Travel coverage booming business

Roughly 30 percent of leisure travelers bought travel insurance last year.
SCRIPPS HOWARD
With terrorism rearing its head in popular tourist destinations such as Madrid, Bali and, just recently, London, an increasing number of consumers are buying travel insurance that provides coverage related to terrorist incidents.
Add natural disasters, struggling airlines and a rise in nonrefundable airfares to the mix, and travel insurance in general is a booming business.
Terrorism, that's the type of insurance most people are asking about now," said John Cook, president and founder of QuoteWright.com, which allows consumers to compare and buy travel insurance plans online.
The U.S. Travel Insurance Association estimates that roughly 30 percent of leisure travelers spent more than $1 billion buying travel insurance last year. Before the Sept. 11, 2001, attacks, about 10 percent of leisure travelers bought insurance.
In case of terrorism
Although people purchase such insurance for a variety of reasons, terrorism fears are a factor in their decisions much more than ever before, industry experts say.
"I think in general people are more concerned and more aware of security-related issues," said Jon Ansell, president of the travel association, which serves as an industry trade group.
In the days following the London bombings, some of the nation's largest travel insurance firms reported a surge in calls from consumers asking about terrorism policies. Most travelers, though, continued with their plans, and cancellations were few and far between.
Terrorism insurance, which has been offered for decades and often is part of larger travel insurance package deals, can cover everything from airline tickets, lost baggage and hotel reservations to tour bookings, medical problems and emergency evacuations.
Coverage typically runs from 4 percent to 8 percent of a trip's cost. The price also depends of the age of the traveler and length of the trip. A young couple planning to spend $3,000 on a weeklong trip in September, for example, can get comprehensive travel insurance with terrorism coverage for anywhere from $103 to $189, according to a search on QuoteWright.com.
Reading the fine print
But the devil is in the details, as policies are structured differently and often include restrictions and specific criteria for coverage.
Some plans only reimburse travelers if the U.S. Department of State issues a travel advisory for the destination.
Other policies stipulate that an attack must be within a certain radius -- say, 100 miles -- of the destination city. Consumers also typically must purchase insurance when they book their travel plans. You essentially can't buy insurance after an incident occurs to cancel plans you've already made.
"You should always buy insurance early, when you make your initial trip deposit," said Alex Velinov, president of Total Travel Insurance, which allows consumers to research insurance plans online.
Some people are turned away by the coverage restrictions, though.
Jim Miller initially looked into travel insurance when planning a June trip to Europe with his family. But Miller, who runs a local real estate development investment company, ultimately decided against it.
"I was concerned about the potential for a terrorist attack, but the plans I looked at didn't really cover it. The plans were very specific about the exact circumstances that would be covered," he said.
Travelers who don't buy travel insurance up front still have some recourse. Large airlines often allow passengers to re-book flights or change their itineraries for a certain period of time after terrorist attacks.