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NOW, MORE THAN EVER: TRIP INSURANCE

The expensive lesson of trip insurance was learned again the hard way during the recent volcanic ash crisis. Thousands of stranded North Americans who paid upfront for nonrefundable travel were unable to get to their rented apartments, cruise ships, and package tours. Without insurance, the money paid for those trips was lost. Travel sellers consider earthquakes, volcanic eruptions, floods, and the like to be beyond their control. They also expect their customers to protect themselves with trip insurance. In these times of fewer and fewer sure things, and more and more ways for things to go wrong, trip insurance is essential. However, don't make the mistake of equating the total amount you plan to spend on a trip to the amount of coverage you need. If your exposure is limited to a few hundred dollars in air ticket cancellation fees, $200 to $300 in trip insurance premiums probably doesn't make much sense. My rule of thumb is: figure how much you will be out of pocket if, on the day of departure, your trip has to be canceled for a reason covered by a reputable trip insurer. Car rentals can usually be canceled with no penalty as can most hotel bookings. Rail passes can be returned for 85% credit. Big ticket, non-refundable, prepaid travel products such as vacation rentals, tour packages, or cruises are another story. By all means, make sure you are covered for such potential losses. On the other hand, I do not recommend the cancellation coverage offered by travel suppliers as it frequently provides merely a credit for future travel. You want your cash back, so purchase trip cancellation insurance from a reliable company. We recommend one of the largest and best-known, Travel Guard. Trip insurance research tools are available here.