Insurance policy can help protect dream vacation

Travel insurance is a particularly hot topic these days because of the economy.

In addition to all of the regular things that can go wrong before and during a vacation -- your child is unexpectedly hospitalized before departure, you miss your cruise because of a canceled flight, you break your leg in some distant locale -- travelers need to be more concerned than normal about the possibility that the company providing their trip might go bankrupt.

They also need to be concerned about the possibility of losing their jobs and not being able to afford to go away. Depending on the policy they purchase, both of those circumstances can be covered.

However, considering the odds that any of these things will happen, should you buy travel insurance for your next vacation even though it will add to the cost of your trip, and you might never use it?

Before you answer, ask yourself two other questions: Can I afford to lose the money I paid for my vacation? And can I afford to pay potentially huge, unexpected expenses during my trip?

Travelers looking for coverage can buy a cancellation waiver or insurance. According to Margaret Richcreek, owner of Richcreek Vacation Center in Lower Paxton Twp., waivers cover trip cancellations but don't provide any coverage during the trip, while insurance covers travelers before and during their travels.

Coverage can be purchased through a travel supplier -- such as a cruise line or tour operator -- or from an insurance company. Either can be purchased through a travel agent.

The cost of cancellation waivers and insurance can vary greatly from one company to another. Tour operators generally charge a flat rate for their coverage, no matter what the price of the trip, and it's usually cheaper than buying it from insurance companies, which charge based on the cost of the trip and the policy holder's age.

However, the tour companies' coverage is not as comprehensive as that from an insurance company.

Richcreek has found that insurance sold by cruise lines is generally more expensive than buying coverage from an insurance company.

Richcreek sells policies offered by Travel Insured International, whose least expensive policy includes coverage for trip cancellation (though not for any reason), trip interruption, missed flight connections, baggage and personal effects, baggage delay, terrorism, emergency accident and medical expenses, emergency evacuation and transport of remains.

The company's most expensive policy offers higher coverage amounts for most of those problems along with additional coverage for preexisting medical conditions, financial default, accidental death and dismemberment.

For all four levels of the company's coverage, policy holders can buy optional protection that allows them to cancel for any reason up to 48 hours before departure and receive a 75 percent refund of nonrefundable costs.

Because there are so many different companies offering so many different policies, how do you select the one that will give you the best coverage at the lowest price? Next week, we'll discuss factors to consider when making your decision.

Annette Reiff is a certified travel counselor and a former travel agent. An experienced traveler, she has written on a range of travel topics. Reiff can be reached at alr@paonline.com.