Margaret Davis has bought travel insurance for more than 20 years for one reason: It takes three hours to drive from her home to the nearest major airport.
Living in the northwest corner of Iowa - dubbed "Little Switzerland" for its scenic rivers and jagged limestone bluffs - Ms. Davis knows that bad weather might prevent her from reaching the Minneapolis-St. Paul airport in time for a flight.
The $25 cancellation insurance Davis bought last year in preparation for a January trip paid off when a family emergency forced her to stay behind.
In this instance, the insurance saved her the cost of her ticket - more than $300. Most of the time, the policy offers a protection against anxiety.
"It's worth the peace of mind to know I'm not going to get stuck with a $400 ticket," says Davis.
Consumers often identify travel insurance with the $10 flight-accident plans many buy before heading to their departure gates before a flight.
Yet in the past 10 years, insurers have broadened their offerings, tailoring a variety of new packages for travelers with specific needs and financial concerns.
Services range from protection against the default of a travel agency to 24-hour help in case the traveler loses his passport or needs money wired. Other policies are designed for school groups, business travelers, and cruise passengers.
The most popular offering from Travel Guard International, the nation's largest travel insurer, is a bundled policy that covers trip cancelation, default by a trip supplier, medical services, lost or stolen baggage, and money transfers.
The cost of the policy is based on the traveler's age and the price of the trip. For example, a 55-year-old going on a $3,000 vacation would pay $177 for the comprehensive plan, according to Dan McGinnity, Travel Guard's vice president of communications.
Coverage for baggage protection alone would run about $35. Student plans cost about $80. Full-year coverage for travel anywhere more than 150 miles from home costs between $60 to $250.
Baby boomers have become the primary users of travel insurance, says Mr. McGinnity, spending billions on coverage over the past decade.
Some experts credit the surge to the generation's increasingly conservative attitudes. Jack Maddox, president of the Institute of Certified Travel Agents in Wellesley, Mass., points to their pocketbooks.
"As we age, we tend to buy more expensive vacations," says Mr. Maddox. "The more expensive the investment, the more people will consider buying insurance."
Still, even those who have bought insurance a number of times are often bewildered by the fine print and coverage overlaps that may already exist, costing thousands of dollars in excessive payments over a lifetime.
"I think there's a lot of ambiguity. People don't know what they have," says Sue Juliano, senior editor of Consumer Report's Travel Letter. "Americans spend all their time thinking about the trip, not planning for what might happen."
Ms. Juliano and other consumer advocates point to a handful of insurance options that often offer unnecessary coverage for most consumers.
* Airplane flight insurance, which covers a passenger in case of an accident. The airline industry's safety record makes this plan relatively obsolete, experts say.
* Collision and liability insurance for a car rental. Vacationers often pay about $15 a day for such coverage. But consumer advocates point out that credit cards often carry much of the insurance (usually collision). The same holds true for many automobile-insurance policies.
* Baggage insurance. Airlines already insure each bag for up to $2,500 on domestic flights, and $9 per pound on international flights, with a $635-per-passenger limit.
Experts point out that some homeowners-insurance policies cover a high percentage of the value of lost baggage, but large deductibles might surpass the value of the lost-baggage claim.
They add that travelers ought to make a list of packed items because airlines will usually negotiate the price of a lost bag.
Another tip: Buy travel insurance from an independent provider. Policies offered by a travel company would likely be worthless if the company goes bankrupt. Thousands of passengers with Commodore and Premier cruise lines found themselves in that situation when the two companies went bankrupt late last year.
Read the fine print
Many agents recommend flight-delay and cancellation insurance, above other offerings, especially for those who might be vulnerable to missing a connecting flight or cruise. But travelers are liable to lose at least half of their principal payment if they fail to cancel their trip sooner than a week before departure, according to Maddox.
And cancellation and delay insurance won't apply in every circumstance. Insurers are usually very specific about what they'll allow as a legitimate excuse. Acceptable reasons include family emergencies, bad weather, labor strikes, jury duty, and termination of employment, but little else.
(c) Copyright 2001. The Christian Science Monitor