How to Compare Travel Insurance Coverages
Imagine planning your vacation -- you purchase your plane tickets then make your hotel reservations. Perhaps you purchase a cruise or an expensive tour. Something comes up, however, and you can't make the trip. Unfortunately, in this scenario, without travel insurance, you will lose your money. Trip insurance protects you from losing money spent on travel arrangements because of unexpected events or circumstances. It can't salvage your vacation, but it can protect your finaces. Does travel insurance sound good? It should. Take caution, however, because if you purchase the wrong travel insurance, you'll still lose your money.
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Instructions
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Determine if your insurance agent has the proper licensing to sell insurance plans by visiting NAIC.org. The National Association of Insurance Commission keeps a directory of icensed insurance brokers and allows people to search its database. Make sure you don't shop from a fraudulent, unlicensed insurance company that will not pay your claim.
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Compare the exclusions found in the insurance terms and guidelines that commonly include travel warnings or adverse weather or events (acts of God). Exclusions include any event that renders your travel insurance null and void. Stay apprised of government-issued travel warnings. If your government issues a travel warning and you cancel your trip, you will lose your money. Additionally, travel-insurance does not cover sudden extreme weather like hurricanes, blizzards or catastrophes like earthquakes.
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Ask the sales representative or read the policy guidelines to determine if the travel insurance qualifies as actual licensed insurance or if the company simply calls it a travel protection plan. State regulations protect consumers of insurance, but they do not govern protection plans. If you purchase actual "ravel insurance, your state's Department of Financial Services will investigate the claim and help you get your money according to the terms outlined in the policy guidelines. If, however, you purchase a protection plan and the company refuses payment, you have no legal recourse other than filing a complaint with a consumer advocate group or with the company's customer-service department.
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Determine whether the travel insurance protects all your annual travel arrangements or if it simply protects a single trip. Annual travel insurance protects insures your travel for an entire year, but individual-trip insurance ends on the date specified by you indicating that you have completed your travels.
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Tips & Warnings
Look for a Cancel for any Reason Policy (CFRP) that allows you to cancel your trip arrangements for any reason including travel warnings or acts of God.
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