Popularity of travel insurance grows along with global uncertainty

(This article originally ran in New Orleans CityBusiness, New Orleans, LA, another Dolan Media publication.)

Travel insurance is becoming as common among globetrotters as passports and luggage, according to a recent study.

More than 17 million Americans spent better than $1 billion on travel insurance in 2004, according to Avalon Actuarial Consulting, an independent Canadian firm. The report for the nonprofit U.S. Travel Insurance Association is the first study of its kind.

The findings confirmed that more Americans are choosing to protect their travel investment with comprehensive travel insurance plans, said Jonathan Ansell, USTIA president.

Travel insurance protects the money people invest in bookings as well as their health while vacationing outside the United States.

It covers costs for travelers who must cancel or interrupt a trip as well as costs related to delays, baggage loss and rental car damage. It also protects travelers in case of emergency medical treatment, medical evacuation or accidental death.

According to Ansell, the terrorist attacks of Sept. 11, 2001, created significant changes in the U.S. travel insurance industry.

In the uncertain months following the terrorist attacks, travel insurance played a vital role in restoring travelers' confidence, Ansell said. As a result, we have seen an unprecedented surge in the awareness of travel insurance.

The USTIA estimates that 30 percent of the 10 million leisure travelers taking cruises, tour vacations and international trips bought travel insurance in 2004. This is about triple the estimated 8 percent to 10 percent who bought travel insurance before the attacks.

Travel insurance is available through travel agents, airlines, cruise lines, tour operators, credit card companies, insurance brokers and over the Internet.

Ansell said Americans most often buy cancellation insurance when traveling internationally or on cruises. More than 80 percent of all travel insurance plans purchased last year included coverage for trip cancellation, according to the study.

Jill Wall, owner of the New Orleans travel agency Vacations at Sea, said most people buy travel insurance in the event they need to cancel their trip but it also covers any gaps in personal insurance.

Nan Goldwasser, spokeswoman for the Cruise and Vacation Shoppe in Metairie, La., said about 75 percent of people who book trips through her company buy travel insurance.

The main reason people buy insurance is for cancellation and medical emergencies. Things happen all the time and we highly recommend it. If someone has to cancel their trip we don't want them to lose their money, but we want them to be protected on their trip as well, Goldwasser said.

Travel insurance kicks in if a traveler or someone close to them faces a medical emergency and they have to cancel or leave their trip.

The insurance will generally cover the cost of the canceled trip up to $10,000 for medical expenses and $25,000 for medical evacuation if someone must be airlifted, she said.

Wall said travel insurance is extremely popular with people who book cruises because they must book them at least two months in advance.

There are several things that can happen that might cause them to change their plans. For instance if their doctor says they can't travel or if they have to stay home to take care of a family member who may have fallen ill or been in an accident, the (travel) insurance would cover the cancellation, Wall said.

The cost of the insurance depends on the trip, who sells it and factors such as the individual's age and cost of the trip, Goldwasser said.

With cruise lines, the cost is either a flat rate or based on the fare.

Carnival Cruise Line charges $49 for travel insurance for adults and $29 for children on its four-day cruises, $59 for adults and $39 for children for five-day cruises and $99 for adults and $59 for children on seven-day cruises, whereas Royal Caribbean charges based on the fare.

If the cruise costs less than $500, insurance will cost $29 per person. The insurance escalates to a maximum of $369 per person for cruises valued at greater than $5,000.

Royal Caribbean's travel insurance covers trip cancellation, interruption, delay and medical expenses up to $10,000, emergency evacuation up to $25,000, lost baggage up to $1,000 and 24-hour worldwide emergency assistance.

When you put thousands of people on a ship, the odds are something is going to happen. When people are on vacations, especially cruises, people do things they're not used to doing. You see broken bones, heart attacks and the things that afflict people in everyday life. It's just wise to be able to protect yourself, Goldwasser said.

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