How Does Travel Insurance Work?

What is Travel Insurance?

Tourists purchase travel insurance to protect against unforeseen events such as inclement weather, sudden business closure, lost luggage and other nuisances. Insurance policies may even cover rare occurrences like terrorist evacuation and plane crashes. They're a security blanket that could save time and money in the long run. However, some argue that travel insurance is superfluous and a waste of money,

pointing out that many airline carriers cover lost baggage, while credit cards frequently cover losses from shuttered transportation concerns. There is also the danger of scams from unscrupulous, non-licensed dealers. Fine print problems exist; CNN notes that name ambiguity can shade regulation and contractual guarantees. Travel insurance may seem like a good idea, but it's necessary to study the facts before buying.

Tricky Travel Insurance Contracts

Be sure that what you're purchasing is actually a state-regulated insurance plan. Steve Dasseos, chairman of Tripinsurancestore.com, states that buyers are often misled by policies called "trip protection plans." These deals are anything but, since they're not official insurance policies with any sort of government policing. Look for plans that are labeled by name as insurance products.

Read the fine print. Just like health insurance, pre-existing conditions are a way for an underwriter to deny coverage. This means that a flight-induced anxiety attack that results in a hospital visit in the middle of Paris won't result in a refund of the hospital costs, especially if the sufferer is under treatment for mental health issues. Some companies issue pre-existing insurance waivers, but those require strict adherence to company regulations to apply.

What Type of Insurance is the Best to Get?

Peter Greenberg, TODAY travel editor, states that "while a majority of those who don't buy travel insurance are familiar with flight and trip cancellation insurance, many people are unaware of travel health insurance, baggage coverage and medical evacuation insurance. " All types of insurance are not created equal, with some types a bad value for the money.

Flight insurance, sold at airports as a high-priced add-on item, is usually considered a poor investment. Trip cancellation and interruption insurance is dependent on the value of the trip being covered; the more expensive the cash outlay, the more necessary this policy is. Travel insurance with medical evaluation coverage is great for those that travel internationally. Lastly, baggage insurance is great if you dress expensively. Otherwise, airline baggage coverage will probably do. Keep valuables like jewelry and computers on your person at all times to avoid trouble and minimize the chance of loss.

Source: [http://www.ehow.com/how-does_4913534_travel-insurance-work.html]