To print article, click Print on your browser's File menu. Go back   Get the best tools for managing your money Compare credit cards and rates Expedia: Deals on airfares, hotels, cars Do your taxes online Find It! Article Index Fast Answers Tools Index Site Map Recent articles by Bankrate.com: • 10 after-the-disaster do's and don'ts, 9/21/2005 • Keep your home after disaster strikes, 9/19/2005 • 10 ways home sellers blow a sale, 9/12/2005 More...		The Basics Should you insure your airline tickets? The big travel agencies all offer ways to protect your nonrefundable ticket. But given its limitations, you may not need it -- or you may need more complete travel insurance.  By Bankrate.com You worked hard for your vacation. You spent hours making your plans. And since you are on a budget, you picked the cheapest airline tickets, the nonrefundable "use-it-or-lose-it" tickets. What happens when you don't make your flight because your father has a heart attack or your car breaks down on your way to the airport? You're out of luck, unless you purchased ticket-protector insurance, offered by Continental, Northwest and America West airlines and by several travel Web sites. Of course, you might still be out of luck, depending on your policy and what made you miss your flight. Ticket-protector insurance is by no means a cure-all. Don't let retirement sneak up on you. Create a perfect plan. Ed Perkins, travel expert and author of Online Travel and Business Travel: When It's Your Money," calls ticket-protector insurance a "lite" version of trip-cancellation and trip-interruption insurance. "Instead of buying insurance that covers all your bases, like your hotel, car rental or most anything else, you are solely protecting your flight," says Perkins. Orbitz, Travelocity and Expedia have offered ticket-protector insurance for years. The cost is around 4% of the price of your ticket, and it can cover a ticket up to $3,000. But before you click, buy and fly, make sure you know exactly what this insurance covers and where you fall under the "covered reasons." 'Covered reasons' uncovered The covered reasons are very important to understand because it could mean the difference between a full refund and lost money. Covered reasons usually include medical emergencies, car accidents, terrorist attacks, airline delays or cancellations, natural disasters, death of traveler or family member, adverse weather, airline strikes and jury duty. But those covered reasons may be defined more narrowly than you expect. Related news and commentary on MSN Money • The airline's bankrupt, but your seat is safe • Avoid hassles on your next flight • Luxury travel perks for the infrequent flier • How to complain and win • Lost your wallet? Act fast For instance, a medical emergency such as a heart attack or a broken leg would be covered. However, if you have an existing condition such as epilepsy and you have a seizure two days before your scheduled departure, you will not be covered. The insurance will not cover you for a medical condition already being treated. Also, consider weather conditions. Say you are traveling to a hurricane-prone area and a Category 4 hurricane is set to hit your destination just days before your arrival. If you cancel your flight, you will not get your money back unless the airline cancels the flight or the airport is closed. This was a particular sore spot for Robert Wells and his family, who purchased ticket-protector insurance before their vacation in September 2004. Wells called to cancel his family's flight one day before his arrival airport was closed, due to the incoming hurricane, only to be told that he would not get a refund because he jumped the gun by canceling before the airport was officially closed. Emily Porter, vice president of marketing for Access America, says most people who purchase ticket-protector insurance assume the insurance covers everything. "They need to sit down and read the fine print and understand exactly what is and isn't covered." Labor strikes also fall under covered reasons, but you already have some protection through a law that requires airlines to honor tickets from competitors in the event of a strike or a shutdown. However, if you were one of the 70,000-plus stranded British Airways passengers at Heathrow Airport recently, the U.S. law had no bearing on your situation. In this case, ticket-protector insurance would have paid off. The insurance would have paid for a night at a hotel if you were delayed more than six hours. Had the strike lasted more than 24 hours, your insurance would have reimbursed you for your ticket, up to $3,000. Keep in mind that changing your mind isn't a covered reason. "You just can't decide not to go," says Porter. You must have a covered reason to get your money back. Critics of the insurance argue that the coverage is too limited because unforeseen circumstances often are not covered. "There is a fine line on coverage, a very limited line and general in its scope, but if you truly have a nonrefundable, nonreusable ticket, then the insurance will come in handy," travel author Perkins says. "However, when you travel you don't really know your circumstances and if you have a problem with coverage, generally the insurance company has the upper hand." Consumer advisers say ticket-protector insurance should be purchased