Q: I'm planning a trip this summer, and my travel agent suggested purchasing travel insurance. Is this a good idea?
A: Travel insurance can come in handy to cover lost expenses when people must unexpectedly cancel or shorten their vacations. But travelers should do their research before making a purchase so they know exactly what's covered, experts say.
"Travel insurance is something we strongly recommend," said Bill McGee, editor of Consumer Reports Travel Letter. "But it's not enough that you're covered. You have to be proactive and ask what you're getting."
In most cases, travel insurance covers cancellations and interruptions due to injury or illness (with some exceptions for pre-existing conditions); a death in the passenger's family; bankruptcy by the cruise operator or airline; strikes; bad weather or natural disasters; or other unforeseen reasons such as jury duty.
Also typically bundled in the coverage are expenses related to travel delays, emergency medical treatment and lost, stolen or damaged baggage - all at a price of about 4 percent to 5 percent of the cost of the trip, or more if the travelers are over age 50, insurance agents say.
There are often many exclusions. Some policies specifically exclude coverage for terrorism or political unrest in a country; others reimburse only if the State Department issues a travel warning for the country that a person is visiting.
Although cancellations due to an airline or cruise operator's bankruptcy are usually covered, insurers may have exceptions for certain companies they deem financially vulnerable.
That's why asking your insurance provider specific questions is crucial, such as "I'm flying ABC airline, will be staying at JFK hotel, and then will board XYZ Cruise to country X this summer. Am I covered?" according to Mr. McGee.
He also advises against purchasing insurance from the same tour operator providing the trip, because "if the company goes out of business, the travel insurance goes with it."
In other cases, a traveler might already have partial coverage from other policies. Lost or stolen baggage, for instance, is often covered by homeowner's or renter's insurance, while health insurance can reimburse for medical care in the United States, if not abroad.
Some established third-party insurers, according to Consumer Reports, include Travel Guard International at 1-800-826-4919; Access America at 1-800-284-8300; and Travelex Insurance Services at 1-800-228-9792.