Volcanoes to Swine Flu - Does Travel Insurance Cover It?

Travel insurance is a lot like renter's insurance, in that even though it's recommended, many people don't buy it. But recent events have shown that travel insurance can be a savior when the unexpected happens.

Swine flu breaks out at your destination? A volcanic eruption closes the airports and means you can't reach the start of your tour? These and many other major disasters and minor mishaps can show the benefits of buying travel insurance. But you need to make sure you get the right policy, and know exactly what it covers or doesn't cover.

Travel insurance covers a range of issues which are called Listed Unforeseen Events. Now, it won't cover everything under the sun, only those listed events in the insurance policy. Travel insurance also usually won't cover any events that you are aware of on the day you purchase it. If you know there's a volcano currently erupting in Iceland, and buy a plane ticket to fly there tomorrow anyway, don't expect your insurance to cover you if the flight is cancelled due to the volcano.

Listed Unforeseen Events are typically situations that occur suddenly and were not normally expected on a vacation. Some of the more common items to see travel insurance cover are:

* You need to cancel your trip due to illness or injury
* You need to cancel due to being laid off from a job other employment
* Medical care if you're sick or injured on your trip, including emergency evacuation
* Company you've booked your trip with goes out of business
* Bad weather impeded your travel plans
* Lost luggage or damaged luggage
* Plane crash or cruise ship malfunction
* Costs incurred due to trip delays or flight cancellations

All policies are not created equal, so buyer beware!

Most travel insurance companies have a number of different policies you can choose. Not surprisingly, the most expensive policies also cover the most situations, while the lower priced policies are more restrictive in what they cover. Sometimes there's also a time limit - for instance, if you purchase insurance within 21 days of booking your trip, they will cover medical events related to pre-existing conditions, while if you wait beyond the 21 days, then pre-existing conditions are excluded.

Say there's a breakout of a disease like swine flu. Will your travel insurance cover swine flu? Different plans will cover different things here. Some will cover your medical expenses if you get sick on the trip. Some will cover lodging if you were quarantined. Some would cover the cost of canceling your trip if you want to avoid that area of the world entirely. The only way to make absolutely sure about your particular policy is to talk directly with your insurance company.

Cancel for any reason

One important clause to look for is Cancel For Any Reason Insurance. This will cover the cost of your trip cancellation should you decide to cancel for reasons that are not listed under the unforeseen events. Such reasons could include a big project at work that makes it difficult for you to travel right then, worries about epidemics or possible political unrest, breaking up with the boyfriend you were planning the trip with, or simply changing your mind about taking the trip. As you can guess, Cancel For Any Reason Insurance is more expensive, but it does provide the peace of mind of knowing you can change your mind.

Travel insurance is very useful for those using a travel agency to put together their vacation. Agencies and companies that run group travel tours generally require deposits and payments in advance. Some or all of this may be non-refundable, which can make it painful if you must cancel the trip or something goes wrong. Picking up travel insurance is a good financial practice.