1. What is travel insurance? Most people buy travel insurance to reimburse themselves for plane fares and other costs if an unforeseen event, such as a medical emergency, forces them to cancel an expensive vacation.
2. What else can travel insurance do for you? Most policies provide coverage for unfortunate events that happen during your trip. For example, most insurance policies provide a 24-hour hotline that customers can call to rebook flights, make hotel arrangements or find ground transportation. During the 2007 Valentine's Day ice storm, calls to AIG Travel Guard's assistance center were double those of normal levels. Such companies can access several airlines' reservation systems - not just the one for your original airline. In addition, most insurance policies will pay for your hotel accommodations and meals if your flight is delayed or canceled. You should be aware that airlines aren't required to reimburse you for those expenses if a delay is weather-related.
3. How are policies priced? The cost of travel insurance is based on your age, the cost of your trip and, to a lesser extent, the length of your trip. Premiums typically range from 3% to 7% of the trip's cost, but there's a wide range in prices. Premiums for a $6,000 Hawaiian vacation package for a 48-year-old traveler, for instance, range from $159 for a basic plan to $805 for one that provides up to $1 million in medical coverage.
4. What do you need to look for when comparing policies? Though you probably don't need a gold-plated policy, be aware that you might sacrifice some important benefits by choosing the cheapest plan. Here's what to look for when comparing policies:
5. Lastly, what should you do regarding receipts? To be reimbursed by your travel insurance policy, you must be able to document your expenses. Make sure you hold on to your receipts.
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