Vacation Plans Got You Stressed? Try Travel Insurance

A passenger jet shot down over Ukraine. War in the Middle East. Polio and Ebola outbreaks around the world.

The elements that make travel so enticing — strange lands, unfamiliar cultures and extraordinary circumstances — are the very qualities that can make it risky. Travel insurance can protect you from some risks — illness, accidents, canceled tours, theft — and buying it could be the most inspired travel decision you make.

Only you can decide how much potential trouble is inherent in your travel plans. Start by considering how much of your trip cost is prepaid and/or refundable, your destination’s safety, your health status and, finally, how much coverage you’re already offered through your medical and homeowners/renters insurance and credit card.

Prices for coverage can vary, with age being the biggest factor. Most packages cost between 5 and 12 percent of your total trip cost.

Here are some things to consider:

Trip cancellation and interruption insurance

Since it’s expensive to cancel or interrupt travel, this is a practical way of mediating risk for a fraction of the cost of your trip. But before purchasing this type of policy, check with your credit card company to see whether it provides any coverage for flights, tours or other activities bought using that card. Also, find out what the insurer considers acceptable reasons for cancellation or interruption.

Medical insurance

If you’re traveling outside the U.S., find out if you’re covered by your existing health plan before purchasing a travel medical policy. Many U.S. insurers — but not Medicare — offer some type of coverage for trips abroad. Be aware that you most likely will have to pay in advance and get reimbursed later. Even if you have some coverage, you can purchase supplemental or secondary policies to cover expenses beyond your plan’s scope, such as deductibles.

Other types of insurance

Evacuation insurance covers the cost of transporting you to the nearest appropriate medical facility should illness or accident befall you while abroad. Your existing health plan typically won’t cover this. Before purchasing such a policy, ask about activities that aren’t covered — skydiving, mountain climbing, skiing, etc. — as well as the expenses covered before and after you arrive at the hospital.

Baggage insurance usually can be included in a travel insurance package. Remember that checked luggage is already covered by the airline up to a certain dollar limit, and your homeowners/renters insurance might offer additional coverage as well.

Flight insurance is essentially a life insurance policy for an airplane trip. With flying fatalities so rare, buying such coverage is a statistical long shot.

Finally, with most rental car companies, you are responsible for damage and theft of the vehicle. You have three options: buy a collision damage waiver through the rental company; add collision insurance to your travel insurance package; or pay for the rental with a credit card that offers coverage.

Ask questions, read the fine print

Risk mitigation should begin before you buy insurance. Ask the agency rep if the insurance is primary (insurer pays first without asking about other coverage), or reimbursement-only (you pay for expenses and file paperwork later to recoup your money). Determine how the insurer defines travel partner or family member, and whether the company is licensed in your state (if not, no benefits will be paid). Also find out if you must buy the policy within a certain time after making your first travel-related payment.

If traveling abroad, visit the U.S. State Department website for helpful information, including warnings about countries plagued by war, terrorism or political turmoil. If you’re visiting such a country, you probably will need to buy upgrades to your trip cancellation and medical insurance policies.

Phoebe Venable is president and COO of CapWealth Advisors LLC. Her column on women, families and building wealth appears each Saturday in The Tennessean.