Travel Terror? Don't Count on Insurance

Aug. 28, 2006 — -- The airport chaos, the canceled and delayed flights, and the lost baggage that surrounded the recent terror alert in Britain disrupted the plans of thousands of American travelers in the United States and abroad.

That served as a reminder that travel insurance could help ease the pain -- but not in every case.

In fact, consumers should be aware that where the word "terrorism" is concerned, travel insurance is often about what is not covered.

Since Sept. 11, 2001, a growing number of Americans have purchased travel insurance from dozens of companies, in the hope of recovering the cost of delayed or canceled trips in the new reality of air travel over the last five years.

What's covered?

"Well, that's a good issue," travel consultant Terry Trippler said.

"People have to be very careful about this insurance," he said. "It's so easy to just purchase it and think you are covered, and then find out about the exceptions."

The theory of travel insurance is that it will pay you what the airlines or others won't reimburse.

Most policies exclude terrorism. Those that include terrorism often have restrictions.

Some will reimburse you for canceled travel only if a specific city on your itinerary is hit by a terrorist attack within a month of your planned departure.

The attack could occur in the same country, but if it doesn't happen in the same city, consumers are out of luck.

Take the 2004 train bombings in Madrid, Spain. If you were traveling to Barcelona, you might not have been covered.

Worry simply isn't protected.

Trippler says that in the case of the recent strike threat by Northwest Airlines flight attendants, that might not have been covered.

It could have been called, he said, a pre-existing condition.

There is a wide range of travel insurance policies that cover everything from canceled trips and medical emergencies to lost baggage and canceled hotels.

As Tropical Storm Ernesto moves toward the Gulf of Mexico, however, it's important to remember that you might not be covered unless a hurricane hits exactly where you're going.

There are usually requirements that policies be purchased well in advance of departure.

A traveler can't buy a policy once the hurricane is forecast and expect to be covered -- or purchase the policy after a terror alert and then cancel a trip.

On the positive side, many of these restrictions are clearly listed on Web sites offered by the brokers who sell travel insurance offered by underwriters.

Some of the most popular are InsureMyTrip.com and Total Travel Insurance.

During the problems in London, many of their companies covered hotel rooms and meals. Many did not cover the cost of canceling a trip.

Travel policies are priced based on the cost of a trip. There are numerous levels of coverage depending on how much a consumer is willing to pay and what that consumer wishes to insure against.

There are some things companies simply will not insure, such as the cost of a ticket purchased from a financially troubled airline that may suddenly stop operating.

In these days of restricted carry-on baggage, though, luggage seems a safe bet.

While airlines restrict what they will reimburse, many travel insurance policies will reimburse as much as $2,500 or $3,000 for the contents of lost luggage.

Trippler cautions that like airline coverage, "reimbursement for misplaced, lost or damaged luggage is a surprise."

The insurance company will ask, "Where did you get it? How much did you pay?"

"And they will then depreciate it for past use," Trippler said.

His words of advice are simple: "Know what you're buying before you buy it."

Trippler's Labor Day Travel Tips

Pack light: Take less clothing and launder it.

Pack smart: Leave no valuables or medications in checked bags -- only in carry-on.

Phone contact: Give the airline your phone number -- including cell number.

Online check-in: Check in online and print boarding pass from home if possible.

Photo ID: Have picture identification. Take an extra, if possible, and keep in separate location.

Baggage ID: Put name and phone number (preferably cell) on inside and outside.

Airport arrival: Arrive at least two hours before scheduled departure.

No liquids: You cannot take liquids through security or on the plane. Check with www.tsa.gov for details.

Gate arrival: Be at the gate and ready to board at least 30 minutes before scheduled departure.

Return home: You may be at a less-familiar airport, so allow extra time.