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Travel insurance no-no's
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September 24, 1999: 7:02 a.m. ET
If your policies are up to date, don't bother with additional coverage
By Staff Writer Nicole Jacoby
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NEW YORK (CNNfn) - When it comes to travel insurance, you can almost always leave home without it.
More often than not, insurance policies aimed at travelers provide coverage already guaranteed by existing property, auto or medical policies. And in some cases, travel insurance comes riddled with cryptic conditions.
Flight insurance and travel accident insurance are among the most excessive policies. Both work in the same way life insurance does, but have more narrow guidelines.
Flight insurance kicks in only in the event of a fatality involving an aircraft. Travel accident policies are slightly broader, taking hold when the policyholder dies while traveling on any form of public or common carrier transportation, including plane, taxicab, subway, ferry or cruise ship.
Travel accident insurance also usually applies to incidents that take place in train stations or airport and bus terminals.
"These are definitely not worth it if you already have life insurance," said Madelyn Flannagan, consumer affairs advocate for the Independent Agent of America. "Flight and accident insurance are one-shot deals. If that flight doesn't fall out of the sky, the policy is over. It's much more effective to buy a good policy that has annual terms, rather than per-flight terms."
Protecting against cancellation
Trip cancellation insurance may seem like a good idea if you're worried about losing thousands of dollars in down payments for your dream vacation or honeymoon. But cancellation coverage can come loaded with conditions and exclusions, so be sure to read the fine print if you are getting the coverage from the same company that is arranging your trip.
In many cases, trip cancellation policies simply promise partial reimbursements or discounts on future trips in exchange for canceling your itinerary. And they frequently do not protect you against the source of most travel interruptions, the travel service provider itself. A change in destination related to bad weather, for instance, may be excluded from the coverage.
"This is where it gets tricky, especially for inexperienced travelers who are making long-range plans," said Bob Hunter, director of insurance for the Consumer Federation of America. "It might be worth it for a really expensive cruise that is non-refundable, for instance. It depends on your risk quotient and health."
Generally speaking, cancellation insurance might be a good idea for travelers with small children or elderly parents who are likely to fall ill. Policies usually run about $80 to $180 a person and should be purchased from a third party.
"As a rule of thumb, you should never buy insurance from someone who is selling you something else," said Hunter. "These are bad values where significant commissions are being paid out."
Insuring your belongings
Because your homeowner's or renter's policy is likely to cover personal property even away from home, additional coverage, such as lost baggage policies, aimed at protecting these items while you travel is usually unnecessary.
Most policies provide coverage for 10 percent of your regular limit for items that are stolen while away from home. In other words, a $50,000 policy will cover $5,000 of your possessions while on the road. Many policies will also cover losses resulting from the theft and or unauthorized use of your credit cards up to a certain amount, usually $500.
If you are planning to transport expensive items, such as jewelry, musical instruments or valuable collectibles, while you're away, additional insurance may be a good idea. Your general homeowner's policy is unlikely to cover these expensive items, especially overseas.
An "Inland Marine Floater" -- more popularly known as a "rider" -- allows you to add on particularly valuable items to your regular policy and is usually quite affordable.
Protecting your wheels
Whether your regular auto insurance applies on the road depends on where you are going and what type of coverage you have.
If your travels will take you overseas, you're out of luck. Most U.S. auto insurance policies have territorial limitations and are not valid outside of the United States, Canada or Puerto Rico. You will have to purchase a local policy through the rental agency.
If you are traveling domestically, your regular insurance will usually be enough, provided it includes liability, collision and comprehensive coverage. Be clear about any gaps in your coverage that might come back to haunt you. Some rental agencies may hold you responsible for loss-of-use of a damaged rental car by charging you a daily rate for every day the car is undergoing repairs. And always carry your insurance card as proof of coverage.
Drivers who do not own cars at home will likely have to purchase a collision damage waiver -- usually about $8 to $15 a day. A CDW is not insurance, but it guarantees the car rental agency will not hold you responsible in the event the car is damaged or stolen. If you rent a car on a regular basis but do not own one yourself, you may want to consider a "named non-owner" policy, which could be more cost-effective in the long run.
Medical necessities
Like good car insurance, standard medical policies should take care of you while you are on the road. But if your travels involve more than just a short recreational trip -- especially outside the country --you may need additional coverage.
Students on a semester abroad, international volunteer workers and business travelers on extensive assignments overseas are rarely covered by their basic policies. You may also want to check with your insurance agent to see how well your insurance company will respond to medical emergencies abroad. Those covered by Medicare in the United States should know that the federal program does not apply to hospital or medical services outside of the country.
Even overseas travel insurance has limits, so be clear on the conditions before you depart. Injuries that occur while participating in what are referred to as "extreme sports," such as bungee jumping, may not be covered.
If you are traveling to a part of the world where medical care and facilities are not up to the standards you are accustomed to, you may want to fly home or to a more reliable part of the world if you fall ill or are injured. Medical evacuation coverage will pay for this transportation if such a situation arises.
"It all depends on where you are going," Hunter said. "If you're going to Europe, you probably don't need it. But if you are traveling to a third world country and are worried about medical care, this is (a policy) you might at least want to think about."
Last, but not least
Before you take off on your journeys, check with your credit card company to see if they offer any courtesy insurance. Many credit card issuers provide free flight insurance when you use the card to purchase plane tickets or promise to pay for damage to rental cars.
But never rely on these credit cards as your sole means of protection. Nothing replaces a comprehensive home, auto or life insurance policy and some free policies come with lots of conditions.
"Free is free.. and you should certainly use any coverage that doesn't cost you anything," the IIAA's Flannagan said. "Just be careful you know what you are getting into." 
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