Coverage Already in Place Can Help Protect Travel Plans

Ahh, summer—vacations to the coast or the mountains, cruises to Alaska, treks to far-off, exotic lands. Even if you’re not treating yourself or your family to a once-in-a-lifetime vacation this year, some of your insureds may be. And now is the time to make sure they have their coverages in order.

While travel insurance sites abound on the Internet, hawking coverages for everything from cover for lost belongings to trip cancellation insurance, your insureds may have some of their coverage already in place—in their homeowners and auto policies. And before they go on vacation is a good time to review your clients’ policies with them to look for any endorsements or higher limits they might need.

Auto insurance
Most personal auto insurance policies cover accidents and losses throughout the U.S. and Canada. However, according to the Independent Insurance Agents of Texas (IIAT) there may be changes to liability limits when the insured leaves the state of residence.

Personal auto insurance policies usually provide some coverage for insureds who rent a car while on vacation, but it’s worth reading the fine print for limitations on what is covered. In California, for example, liability for cars rented by the insured is covered, but collision and damage caused by vandalism is not. Texas personal auto policies provide coverage for damage to the rental car and third-party claims arising out of the operation of the rental car, but there are some restrictions. Cover-age applies to “standard automobiles,” such as passenger cars or trucks. If the insured plans to rent a vehicle that is not considered standard, such as a large truck for hauling furniture, a recreational vehicle, or a snowmobile, the policy should be examined carefully for what is covered and what is not.

And Mexico is another world when it comes to coverage for vehicles traveling into that country. The standard personal auto policy does not provide coverage for accidents that occur in Mexico. There are endorsements to the policy that can and should be added to the policy if the insured is traveling to Mexico. In general they extend coverages to varying degrees for auto travel in Mexico. However, the Mexican government does recognized liability policies issued by U.S. and Canadian companies, and the insured should be advised to purchase additional protection from a Mexican insurance company.

Homeowners coverage
Like the auto policy, homeowners insurance extends coverage to the insured when he or she is not at home. Homeowners policies generally cover personal property the insured owns, wears, or uses anywhere in the world. However, limitations do exist. In Texas, coverage away from home is limited to 10 percent of the personal property limit and is limited to named perils only. In California, items worth more than $1,000, such as jewelry and artwork, may not be fully covered unless the insured purchases a rider for such items.

Policies require that the police be notified of a loss by theft, and the insured should secure a copy of the police report before leaving the area, especially if the loss occurs in a foreign country. In addition, other away-from-home risks are often covered by homeowners policies, such as liability for accidental damage to people or property and coverage for third-party claims stemming from the operation of recreational vehicles.

Personal umbrellas
Personal umbrella policies that provide excess coverage over exposures covered in an underlying personal auto or homeowners policy, may be of interest to some insureds, especially those who travel frequently. Broader coverage for traveling in foreign countries and for operation of non-owned vehicles, such as automobiles and recreational vehicles is often available in a personal umbrella form.

Annual travel policies
Although most per-trip travel insurance is sold through travel agents or directly to the insured over the Internet by companies that specialize in such policies, at least one travel insurance company, Travel Guard International, is actively considering offering an annual travel insurance program through independent insurance agents. Selling travel insurance through independent agents “is a distribution channel we’re looking into … especially with our annual policies. We think that’s a natural fit, ” said Dan McGinnity, vice president of communication for Travel Guard. He added that when agents talk with their clients about their homeowners and auto insurance, it would be natural for them to include annual travel insurance policies, especially for those clients who are frequent travelers. McGinnity said the company thinks distributing the annual policies through insurance agents would work well within the independent insurance agency system, adding, “It’s something we’re very interested in.”

He noted that is common in other countries for insurance agents to sell travel policies. Travel Guard has an office in Brighton, England, where most insurance agencies offer travel insurance to consumers in addition to home and auto.

Topics Texas Auto Agencies Personal Auto Homeowners Mexico