Don't forget your vacation insurance before you take off for any travel.

I am very serious when it comes to insurance, I do not want to take any
chances, I grew up in a family with my mother as a sole bread winner, my Dad
passed away when I was 10 years old without any insurance. Life was very very
difficult then.

So the same goes with vacation insurance too!

It can cost you an extra few thousands of dollars if the cruise or tour
operator goes bankrupt, or if you need to shorten your vacation due to sickness
or injury.

Quick Tip

The biggest myth would be that your normal health insurance covers you when
you are away, or that since many travelers visit an area or region, access to
medical care is easy or affordable.

Here's a quick guide to understanding what a good vacation insurance should
cover for any travel.

1. Travel Curtailment

If you or an immediate family member becomes seriously ill or is injured
during the vacation most vacation insurance companies would reimburse you for
the unused portion of the vacation.

2. Travel Cancellation

You would be reimbursed if the cruise line or tour operator goes out of
business. It would also reimburse you if you have to cancel the vacation due to
sickness, a death in the family or other calamity listed in the insurance
policy.

Travel cancellation is very different from a Cancellation Waiver that many
cruise and tour operators offer. Waivers are relatively inexpensive. They
provide coverage if you have to cancel the trip, but they have many
restrictions.

They must be purchased when you book the trip and will usually not cover you
immediately before departure. Most importantly, waiver is not insurance.

2. Personal liability

Personal Liability is important in case of legal liability, arising out of
one's negligence in causing a third party injury (or death) and/or third party
property damage.

Some Travel
Insurance companies even insure against the loss or theft of
golfing equipment and laptops.

3. Luggage/Baggage/Flight Delay

This feature comes along with a "Time" excess, meaning that the traveler
insurance companies only compensate when the delay exceeds a certain time frame.
The limit for loss of luggage/baggage/flight varies, usually with a cap for
individual items.

4. Emergency & Medical Assistance and Information Service

Look for those 24-hour services that offer information on visa requirements,
foreign exchange, weather forecasts and medical advice et cetera.

Emergency evacuation is very helpful indeed for inexperienced travelers or
travelers with medical conditions or for those who are traveling to more remote
and less traveled places.

These service centers may also offer emergency assistance in the form of
embassy, legal, interpreter and medical referrals.

Most vacation insurance policies would compensate a couple of hundred dollars
for each day of hospitalization up to the maximum limit indicated in their
respective packages.

This is solely to compensate the traveler for the number of days spent in a
hospital overseas and should not be mistaken as hospital or medical
reimbursement, which takes care of the hospital and ward charges.

4. Accidental Death insurance

Personal accident coverage, which is to compensate the insured for permanent
or temporary disablement or death as a result of an accident.

2 Main Types of Vacation Insurance

Annual Policy

Most Travel
Insurance companies offer vacation insurance on annual basis
as well as per trip basis. Annual policies cover unlimited trips made by the
insured during the entire year provided that each trip does not exceed a certain
number of days, usually 90 days.

No declaration is required.

For frequent flyers, this type of cover would be most ideal in terms of cost
and convenience.

Family Vacation Insurance

Family packages are also designed to cater for immediate families traveling
together. Definition of immediate families would mean you, your spouse and your
children.

Family vacation insurance are usually priced lower premium than if individual
insurance policies were to be taken up for the whole family.

Special Features ALERT!

Go for vacation insurance policies come with higher deductible and this
translates into lower premium.

The worst case scenario is you may end up having to bear the first $40 or $50
of every claim that you make.

Deductible: (Also known as Excess in UK, NZ, AU) This is the amount that the
insured must pay before the vacation insurance starts paying for your claim.

This may be an annual amount, an amount for the duration of the policy, or an
amount for each incident. Choose the latter.

For those of you who intend to engage in water or winter sports during your
vacation, it would be wise to take up your insurers who offer free coverage for
such activities.

Some traveler insurance companies may charge an additional premium for this
extension, so it is better to check this point before you effect your cover.

Unfortunately, the definition of water sports in the typical travel policy
does not include scuba diving.

Not surprisingly, bungee jumping is excluded from most policies. Watch out
for age limits imposed by some traveler insurance companies, meaning that
persons exceeding a certain age are excluded from their coverage. But if you
belong to this elderly group, fret not.

There are traveler insurance companies that do not impose any age limit and
offer the same coverage at no additional premium loading.

A unique coverage that is being offered in the traveler insurance market is
the "Car Rental Excess". This feature takes care of the excess amount that the
insured normally has to bear (under the motor policy taken up at car rental
companies) in the event of damage to the rented vehicle while driving overseas.

Price of Vacation Insurance also known as Premium - Premium Computation

For "per-trip" policies, the premium payable hinges considerably on the
number of days of travel, the country of destination and choice of plan.

For example, if you are from Europe, a vacation in USA warrants a much higher
premium than a trip within Europe for the same number of days.

Some Travel
Insurance companies provide the option of higher limits of
coverage at of course, a higher premium.

If price is of concern, it is advisable to keep on hand the premium schedule
from a few traveler insurance companies for comparison before you activate your
insurance before each trip.

Claim Procedure

I consider this the most important aspect of buying a vacation insurance.

All traveler insurance companies will require you to lodge your claims within
a certain time frame. You would be required to complete and submit a claim form,
which can be obtained from the traveler insurance company.

In almost all instances, your claims must be accompanied by relevant
documents, such as medical receipts for medical reimbursement or hospital cash;
a police report for loss of money or personal documents; an official letter from
the airline in cases of flight or luggage delay and loss of luggage if within
custody of the airline.

In all cases, call up and inform your traveler insurance company immediately
for necessary advice.

There you are... now with a basic knowledge of vacation insurance, you are
equipped to choose the best suited to your travel needs and you are all set to
fly!