Hurricane season is here: Are you covered?

Traveling during hurricane season? Here are some things you should know.

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Hurricane season arrives on June 1 and runs through November 30.

Are you ready?

In case you may have forgotten, 2017 was extremely active and brought 17 named storms, 10 hurricanes and 6 major hurricanes There are islands in the Caribbean such as Puerto Rico, Dominica, and Barbuda that are still in deep recovery mode.

So are your 2018 travel plans covered? Travel insurance is the obvious solution but most travelers have only a vague idea of what coverage they’re buying. So I took the opportunity to speak with Stan Sandberg, co-founder of TravelInsurance.com, to find out what insurance is really needed.

Will travel insurance cover me for delayed flights or even cancellation in the event of a hurricane? How about if my trip is interrupted?

Yes. As long as the travel insurance plan was purchased prior to the hurricane being named, a plan that includes trip cancellation will provide coverage for cancellations, delays or interruptions resulting from the hurricane. There are three types of travel insurance, most of which are included in a comprehensive travel insurance plan.

Trip cancellation coverage provides travelers reimbursement for their insured trip costs if they have to cancel prior to their departure date due to a covered reason. Almost all trip cancellation plans include hurricanes or other unexpected natural disasters as covered reasons for a cancellation if they either cause an extended shut down in airports or render the destination uninhabitable. Some travel insurance plans will even cover official hurricane warnings by NOAA (National Oceanic and Atmospheric Association).

Trip interruption coverage will reimburse the unused, non-refundable portions of a trip if a traveler has to cancel and abandon a trip after it’s already started. The covered reasons in a travel insurance plan for trip interruption are usually the same as the covered reasons for trip cancellation. Some plans will offer a coverage limit for trip interruption that’s actually more than the amount insured under trip cancellation in order to account for any extra expenses incurred to get home early—for example, the cost of an expensive last-minute booking for a one-way ticket home.

Trip delay coverage will provide reimbursement for accommodations, meals, and transportation when your flight gets delayed for an extended period of time (more than six hours for most plans) due to weather or a carrier break-down. Some plans provide full cancellation coverage if the delays cause you to miss 50% or more of your trip.

Missed connection coverage will pay the additional costs of getting you to your final destination if you miss your connection due to a covered reason. Missed connection can be especially valuable to cruise travelers who risk missing their cruise ship’s departure.

It is recommended that you purchase travel insurance as early as possible, to ensure you are protected from unforeseen or unexpected situations. With hurricanes or tropical storms, once the storm is named, it becomes a known hazard, and it’s too late to protect against any losses resulting from that storm. During hurricane season, which runs from June to November, TravelInsurance.com recommends buying a trip cancellation policy as soon as the trip is purchased.

How about if the hurricane destroys the destination I’m heading to?

Yes, if your destination is made uninhabitable by a hurricane or other natural disaster, trip cancellation will provide coverage.

If I'm already there, will the insurance pay for the cost of evacuating me and my family?

Yes, a travel insurance policy with trip interruption coverage will reimburse you for your unused prepaid, non-refundable expenses in the event of a mandatory evacuation because of a hurricane or other natural disaster. Most travel insurance plans will also offer emergency evacuation coverage as well. However, some plans offer emergency evacuation coverage for medical emergencies only. It's important to look for a plan that offers non-medical emergency evacuation coverage for mandatory evacuations due to natural disasters or even civil unrest at your destination.

How about if I'm concerned about a storm but the airlines or cruise company has not cancelled. Can I get reimbursed if I cancel?

This depends on the type of insurance you purchase, and what your plan includes. For example, some plans offer trip cancellation coverage for hurricane warnings issued by the NOAA.

The other option is to purchase a Cancel For Any Reason (CFAR) upgrade, which allows the insured to cancel their trip for any reason. CFAR is typically only available as an option at the time the policy is purchased and requires the traveler to insure 100% of their pre-paid, non-refundable trip costs. And importantly, the traveler must purchases the policy within a set number of days (usually 7-21 days) of their initial trip payment date. With CFAR, either 50% or 75% of the trip costs will be reimbursed, depending on the plan selected.

How does the company's coverage differ when it comes to a tropical storm which may disrupt my vacation but does not turn into a full blown hurricane? Damage is damage, after all.

Any severe weather that prevents you from traveling to your destination or effects your ability to stay at your destination will likely be covered under the Trip Delay or Trip Cancellation benefits. This includes severe tropical or winter storms. But again, if the tropical or winter storm is named, then it becomes no longer insurable.

Is there a point of no return? In other words, what if I decide to take my chances and go to a destination that may expect a hurricane in the hopes that it misses the destination? Would I still be covered if the hurricane hits?

If you take your chances and travel to a hurricane-prone destination during hurricane season, where a storm has not yet been named, then yes. As long as you are able to get to a destination, meaning as long as planes or flying and roads are open, you will be covered if and when a storm does arise that requires you to interrupt your trip.

If the hurricane is already named, however, you would not be covered for any losses resulting from that hurricane.

When does a policy need to be purchased and how soon is it effective?

While a policy can be purchased up until the day before you depart, it's best to purchase travel insurance soon after making the first payment towards the trip. Some benefits and coverages are available only if you've purchased your policy within a short window which typically ranges from 7-21 days from the date you make your initial payment. At the premium end of the travel insurance offering are plans that offer a Cancel for Any Reason benefit. This benefit, generally sold as an optional upgrade, and requires you to purchase within a 7-21 day period from the initial trip payment date. Travel insurance plans become effective the day immediately after you’ve purchased it.

What's a ballpark price for coverage?

There are a number of factors that go into the cost of an insurance plan, but they can be as little as 4% of the total trip cost and up to 10% of the total trip costs. The biggest factors that affect the policy price are age of traveler and the amount of trip costs. Most plans will also add a per-day surcharge for trips over 30 days. Also, many plans offer optional upgrades for specialized coverage such as Cancel for Any Reason, hazardous sports coverage and increases in benefit limits.

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Article copyright 05/21/2018 by Forbes.
The statements and opinions expressed in this article are those of the author. Neither Fidelity Investments nor your employer can guarantee the accuracy or completeness of any statements or data.
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