Making Travel Insurance Work for You
By: Brian O'Connell

Have the ashes from the recent Iceland volcano eruption clouded your travel plans?

Granted, being stuck in an airport in Amsterdam or Dublin isn’t the worst thing in the world, especially if you’re young, cash-liquid and aren’t pressed for time getting back to the U.S.

But what about the rest of Americans? Reality dictates that being grounded in London has ramifications for thousands who are due in Los Angeles the next day — and for other tens of thousands of travelers traveling via U.S-Euro points of call.

Theoretically, that’s where travel insurance comes into play. First off, any overseas traveler needs to factor in a potentially angry Mother Nature — and that means getting travel insurance. According to Insuremytrip.com, the cost of overseas travel insurance is about 4%-8% of your entire trip.

That’s not exactly cheap, but it can be valuable when you need it. The same Web site says that you can get between $150-$250 a day with good travel insurance if something goes awry — like a mushrooming volcanic ash over the skies of Europe that grounds your plane in far-off places like Paris, London or Amsterdam.

What should you do if you find yourself in such a situation? Here are three tips:

  1. Take a detailed look at your travel insurance policy. Not every policy is the same. Check the fine print on payouts for trip delays, language on trip “interruption” and language on whether your delay was based on a weather-based interruption.
  2. How long were you delayed? Check your travel insurance policy to review the language on “length of delay.” Some policies may pay out after six hours of delay and some may pay out only after 24 hours of delay. Make sure you know when your insurance kicks in.
  3. Is there a maximum payout? Most likely, your insurance policy will have a maximum payout — say $1,500 — that the policy coverage won’t exceed. So if you’re really stuck in a foreign country for an extended amount of time, you’ll only receive a certain amount of coverage. You may benefit from a “trip interruption” clause. That often triggers after “trip delay” coverage is exhausted. Again, check your policy for details.

Also make sure to check for coverage if your trip to Europe is canceled outright due to Iceland’s volcanic ash. Most travel policies pay out 100% for things like non-refundable deposits and airline fares. Again, the clock comes into play here — check your travel insurance policy to see at what point your travel insurance payout begins.

Traveling overseas without insurance is a big risk. Anyone who’s stuck in a European city without it these days can attest to that.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

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