Tuesday, November 04, 2008
3 Ways to Protect Your Travel Investment
Travel costs money. Whether the cost is for a simple one-way flight or an elaborate cruise or tour, what you spend is an investment. In education, enjoyment or business, and it deserves to be protected. As economic times get increasingly difficult, protecting your investment is more important than ever. There are three simple things that you can do to make sure that your travel dollars are well spent and well protected.
1. Take Travel Insurance
Nobody views insurance as important when it comes to vacation. It is. Not just in case you get sick abroad and your insurance doesn't cover you, but also in case unforeseen events prevent your travel. Maybe you've gotten laid off? Travel insurance will have you covered. In the hospital, or stuck in a hurricane? Ditto. Those are obvious scenarios, but there is one that merits more consideration these days. What if your travel provider goes out of business?
Insurance covers that, and if you can't get your cash back from what used to be Skybus, or ATA, or any of the other airlines that folded? If you have insurance, you can get it back and get it back fairly easily. Sure, it costs some money, in many cases between 5 and 10% of the cost of your travel but the protection is worth it.
After all, this year so far saw the end of over a dozen airlines, and the Italian flagship airline - Alitalia got within hours of a complete shutdown. A cruise line, Majestic America said goodbye as well.
2. Use Credit Cards
Although credit cards don't offer the same comprehensive protection that travel insurance does, credit card companies will protect and refund your money if the travel provider doesn't actually provide travel. In many cases, when airlines have given notice to shut down, rather than actually processing refunds, they urge clients to go through their credit cards to be refunded.
The process is complicated, stressful and frustrating but it will ultimately be successful for you in most cases. Did you pay with cash, money order, or a check by phone? These methods of payment may not offer you the same protections a credit card will, because in many cases, the credit card company is withholding a significant portion of funds brought in by credit cards to companies who are in shaky positions financially.
3. Ask The Right Questions
Sometimes the problems aren't with the airline or the tour company, sometimes the problem is with the travel agent that you use. Travel agents can be an incredibly worthwhile resource to use, and able to get you some great pricing and good advice on what to expect on a trip. However, these businesses work on extremely low profit margins and when business turns south, business goes from profitable to marginable and it isn't unreasonable to expect many smaller and mid-size agencies to close their doors during the economic downturn. However, you can avoid problems by asking questions.
Try to use agencies that forward payments to the travel provider directly rather than the agency. If you see an agency that charges itself exclusively for a cruise or a tour, that should be a major red-flag. Doing this is this generally a sign of the agency floating your money before they send payment to a travel provider. Sometimes that money is floated for just a couple days, but in times of trouble, it's not uncommon to see that float last for upwards of 6 to 8 weeks which can put your vacation in jeopardy with the travel provider.
It might be nice to save that extra $50.00 on that cruise, but in the end - the hassle may not be worth it. This is another instance where travel insurance is vital. Your travel provider and your travel agency are not the same things. So if your agency fails, your vacation may still exist - but if the agency floated your money, that final payment on your tour may never be posted to the actual travel provider - leaving your actual vacation unpaid.
This is something that can be managed by the consumer, though. Just ask where the money goes when its charged. Is the cruise line paid directly with your credit card? Or does the agency charge the card themselves and forward payments later? A little research before the charge is made can save you a lot of headache after the fact.
1. Take Travel Insurance
Nobody views insurance as important when it comes to vacation. It is. Not just in case you get sick abroad and your insurance doesn't cover you, but also in case unforeseen events prevent your travel. Maybe you've gotten laid off? Travel insurance will have you covered. In the hospital, or stuck in a hurricane? Ditto. Those are obvious scenarios, but there is one that merits more consideration these days. What if your travel provider goes out of business?
Insurance covers that, and if you can't get your cash back from what used to be Skybus, or ATA, or any of the other airlines that folded? If you have insurance, you can get it back and get it back fairly easily. Sure, it costs some money, in many cases between 5 and 10% of the cost of your travel but the protection is worth it.
After all, this year so far saw the end of over a dozen airlines, and the Italian flagship airline - Alitalia got within hours of a complete shutdown. A cruise line, Majestic America said goodbye as well.
2. Use Credit Cards
Although credit cards don't offer the same comprehensive protection that travel insurance does, credit card companies will protect and refund your money if the travel provider doesn't actually provide travel. In many cases, when airlines have given notice to shut down, rather than actually processing refunds, they urge clients to go through their credit cards to be refunded.
The process is complicated, stressful and frustrating but it will ultimately be successful for you in most cases. Did you pay with cash, money order, or a check by phone? These methods of payment may not offer you the same protections a credit card will, because in many cases, the credit card company is withholding a significant portion of funds brought in by credit cards to companies who are in shaky positions financially.
