Insuring your travel plans

It wasn't that long ago that the threat of another terrorist attack caused some people to be wary of traveling. Now it's the threat of losing a job.

In the wake of the Sept. 11, 2001, terrorist attacks, travel-insurance companies added terrorist incidents to the list of reasons they would cover for canceling a trip.

Coverage in case of a layoff, as it turns out, has been there all along. In many cases, if you or your traveling companion lose a job, travel insurance will compensate you for nonrefundable outlays such as prepaid tours, cruises or airline tickets.

"It's been in most policies for many years," says Jim Grace, president of nsuremytrip.com/">Insuremytrip.com, an Internet broker of travel policies sold by 23 U.S. and Canadian insurance companies. "We're just starting to get a lot of calls on it."

Insurers aren't the only ones to latch onto travelers' desires for some protection against economic uncertainty.

JetBlue Airways recently announced it would offer cash refunds to passengers who lose their jobs after buying tickets.

The refund request has to be made at least two weeks before travel and applies to tickets purchased through June 1 for travel at any time. Under some circumstances, refunds also can be requested for up to nine people — friends or family members.

Normally, JetBlue charges a $100 cancellation fee and offers whatever money remains as a credit for future travel.

Starting with cruises departing May 1, Norwegian Cruise Lines will offer an insurance plan that covers a cash refund of cancellation fees for passengers needing to cancel because they've been laid off. Prices start at $29, depending on the fare. Passengers must have been employed at the same company for at least a year.

Also gaining interest:

• Riders to standard travel-insurance policies, available for an extra $25-$50, that allow "cancel for work reasons." An example would be if you or your traveling companion were required to work during the time you scheduled vacation.

• "Cancel for any reason" coverage is usually sold as part of a premium policy or an add-on to a standard policy. Globus, the largest U.S. tour operator, sells a $30 rider on a policy through TripMate that allows cancellation for any reason up to 24 hours before departure.

Buyer beware

As anyone who's ever tried to cash in on travel insurance knows, there are lots of caveats. Read the fine print before buying insurance and compare coverage and prices at Insuremytrip.com.

Some points to keep in mind:

• Consider if you need to buy any type of travel insurance; a basic policy adds 4 to 8 percent to the cost of a trip. Many tour and cruise companies have lowered their deposit requirements, putting you at less risk should you have to cancel.

• When it comes to covering trip cancellations due to layoffs, most policies require that you or your traveling companion have worked full-time for the same employer for one to three years.

• The layoff (some policies also cover job transfers) has to be unforeseen and involuntary. You can't volunteer for a buyout or intentionally get yourself fired.

• "Cancel for work reasons" and "cancel for any reason" coverage usually requires that you buy the insurance within two to three weeks of making your first trip deposit.

• Expect to file lots of paperwork to prove your work situation, including notarized letters from your employer.

• Know your priorities. Purchasing insurance through a tour operator, airline or cruise line might seem easy or cheap, but if you're concerned about the company's financial stability, buy the insurance through a third party. Companies can't insure themselves against financial default, so policies purchased through a tour operator or cruise line won't cover you if the company goes out of business or files for bankruptcy.

Carol Pucci's Travel Wise column runs Sundays in travel and at www.seattletimes.com. Comments are welcome. Contact her at cpucci@seattletimes.com or 206-464-3701