Protect Your Travel Investment in Times of Terror

Ongoing travel reservations to most parts of Europe have taken an unexpected nosedive in the wake of the Paris attacks and Brussels terror threats. France, perennially the top tourism destination in the world (84 million visits in 2014—far ahead of second-place U.S., which had about 70 million) has seen advance reservations and sales to museums, hotels, restaurants, and the Eiffel Tower plunge by a half or a third since mid-November.

Will tourism rebound? Barring any new or recurrent catastrophe, it probably will. But to normal levels? And will there be a new normal? We can only wait and see…

What does this mean for your plans for the upcoming holiday season and into 2016?

We suspect that most of you who had planned to travel will follow through with your plans. And so you should, albeit with some new or added protections built in. One thing is for sure: you’ll need supplemental insurance to cover the cost of any medical emergency that may arise while you are travelling—be it an accident or unforeseen illness. Given the high costs of health care in all countries (nowhere is it cheap, and never, ever, is it free), this is not a cost you can absorb without pain.

But neither can you likely absorb the loss of several thousands of dollars on a foreign trip you have been looking forward to for months or even years. You need to protect your cash investment in airline tickets, partially or fully prepaid hotel reservations, event bookings, land or sea tours, and anything else for which you have made a non-refundable financial commitment.

Most insurers that sell emergency medical insurance also sell trip cancellation and interruption coverage, and both contingencies are typically combined. You need to seriously consider this type of coverage for any trip out of the country. But know what you are buying: read trip cancellation policies from beginning to end and discuss their benefits and limitations with the agent selling you the policy. They have limitations on what they will cover and how much they will pay.

Trip cancellation and interruption policies will only cover non-refundable payments you have already made to your travel providers—sums that may be considerable and difficult or impossible to recover if something goes awry.

Trip cancellation insurance will not cover the new set of golf clubs you bought for your cancelled trip to Dubai, nor will it cover the wardrobe you intended to wear for that opera trip to Milan. And, hate to say it, it won’t pay for the unfulfilled anticipation of your dream cruise to Tahiti.

But it will cover you if you miss an airline connection due to no fault of your own and encounter unexpected hotel or meal expenses; if civil disturbance in one city on your itinerary forces you to reroute, or cancel altogether; or if border authorities refuse you entry for issues beyond your control. In these cases, you may well be eligible for some recovery.

Also understand what is required of you when buying trip cancellation insurance. To protect your prepaid costs of travel, it is best to buy coverage when you book your trip, or when your prepaid travel arrangements become non-refundable. For example, your trip costs won’t be covered if you book your trip and then two months later buy cancellation insurance when you hear the resort owner is going bust.

And there will be limitations on your coverage in case of travel interruptions or delays. For example, trip interruption benefits for meals and accommodation are typically limited to $150–$350 per day. Don’t expect to be reimbursed for a three-star Michelin dinner after a missed airline connection—even though not your fault. We’re talking necessities here, not luxuries.

If we seem to be stressing the negative, it’s because you need to be sure you understand that insurance is there to cover your actual cash losses—not what might have been, but what was actually lost.

When deciding whether to purchase trip cancellation insurance, sit down and calculate the real non-refundable cost of your trip. That means everything: flights, ground transport, hotels, cruises, and tour reservations. And then calculate what you can afford to lose.

Compare several trip cancellation and interruption policies, and understand the fine print. Their terms differ. This is not a job to do on your own. You need a specialist’s help.

Our travel insurance specialists at Ingle International can guide you through this. They can alert you to the benefits and pitfalls and recommend which plans best suit your circumstances. And once you are satisfied, they can book it for you.

With international travel, you’re talking serious money. Seriously.


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