1. Travel

Travel insurance helps put the what-ifs to bed

Having already traveled in northern Europe, the Caribbean and South America, Charlotte and John Milby turned to southern Europe — and the Mediterranean. The Milbys, of Brooklyn, N.Y., were intoxicated by tales of romance and history.

Careful travelers, the couple next spent about two years narrowing down the destinations they most wanted to experience. Then they selected a cruise, between Barcelona and Venice, that would help them realize their dreams.

And that's just what happened, with the ship calling on Monte Carlo, the port towns serving Florence and Rome, beautiful Nafplio and Corfu, Greece. Up next: Dubrovnik.

But at 4 a.m. the day they were to dock in Dubrovnik, John woke Charlotte coughing, unable to breathe, sweating yet cold to the touch. His wife alerted the ship's nurse, who got the doctor. After emergency treatment, the couple was sent to a small hospital on the island of Corfu. That's when the Milbys' other pretrip planning came into play.

They had also shopped for travel insurance — a catch-all for a myriad of policies that will reimburse expenses and provide help in a medical emergency.

After consultation with her husband's doctors (the couple has declined to disclose his precise medical problem), Travel Guard insurance company arranged to transfer the couple and their luggage to an Athens hospital. When John Milby was ready to travel home, Travel Guard arranged for a doctor to travel with them, purchased plane tickets for all three and provided the ambulance that brought John to the airport for the flight home.

The activities on behalf of the Milbys following the abrupt ending to their cruise are an example of medical evacuation insurance, the most extreme option among the many choices that travel insurance companies offer.

More typical is some form of insurance to cover out-of-pocket expenses if a trip is interrupted or canceled. Indeed, "93 percent of the policies bought through our company include some form of cancellation insurance,'' advises Chris Harvey, whose Squaremouth Inc. reported $7.2 million in sales for 2011.

Squaremouth, Harvey says, is a comparison engine, "like an Expedia, but for travel insurance.'' The firm, based in St. Petersburg, offers about 250 insurance options from 23 carriers.

Harvey's comments echoed others in the business about why travelers want to inject a note of pessimism in their upcoming travels and vacations:

"It's for peace of mind and to protect your financial investment,'' notes Linda Kundell, spokeswoman for the trade organization U.S. Travel Insurance Association.

And Travel Guard spokeswoman Carol Mueller said, "The No. 1 reason people buy the insurance is for cancellation of their trip.''

"You don't know what will happen,'' continued Mueller, vice president of communications for Travel Guard. "Your trip could be smooth sailing, or your flights could be grounded by a cloud of volcanic ash. Or you could slip and sprain your ankle.

"You need to consider all the what-ifs.''

Recognizing the advantages of travel insurance, are there pitfalls? Can the traveler buy too much?

Maybe, and yes, say the experts.

"All policies against interruption and cancellation ask for your total, out-of-pocket investment, and they will insure you to the penny,'' explains Mueller. The premium is based on what you say you have paid for the trip, and if you present a claim for reimbursement, you'll have to produce receipts that match that pretrip expenditure.

Kundell added the "but'': "You can insure for higher medical costs than you are likely to incur — though no one can predict what you might really need.''

That is, if no medical or hospital treatment is needed, then you could say the traveler did buy too much protection. On the other hand, medical evacuation involving an air ambulance can run $2,500 an hour.

Harvey says he believes buying too much insurance often happens because of too little comparison shopping by travelers among the insurance policies and their rates.

"Travel insurers, like other companies, have target demographics,'' he said, and much of this is based on age, so that the same provisions are likely to have different costs for different age groups — more so if a company happens to be aiming at an age group that does not match the shopper.

Generally, he said, the premiums will be between 4 and 10 percent of the basic investment in the trip.

With comparison engines such as Squaremouth, and, shoppers can select a number of common options including price ranges for medical insurance.

"People will call us to ask why one company's rate is so cheap,'' recounts Harvey. Most likely it is because the shopper best matches the seller's target demographic. Or as Harvey puts it, "You've hit the sweet spot.''

Freelance writer Robert N. Jenkins is the former travel editor of the Tampa Bay Times.