With inflation and gasoline prices eating away at our vacation dollars, many Americans may be unaware that they have already paid twice for something even before leaving home on holiday.
Chances are that if you have a home-owner or related type of renter insurance policy, the valuables you takealong with you on vacation already are covered to some extent, and added insurance is unnecessary in many cases.
People with a homeowner policy have at least $1,000 of coverage away from home for fire, theft, vandalism andmisplacing or loss of property, according to Charles R. Rinehart, senior vice president of Fireman's Fund insurance Companies. People who take along property exceeding $1,000 on vacation also may be covered already.
"Most homeowner-type policies limit recovery on losses occuring away from home to 10 percent of the house-hold-contents coverage stated on the first page of the policy," Rinehart notes. "For example, if you have $50,000 household-contents coverage, $5,000 is the recovery limit for items damaged or stolen in the course of travel."
However, he warns, expensive items like jewelry, furs, watches and cameras, and such things as airline, bus and train tickets, credit cards and cash have specific coverage limits, usually $500 -- except for cash, which is limited to $100. Federal law limits the loss per credit card to $50 though it can add up because travelers often carryas many as five or six credit cards.
"It's always dangerous to carry a lot of cash or credit cards," Rinehart says. "While most homeowners-type policies at least partially cover currency and credit-card loss, the recovery usually isn't immediate. Travelers checks that can be reissued immediately after they are lost and are far safer and more convenient."
Rinehart says you should ask your insurance agent about a personal property "floater" if your basic hoomeowner policy isn't enough to cover your needs.
Floaters, he says, are "all risk" -- meaning they pay for all causes of loss except wear and tear, deliberate damage and "mysterious disapperance" with coverage limits chosen by the policyholder. A "mysterious disappearance," according to the insurance executive, is when there is no visible evidence of forced entry or effort of theft. One benefit of floaters, he says, is that they are available with no deductibles, unlike homeowner policies which carry deductibles of $50 to $250 or more.
Rinehart says the cost of a floater depends on the type and amount of property and the location of the policyholder. The cost of a personal jewelry floater could range from $1 to nearly $3 per $100 of coverage.
A less obvious but equally real danger to vacationers is that they could accidentally injure somebody or cause property damage resulting in a liability claim.
Again, Rinehart says, you already may be covered against such an occurence in a homeowner policy because they generally provide worldwide coverage for that possibiliity. You can find out the maximum protection you have by checking with your agent or checking the first page of the policy. In the event you are not covered, special liability policies are available.
Property damage payments typically are limited to $250 per occurence. Medical expenses must be incurred or ascertained within a given time from the accident date-- normally three years. Legal defense costs are included if suit is brought.
If you're driving, Rinehart notes, bodily injury and property damage are not covered under homeowner or personal liability policies, but under a separate auto policy.
"Insurance requirements vary from state to state, and while the auto policy generally conforms to regulations wherever the motorist drives, there are exceptions," he says. "if you're traveling by car, check with your insurance agent to make certain your insurance satisfies the law of the land."
One of the exceptions is Mexico. "The only insurance that Mexican authorities consider valid is that sold by Mexican insurance companies. And you can go to jail if you can't prove you have valid insurance, even if it was your car that was damaged. Your hometown insurance agent can arrange coverage for you, and coverage in Mexico is also widely available from agents located in cities along the border."
Your regular auto policy wll usually cover you if you plan to rent or borrow a car, but Rinehart suggests that car renters give special consideration to the rental firm's offer of a "waiver of collision liability" for $2 or $3.
"If you buy the option and damage the rental car you won't have to pay the rental firm's deductible, which is usually $200," he says. "On the other hand, if you don't buy the option and the car is damaged, the rental firm will probably demand full payment of the deductible when the car is returned."
Most health and accident policies provide coverage anywhere in the world. Few hospital emergency rooms in the United States require immediate payment from patients with an identification card confirming that they have insurance, but abroad it may be a different story. A medical facility may require you to pay your bill before leaving. Then it's up to the patient to make an insusrance claim for reimbursement, substantiating the claim with receipts.
There are medical insurance policies on the market for travelers who aren't covered. The policies provide an indemnity -- typically $30 a day -- for injury or illness. Also available are trip accident and death policies providing short-term coverage.
Another type of insurance for air travelers is "charter fare protection." This coverage, Rinehart says, is offered by a handful of companies to protect the financial interests of policyholders who pay in advance but can't make the trip because of accidental injury or illness. Some such policies cover airfare only; others, a minority, cover entire tours, including airfare and accommodations.