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Buying Travel Insurance

Ease your travel fears with insurance that'll cover everything from medical problems to weather disasters.

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More than a third of vacationers will purchase travel insurance coverage this year, roughly triple the number in 2001, according to the US Travel Insurance Association.

Trip-cancellation coverage is the main reason people buy the protection. You might, for instance, fall and break your ankle just before a planned bike tour through France's Loire Valley.

But insurance is not just for unexpected medical mishaps. For many hitting the road this summer, the boom is fueled by fears of hurricanes and terrorist attacks. Moreover, in recent years airlines have made it tough to recoup airfares on canceled tickets, and tour operators, too, have cracked down.

"We absolutely recommend it, and in fact, we automatically calculate the premium and offer it as an option on every deposit," says Mollie Fitzgerald, the co-owner of Frontiers International Travel, a Wexford, Pa., agency. "It's a good thing, believe me."

It's not cheap. The average price of a policy is between 5 percent and 10 percent of the total trip cost and covers trip cancellation or interruption, medical bills, and lost luggage. Pricing is based on the cost of your trip, your age, how long you're going to be traveling, and the type of trip. Insuring a rhino-tracking trip in the Namibia desert, not surprisingly, is steeper than a RailEurope excursion. Plus, there are exclusions, including pre-existing medical conditions and age restrictions.

At Frontiers, for example, a policy from insurer Travelex for a $3,000 trip will run you about $240. In addition to cancellation coverage, the protection includes $1,000 for a trip delay or a missed connection, $250 for an itinerary change, $500,000 in medical expenses (including medical evacuation), $2,500 for lost luggage, and $600 for baggage delay.

Deciding whether to buy insurance is tricky. It depends on the cost of the trip and the odds of bailing out at the last minute. Cancellation penalties for airlines and hotels vary widely.

You're also likely to have partial or complete coverage when you're away from home through insurance you've already acquired, according to Carolyn Gorman, vice president of the Insurance Information Institute. Your health insurer will typically cover medical emergencies in the U.S., but you'll want to check rules for out-of-network care and HMO restrictions. Homeowner's or renter's policies should pay to replace lost or stolen luggage, less the deductible. Airlines do pay up to $2,800 for lost bags within the U.S. In addition, most credit card issuers offer cardholders some insurance to cover a range of travel risks.

In general, you should consider adding the insurance if you have a nonrefundable, prepaid cruise or international excursion. Then if you have to cancel because you or someone in your family gets sick or bad weather makes travel impossible, you're saved from losing a fat deposit, or the cost of the entire trip in some cases.

Some reliable insurers include Access America, Travelguard International, and Travelex Insurance Services. To compare policies and prices, visit www.insuremytrip.com. And to ensure a smooth claims process, be sure you understand the fine print of your policy ahead of time.

Other considerations: For overseas medical emergencies, check with your health insurer about any restrictions. In general, you'll pay out of pocket initially and submit your claim when you return home. Some insurers cover emergency medical evacuation as well. If not, depending on where you're traveling, you might opt for a medical evacuation policy, such as MedjetAssist, which costs $75 for seven days of coverage and provides a flying ambulance evacuation from any hospital back to your home city in the United States.

On international flights, airlines are frugal with lost-luggage coverage, reimbursing at a rate of around $9.07 per pound, up to $635 per checked bag. In truth, it's rare for a carrier to truly lose your bags. Your goods may get waylaid, but they usually make it back to you, and insurance probably won't ease your dismay at wearing the same outfit for three sweaty days.

SecondAct contributor Kerry Hannon is a Contributing Editor for U.S. News & World Report and the author of Whats Next? Follow Your Passion and Find Your Dream Job.

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