only under limited circumstances. Some criticize the airlines for setting up rules that prohibit refunds and then selling insurance to provide refunds. The airlines say that the coverage provides its customers with a choice. Travel insurance or ticket-protector insurance? The most basic form of airline-offered insurance is far more limited in its coverage than traditional trip or travel insurance. While ticket-protector insurance covers just your flight and maybe a little more, travel insurance covers your whole trip. According to Jim Grace, president of Insure My Trip, travel insurance provides more peace of mind. "Because if you miss your flight, you will most likely be delayed or miss the rest of your trip. So many other factors come into play and you could lose all that money if you are not completely protected." Those factors include rental cars, lost or stolen luggage, hotel reservations and any tickets such as amusement park passes. Of course, you pay for that extra protection. Travel insurance starts at 4% to 6% of the total cost of your trip, and goes up from there. Sometimes up quite a bit. Travel insurance can come in handy when you are abroad. "So many Americans don't realize that their health coverage is limited or non-existent when they are overseas," says Grace. "Medical care is included in many travel insurance policies. So is emergency medical evacuation or even life insurance, if you or someone in your family is accidentally killed while vacationing." The number one reason why people purchase either ticket-protector insurance or travel insurance is medical protection, according to travel insurance providers. "It just gives people peace of mind to know that if they or a family member becomes ill, either before or during the trip, they will be covered," says Jon Gehris, vice president of Travel Insured International. A little research on both types of insurance will help in your decision. You should also check with your credit-card issuer. Some provide insurance on rental cars and some on airline travel, especially when the contractor does not supply what you purchased. Some higher level cards (gold or platinum) will also offer insurance for accidental death or dismemberment. Ask the critical questions Before you purchase any type of insurance, it's important to evaluate your needs. If you just plan on taking a trip to see family and have made no hotel or car reservations, ticket-protector insurance is probably your best bet. If you're planning a big family vacation that includes your flight, rental car, hotel, cruise and more, then travel insurance might be a better choice. Whichever you choose, you should get a complete copy of your plan through either the airline or insurance agency. It will list all "covered reasons" and will give you a list of additional coverage if you think you might need it. If you are unclear of what exactly the policy does and does not cover, ask. Here are some questions to ask: 1. Medical emergencies. Find out who is covered inside and outside of your traveling party or immediate family and get a list of all covered medical emergencies. Also, find out if those medical emergencies cover pre-existing conditions. 2. Weather coverage. If you are buying insurance because of travel to hurricane-prone areas during hurricane season, ask the insurer specifics about cancellations. Ask how far in advance the airline and airport cancels if threatened by a hurricane and what procedures to follow to ensure that you are not stuck in threatened areas. 3. Lost and stolen luggage. Travel insurance should cover lost or stolen baggage, but find out the covered amount. Also, find out if your ticket-protector policy covers lost or stolen luggage. Policies differ. 4. Terrorist attacks. Find out what emergency plans are in place and what you can do to ensure a safe return if the city you are traveling to or in is attacked. Insurance agencies will often provide a translator and emergency evacuations for their customers. 5. Airline strikes/bankruptcy. Since all U.S.-based airlines are required by Congress to assist passengers in the event of an airline strike or bankruptcy, additional insurance is not required. But foreign airlines do not give you the same protection. Inquire about the protections you will have under either ticket-protector or travel insurance. (For more on how airline bankruptcies affect consumers, read The airline is bankrupt, but your seat is safe.) 6. Hotel accommodations. If you are delayed or stranded due to weather or other circumstances, find out in advance about your covered hotel accommodations. With ticket-protector insurance, you are only covered for hotel accommodations if your delay is more than six hours. One of the most important things to research is the insurance company itself. Find out here how much experience it has in the industry and how reputable it is. You can also view policies on travel insurance companies' Web sites, as well as the airline and travel Web sites where you purchase your ticket. Independent Insurance Agents & Brokers of New York also provides consumer tips and insurance options. "The bottom line is to be proactive in your search and do your homework," says Janet Cole, special projects coordinator for Hurley Travel Experts in Portland, Maine.
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