Business

Consider travel insurance when making vacation plans

A girl wears a face mask as she play on a swing near the Yingwuzhou Yangtze River Bridge in Wuhan in central China's Hub
A girl wears a face mask as she play on a swing near the Yingwuzhou Yangtze River Bridge in Wuhan in central China’s Hubei Province on Jan. 29. (Associated Press)

With the news of the coronavirus that originated in China, many potential travelers can be nervous about making plans to leave the country.

In fact, the U.S. State Department on Jan. 31 advised Americans not to travel to China.

Travel insurance can give consumers peace of mind by protecting their purchase against potential canceled flights or changed itineraries.

Do your research first, however. Not all policies will cover cancellations for a health scare, say, or bad weather.

It is surprising how many people contact the BBB complaining about non-refundable tickets. While they may not be returned for a refund, you may be able to use the value toward a different flight although an additional fee may be charged.

It is important to fully understand the airline policies when making your reservation.

Whenever you’re making a big purchase, you have to decide whether you’ll protect your purchase with insurance.

The same decision applies when you’re planning a vacation — you will have to decide if you want to take the extra steps to protect it by purchasing travel insurance.

But how do you know when to buy it, and from whom?

First, understand what current coverage you have. Before considering travel insurance, you should find out what coverage you have on your existing insurance policies by contacting your health and car insurance companies, and your homeowner’s or renter’s insurance providers. Find out if you are covered in case of illness or theft, and if that coverage changes if you’re traveling internationally.

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This is especially important if you or those you are traveling with have health issues. Your health coverage or Medicare may need to be augmented.

You also may be able to purchase additional coverage through your current homeowner’s or renter’s insurance policy temporarily to protect expensive equipment, jewelry or other property you plan on taking with you.

Contact your current insurer to discuss your options.

What type of coverage is offered through your credit card company? If you use a credit card to make major purchases, instead of a debit card, typically you will receive additional protection for those purchases.

If you used a credit card to pay for some, or all of your vacation plans, contact the financial institution to find out what type of coverage is included. You also may have the option of purchasing travel insurance through the credit card company.

So, do you need additional coverage? Once you understand what coverage is offered through your current policies and credit card companies, determine what additional coverage you may need.

Are you covered in case of medical emergencies on your trip? What happens if you have to cancel?

Consider how much you are spending on the trip, and if you are prepared to take on additional financial burdens if something goes wrong.

You can expect to pay anywhere from 5 to 7 percent of the cost of your trip, according to the Insurance Information Institute. If you or someone you’re traveling with has health issues, there typically is a greater chance you will use the insurance. Travel insurance usually will cover some or all of the following:

• Trip cancellation or delay

• Lost or stolen luggage

• Emergency medical assistance

• Coverage for rental cars.

Be sure you understand every detail of the agreement, including the reason for trip cancellation or delay. Some travel insurance policies will not cover trip cancellation for reasons such as a health scare, terrorist attack or bad weather.

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Before buying travel insurance, know the difference between insurance and a cancellation waiver. According to the Insurance Information Institute, although waivers do provide some trip cancellation protection, they generally include more restrictions.

Always do your research. Before doing business or making a purchase, always research the company at BBB.org. Look for items such as any possible complaints and customer reviews.

Bobby Hansen is regional director for the Better Business Bureau Cedar Rapids office, (319) 365-1190.

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