policies carefully before purchasing them.

Buy Only the Insurance You Need

Frequently, several types of insurance are ''bundled" together and sold as comprehensive travel insurance. If, after reviewing this chapter and comparison shopping among several travel insurance policies, you decide to buy some type of travel insurance coverage, make sure you purchase only what you need.

Existing Insurance Coverage

The first question to ask yourself when determining what type of travel insurance you need is: "What kind of coverage do I already have?" In particular, consider the following:

• Your homeowner's or renter's insurance policies may provide liability or baggage and personal property protection while you are traveling.
• Your health insurance policy probably provides at least some coverage while you are traveling, but you need to check the specific limitations and exclusions of your policy.
• Your life insurance policy may cover accidental death or injury.
• Your automobile insurance policy may cover you while you are using a rental car.
• Your credit card may offer some protection, including loss damage waiver when you rent a car, or coverage if you want to cancel or change a flight.

Primary Versus Excess Coverage

Many travel insurance policies provide what is known as "excess" or "secondary" coverage. This means that if any other coverage can be applied to the loss first (such as homeowner's insurance if your personal property is stolen), then the travel insurance will provide coverage only for amounts not paid by the primary insurance, such as deductibles. Some travel insurance policies offer primary coverage, which is most useful when your own coverage is insufficient or has a very high deductible. The premiums you pay for primary coverage are generally higher than for excess coverage.

Beware of the Exclusions

The biggest drawback of travel insurance is that most policies contain a number of exclusionsand travelers often don't learn about the exclusions until they try to use the coverage. Whenever you review a travel insurance policy, check the exclusions and definitions carefully to determine how much protection the policy really offers.