Vacation Dream vs. Nightmare
Many people suffer through the winter season, crossing the days off the calendar until their spring vacations. While their vacation dreams keep the winter blahs away, only about a third of them will take steps to ensure their travel doesn’t become a nightmare.
“Vacations can become very expensive, and many people spend a lot of time saving for a trip, and many of them think buying travel or rental car insurance will unnecessarily eat into their fun,” says Angie Hicks, founder of Angie’s List. “But if they have to cancel their trip or if they crash the rental car, they could be out thousands of dollars — and that could have a long term financial impact.”
In a recent nationwide Angie’s List poll, 76 percent of members say they plan to travel in the next six months. A third of poll respondents say they’ve had to cancel a trip in the last five years.
“Consumers should do at least a little planning before they jump in the car or head to the airport,” says Hicks. “It’s good to set a budget for travel and lodging costs, as well recreation and entertainment during the trip so you don’t break the bank and come home to bills you can’t pay. Depending on where you’re going and what cancellations costs are, consumers may be smart to buy travel insurance. Most people assume they are covered no matter where they are, but many policies won’t cross the border with you.”
Hicks says weigh these factors when determining if travel insurance is right for you.
• Expensive trips: Do you risk losing more money than you can afford?
• Trips that are a long way off: Planning a trip a year or more in advance leaves plenty of time for problems to come up.
• Complex plans: Will one snag derail your entire trip?
• International flights: A fee to change a domestic flight is usually small compared to one for an international flight.
General types of coverage include the following.
• Trip cancellation: This is the most common type of travel insurance. It generally covers non-refundable payments if a trip is canceled or interrupted due to unforeseen circumstances such as a sickness, death in the family or another matter listed in the policy.
• Trip delay: This coverage provides reimbursement when a trip is delayed.
• Emergency medical/health expenses: Many HMO medical policies do not cover travel abroad. Medicare almost never covers healthcare in a foreign county.
• Lost baggage: This would provide coverage if your personal belongings are lost, stolen or damaged during a trip.
“Travel insurance policies vary greatly so it pays to compare among companies,” says Hicks. “Policies can cost on average 5 to 9 percent of the total trip expense depending on coverage levels.”
To get the best deal Hicks says to consider these tips:
• Check your current coverage: Check your health, life and homeowners insurance. You may find you’re already covered. Also many airlines still re-book or give credit for canceled flights.
• Shop around: There are many companies that offer insurance to choose from so do your research. Check online and with travel agents. Be careful of protection plans offered through tour companies and cruise lines. In many cases, you won’t be covered if the company goes bankrupt.
• Read the fine print: Before you buy, make sure the risks you want to cover are covered. Also in most situations, it pays to get your insurance immediately after booking a trip because many exclusions kick in after a certain period of time.
Travelers may rent a car to help get around while on vacation, and they’ll be asked to purchase insurance from the rental car company. The car rental company will likely offer a Collision Damage Waiver (CDW). This covers the cost of damages to the rental car if you’re involved in an accident. This is what the rental car company charges you for the money and time it lost since the vehicle could not be rented.
“Insuring a rental car can be confusing,” says Hicks. “You want to make sure you’re covered if you’re involved in an accident, but you don’t want to pay for coverage you already have.”
Hicks says consider these factors before renting a car:
• Check your auto insurance policy: You might already be covered. Your existing policy should include liability, comprehensive and collision coverage for rental vehicles.
• Check your credit card company: Many card companies offer this insurance if you pay for the rental using one of their cards. Be sure to read the fine print. Some cards only offer coverage if you rent from a particular agency or only provide coverage on certain cars.
• Check your homeowners insurance: If you’re worried about theft of your belongings, check to see that what you’re packing is protected.
Get more information and consumer tips at www.angieslist.com.