Popularity of Travel Insurance Increases

(May 8, 2008 - DTN) -- Amid airline failures, terrorist threats, hurricane dangers and the medical ailments that afflict an aging population, travel coverage is growing more popular.Between airline issues, natural disasters, terrorist threats and medical emergencies, more people are opting to purchase travel insurance. In 2006, Americans spent roughly $1.3 billion on travel coverage, a 20% increase from 2004, a study by the U.S. Travel Insurance Association found.

Travel insurance companies say insurance can offer one-stop, less-hassle service. But most consumer advocates advise careful shopping to determine that you’re not paying extra for something you’ve already got covered.

Americans spent $1.3 billion on travel insurance in 2006, a 20% jump from 2004, according to the latest study released by the U.S. Travel Insurance Association.

Insurance got a big lift after the Sept. 11, 2001, terrorist attacks, which shut down air traffic for days. Roughly 30% of leisure travelers buy insurance today, compared with about 10% before Sept. 11, the U.S. Travel Insurance Association reports.

Insurance has become more relevant amid a spate of airline bankruptcies. When an airline, cruise-ship line or tour operator fails, travel insurance usually kicks in. It also typically pays for expenses like airport meals or hotel rooms when airlines delay or cancel flights.

But policies differ sufficiently on these and other points, and contain enough wrinkles, that travelers should take the time to understand what they’re buying.

Some credit cards and debit cards may offer similar services for free, said Stephen Levins, executive director of Hawaii’s state Office of Consumer Protection.

Consumer Reports notes that your regular homeowner’s policy, health insurance and credit card often cover many of the travel risks. One confusing aspect of travel insurances that while insurers usually reimburse your prepaid expenses when a travel firm goes under, they won’t reimburse you if the airline, cruise line or tour operator from which you bought the policy fails, said Peter Evans, executive vice president of www.insuremytrip.com, a travel-insurance shopping service. That’s a good reason to buy directly from an insurer or from third-party firms.

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