If you had a recent trip cancelled due to snow or bad weather, you may be considering travel insurance for your spring getaway. But beware – every offer you get for travel “protection” may not be travel insurance coverage. In a bad economy, insurance fraud can be costly to uninformed consumers hoping for better protection of their investment. So, before your buy travel “protection,” the National Association of Insurance Commissioners (NAIC) offers these tips and considerations you should review.
Do I Need Travel Insurance?
Travel insurance may not be appropriate for all trips and you may have
some coverage from policies you already have – such as a life, health or
homeowners/renter’s policy. Read your policy or speak with your insurance
agent or company to find out more about what personal property and medical
coverage you already have that could provide protection while you’re
After finding out what coverage you already have, ask yourself the following questions to help decide if you will benefit from the added cost:
All companies and agents selling travel insurance must be licensed in the state where you are purchasing the policy. While considering whether you will benefit from the insurance, also stop to investigate where you are considering buying the policy.
Marketing and sales material for fraudulent coverage is often difficult
to distinguish from real insurance coverage. So, to protect yourself –
STOP before you write a check for the premium or sign the
application and CALL your state insurance department to
CONFIRM that the agent and company are licensed in your
state. Many insurance departments also make this information available
online. Find a link to your state insurance department here.
What Are the Major Types of Travel Insurance?
There are two main types of travel insurance. The first type, commonly
called trip cancellation insurance, protects against the loss of
non-refundable travel costs – like airfare, hotel or tour expenses. So if
you’re making a deposit on a cruise or have non-refundable airline
tickets, this would be the type of coverage you’d consider.
The other type of travel insurance offers protection against loss due
to medical emergencies, damage to personal property or death that occurs
while you are traveling.
Trip Cancellation/Delay/Interruption Insurance
Travel insurance generally covers a very specific list of reasons for cancellation, delay or interruption. Before you buy a policy make sure you’ve reviewed these situations carefully.
Medical/Accidental Death Insurance
When considering a medical or accidental death travel policy, ask about
pre-existing conditions and age limits. How companies deal with
pre-existing conditions can vary widely. Read the terms of coverage
carefully if you have a pre-existing condition and be prepared to pay a
higher premium to cover them. Some insurers also charge more for older
Baggage/Rental Car Damage Insurance
Homeowners or renter’s insurance may cover baggage or personal property damage when you’re traveling and your auto insurance may extend to a rental car, but you should always check the terms of your current policy or ask your insurance agent or company.
Is a Waiver the Same as Insurance?
Cruise and tour operators may offer Cancellation Waivers. Keep in mind
that waivers are not insurance policies and are
not regulated by the state, and therefore do not have the same
consumer protection as a travel insurance policy. Read all of the
restrictions before you buy a Cancellation Waiver.
What Red Flags Should I Watch For?
Here are some warnings against possible fraudulent policies:
Just remember, if it seems too good to be true, it probably is!
What Should I Check Before I Buy?
If you have questions about your insurance coverage, contact your state insurance department. Visit www.NAIC.org for contact information and Web links to your state insurance department.
Get smart about your insurance needs! For more information about auto, home, life and health insurance options – as well as tips for choosing the coverage that is right for you and your family – visit www.InsureUonline.org.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more consumer information, visit insureUonline.org.
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