3. Ask The Right Questions
Sometimes the problems aren't with the airline or the tour company, sometimes the problem is with the travel agent that you use. Travel agents can be an incredibly worthwhile resource to use, and able to get you some great pricing and good advice on what to expect on a trip. However, these businesses work on extremely low profit margins and when business turns south, business goes from profitable to marginable and it isn't unreasonable to expect many smaller and mid-size agencies to close their doors during the economic downturn. However, you can avoid problems by asking questions.
Try to use agencies that forward payments to the travel provider directly rather than the agency. If you see an agency that charges itself exclusively for a cruise or a tour, that should be a major red-flag. Doing this is this generally a sign of the agency floating your money before they send payment to a travel provider. Sometimes that money is floated for just a couple days, but in times of trouble, it's not uncommon to see that float last for upwards of 6 to 8 weeks which can put your vacation in jeopardy with the travel provider.
It might be nice to save that extra $50.00 on that cruise, but in the end - the hassle may not be worth it. This is another instance where travel insurance is vital. Your travel provider and your travel agency are not the same things. So if your agency fails, your vacation may still exist - but if the agency floated your money, that final payment on your tour may never be posted to the actual travel provider - leaving your actual vacation unpaid.
This is something that can be managed by the consumer, though. Just ask where the money goes when its charged. Is the cruise line paid directly with your credit card? Or does the agency charge the card themselves and forward payments later? A little research before the charge is made can save you a lot of headache after the fact.
Labels: economics, insurance, travel, travel agents
Wednesday, January 09, 2008
Protect Your Travel Investment! 3 Reasons to use Travel Insurance.
In my real non-traveling life, I work as a travel agent. This means that I get the pleasure of seeing dozens of people's vacations ruined for reasons that they had no control over. The frustrating part about this isn't just seeing that bloc of time that was set aside for their enjoyment ruined, but also seeing a lot of these clients lose money, sometimes a lot of money. All because they thought it would be smart to save the few bucks up front that Travel Insurance would cost.
Obviously, we all hope that the purchase of insurance would be a waste of money for all involved - but there are three very important reasons that go beyond cancellation that make sense for Joe Traveler to pick up a comprehensive policy.
1. Missed/Tight Connections
Let's say you're taking a cruise. With the flight scheduled and a four hour transfer time, all should be good to get to your cruise... until weather or a missing part for your 757 gets in the way. Suddenly, you're at the port just in time to see the ship sail off and either stuck in Miami for the week, or left to your own devices to meet the ship at the next port. Depending on the kind of sailing you were scheduled to take, you could be out of a day or two of your cruise, or even for the entire trip! If you had insurance, you'll be alright in most cases. You'll get a refund from your insurance company - or reimbursed for costs to get you to your next port of call.
2. Getting Sick
It goes without saying that sometimes that beloved street food, can come back to haunt the next day. Usually, it's nothing that a quick unannounced trip to the bathroom, some pepto and ibuprofen won't fix. But sometimes, it's a lot more serious. Usually, doctors aren't so expensive outside of the US. But, it still adds up. Add in emergency treatment and we could be talking thousands of dollars out of pocket, and sometimes out of pocket immediately. Sometimes, medical insurance will cover these unexpected expenses. But it doesn't necessarily happen all the time. And a lot of times, US insurance companies will be happy to leave their customers in the cold, if the treatment is needed somewhere else, especially in the developing world. Travel Insurance? It takes care of the wallet, when the Blue Cross doesn't extend past that pesky border fence that the US seems so intent on building.
3. Concierge Service
No no, that's not a mistake. Most travel insurers have a hotline that you can contact for emergency assistance. For example, if Joe Backpacker needed out of Zimbabwe yesterday, his insurer can help him make the necessary arrangements or get him in touch with someone who can. Others go a step further.
CSA insurance offers a concierge service with their insurance, for example. Which means someone can use their service to get tickets to that futbol match at Maracana that are so hard to find. Definitely a nice plus. Although that's a nice touch, it still pays to be careful about the insurance before a purchase is made. Study the policies and make sure that what needs to be covered is covered. Not all policies cover for getting mugged. Some reasons for cancellation have exceptions with some policies. (For example, National Guard troops are covered if they get called up with CSA, but only if they aren't called up to serve in combat - like in Iraq or Afghanistan. Other insurance policies, including iTravel Insured don't make such exemptions.) There's no way to predict the kind of problems that could come up on a wander, but it always makes sense to be ready for them, whatever they may be.
Labels: insurance, preparations, travel
