Travelers looking again at insurance

By Bruce Mohl, Globe Staff, 3/10/2002

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The events of Sept. 11 have taken a heavy toll on the travel business, but not on the travel insurance business.

Industry officials say the market for travel insurance and related products was already strong, but that the terrorist attacks magnified fears about safety and security and sent insurance purchases soaring.

Tom Zavadsky, executive vice president for sales and marketing at Travel Guard, one of the industry leaders, said travelers were already changing their insurance buying habits before Sept. 11. Travelers were becoming less preoccupied with protecting themselves if their trip was canceled or their baggage lost, and more concerned about security issues like what happens if their passport is lost or their leg broken, he said.

"They're really concerned now about things that can happen to them while they're on a trip," Zavadsky said.

Even as the number of travelers dwindled after Sept. 11, sales of travel insurance soared. Zavadsky estimates about 5 to 7 percent of American travelers were buying insurance before Sept. 11. Now, he says, that number is two to three times higher. Travel Guard, based in Stevens Point, Wis., was growing at a 30 percent annual clip before Sept. 11, and now is on a pace to hit 80 percent, Zavadsky said.

Unfortunately, insurance is not a subject a lot of travelers like to focus on. They rarely think much beyond saying yes or no when asked if they want to buy some, let alone read the voluminous fine print or shop for the best coverage. It's understandable. Who wants to dwell on what might go wrong when you're on vacation?

Yet with vacations costing more and time off from work increasingly precious, it makes sense to take reasonable precautions to protect your investment. The basic rule is to learn the extent of your existing homeowner's, medical, and life insurance coverage, and see what gaps exist that need to be filled.

"There's no right or wrong coverage amount," said Steven Paul, vice president of sales for Insurance.com, a unit of Fidelity Investments. "It really is an individual decision. It gets to what you are willing to spend and lose on a trip."

Check your homeowner's policy or contact your agent to review your coverage in case baggage, including a laptop computer, is lost or stolen. Check with your medical insurance provider to see if you're covered while traveling abroad. Does your coverage get you to the nearest hospital, or do you need coverage providing evacuation to a hospital at home in case of a medical emergency? Is your life insurance sufficient in case the unthinkable happens while traveling?

Given the uncertain economic times, trip cancellation and trip interruption insurance might be worth considering. Both coverages offer protection in cases of illness or injury to you, a fellow traveler, or a family member. But they also can protect you if your airline, cruise line, or tour operator goes bankrupt, a very real concern these days.

Many travel agents and tour operators offer packages that blend different coverages, so it can pay to read the fine print to see if you're buying insurance you don't need.

Since Sept. 11, travel insurance providers have been busy adding services to their existing policies or coming up with entirely new coverages to put travelers at ease. Many travelers were stranded away from home immediately after planes were grounded Sept. 11, so Travel Guard came up with a service it calls "Live Travel." It allows travelers who have had their plans disrupted to call a toll-free number for help with rescheduling flights, booking hotel rooms, and other emergency services.

At Grand Circle Travel in Boston, the senior tour operator began offering cancellation insurance that allows the traveler to cancel at any time for any reason up to the day of departure. Other tour operators, including TNT with its "No Worries" travel protection, are offering similar coverage.

These types of coverages, which typically cost a bit more, offer tremendous flexibility. But Zavadsky at Travel Guard urges travelers to read the fine print. He says many of the policies offer reimbursements in the form of vouchers rather than cash, and some companies' policies don't protect against a tour operator's default or bankruptcy.

A happy ending

Eleanor and Vincent Terlino of Saugus purchased travel insurance that didn't cover what they thought it covered, but luckily their story has a happy ending.

As I reported earlier, the Terlinos purchased insurance coverage for a trip to Aruba for their 60th wedding anniversary. But when they had to cancel because of illness, they discovered the policy covered only the land portion of the trip and offered a voucher for future travel for the air portion.

The Terlinos, who wanted a full refund, accused their travel agent, All Seasons Travel of Saugus, of deceiving them. Agency officials said they fully explained the terms to the Terlinos, but nevertheless they went to bat for the elderly couple, seeking a full refund from American Airlines. The check finally arrived recently.

"I have stood on my head," said Lynn Barlow, the owner of the agency, which is moving to Stoneham shortly.

Bruce Mohl can be reached bye-mail at mohl@globe.com.