EDITORIAL

WATER SCARCITY

Complaints continue to pour in from all parts of the city regarding water shortage. This happens when the summer is yet to show its severity. In fact, this scarcity had begun to manifest itself about two months back as indicated by interrupted evening supply, lack of any time for the morning supply and pressure variations. It has been deteriorating by the day so much as that evening supply is now virtually stopped. As the summer tightens its grip on Jammuites, there are genuine apprehensions that morning supply would also be affected. Discreet enquiries made reveal that the current scarcity is being caused either due to power interruption .more

CIVIC AFFAIRS ENCROACHMENTS

One is indeed amused at the news item that Municipality has launched massive drive against encroachments once again. The areas mentioned are Indira Chowk, New Plot, Pacca Danga, Rehari Chungi, Moti Bazar, Rani Park, Chowk Chabutra,.....more

The Inside Truth-III
Admiral Bhagwat’s status

reports aroused resentment

From B L Kak
The Prime Minister, Mr Atal Behari Vajpayee, and his over-active Defence Minister, Mr George Fernandes, will not...
more

Know thy enemy

By O P Modi
One may hope that after what the Talibans have done to the historical statues of Lord Buddha in Bamiyan (Afghanistan)...
more

Continue with privatization

By Bharat Jhunjhunwala
Enron has led to the collapse of the Maharashtra Electricity Board and may be the State's economy. Yet that does not mean tha...
more

Travel insurance:
A guideline

By D K Arora
As many travellers have learned quite painfully, there is always the risk of accidents, illness and loss of one's valuables in ....
more

EDITORIAL

WATER SCARCITY

Complaints continue to pour in from all parts of the city regarding water shortage. This happens when the summer is yet to show its severity. In fact, this scarcity had begun to manifest itself about two months back as indicated by interrupted evening supply, lack of any time for the morning supply and pressure variations. It has been deteriorating by the day so much as that evening supply is now virtually stopped. As the summer tightens its grip on Jammuites, there are genuine apprehensions that morning supply would also be affected. Discreet enquiries made reveal that the current scarcity is being caused either due to power interruption or depleting ground water. This again is attributed to prolonged dry spell in the absence of winter rains. There are also reports of failure of pumps and that usual tug-of-war between the mechanical and civil wing blaming each other rather than addressing to the problem in businesslike manner. And that old habit of holding power managers responsible for burning/damaging of pumps due to voltage fluctuations refuses to die. Upto this the problem is understood.

The million dollar question is what next? Has this Government prepared itself to meet the potable water demand which is bound to increase as the mercury begins to shoot up? Going by the statements and figures reeled out by the concerned ministers and the officials in the recent past, water supply is supposed to have been augmented substantially with the commissioning of new tubewells and filtration plants. All such schemes carried at huge expense are supposed to be in place by March 31. The facts however speak otherwise. The fact is water supply is getting depleted by the day and water managers have no answer asto what next. It is certain that Government is not ready with any contingency plan to quench the thirst of the people with potable water. Where are the new tubewells? Where is the large capacity filtration plant? What has been done to deepen the existing wells if ground water level has gone down? Why nothing has been done to plug the leakages galore? Now don't you tell that tanker supply would be arranged wherever the scarcity is noticed. That is simply not on as far as old city is concerned. Augmentation has to be such asto ensure regular water through pipes. By any reckoning official machinery and those in the power apparatus should have taken the situation more seriously. These are the crisis in the making with trailors already visible in almost all the localities. One shudders to think of the real scene which awaits hapless citizens. They already have enough in terms of acute power supply with curtailment refusing to end even when snows have started melting. Irrespective of how much money is needed, augmentation of water supply needs to be taken up on war footing. The good managers are those who correctly anticipate the emerging situation. Bad managers are those who wake up only when crisis become acute and then they begin patch-work business, socalled emergency measures full of alibis and loopholes that refuse to provide any visible relief. There is a saying that forewarned is forearmed. People would like to see instant reaction in the ruling hierarchy and bureaucracy with practical measures to ensure smooth, adequate and timely supply to the city of over a million.

One would also like to put a poser asto what has happened to the Rs. 435 crore scheme for lifting water from Chenab at Akhnoor to meet the growing demand of the city of temple. For all one knows this scheme was mooted during gubernatorial spell, mentioned off and on by the popular Government but nothing has moved. It shows apathetic attitude. Had it been started in right earnest by now the scheme would have been nearing completion or already pumping water to the city. It is indeed a case of wrong priorities or better call it pusillanimous approach. Non-completion of Burn power receiving station is another example of ignoring vital needs of the people. Even now usual alibi of funds shortage is mentioned for non-completion. This happens when 90% of the works are over and funds starvation comes when only 10% is left to be completed. Let it be clearly understood that such schemes must have priority over frivolous pursuits.

The concerned minister should see to it that new wells are commissioned immediately, other deepened and all possible steps taken forthwith to augment the potable water supply.

CIVIC AFFAIRS - ENCROACHMENTS

One is indeed amused at the news item that Municipality has launched massive drive against encroachments once again. The areas mentioned are Indira Chowk, New Plot, Pacca Danga, Rehari Chungi, Moti Bazar, Rani Park, Chowk Chabutra, CPO Chowk, Kachi Chhawni and Exchange Road. Municipal staff claims to have removed encroachment from footpaths and unauthorised display counters (extension of shops towards roadside). Incidentally, these are the same areas which have been often mentioned in the past anti-encroachment drives. One really can't recollect how many times. This is thus candid admission that earlier drives in the same areas/localities did not last for more than a day. This puts a big question mark on the efficacy of the drive and sincerity of those entrusted with the task. Regular encroachers surface again and again with more menacing form. It makes mockery of such drives. They surface precisely because of the well-known mili-bhagat between the encroachers and those entrusted with the task of removing them. Another type of encroachment that interferes with smooth flow of pedestrian and vehicular traffic is mushroom growth of unlincensed rehris. They position the rehris at most pivotal points. It speaks volumes about those who have miserably failed in removing this nuisance. There is awful regulation in this sphere. Even those licensed keep on extending the areas on wheels with all types of extensions. This is simply not possible except with the active connivance of the municipal staff. It is not the question of self-employment. It is the all important question of interfering with the smooth life and movement of the citizens. Jammu is not equipped to allow all Toms, Dicks and Harrys from all over India to become rehriwalas. No city can afford to be so 'benevolent' whenever drive is launched they are 'made' to enter side lanes. The moment municipal staff/police leaves they re-appear. One really doesn't know who is befooling whom as the nuisance refuses to disappear. In fact, there is ever increasing number of such rehris which shows total lack of control/concern. It is not for any citizen to suggest how the anti-encroachment drive can yield lasting results. It is upto the municipal bosses to do it. People want visible results. Results unfortunately have been conspicuous by their absence despite repeated and tall claims of many anti-encroachment drives carried out in the past. How do you explain encroachments in Purani Mandi area all around the 'power park' and even inside?

The Inside Truth-III
Admiral Bhagwat’s status reports aroused resentment

From B L Kak

The Prime Minister, Mr Atal Behari Vajpayee, and his over-active Defence Minister, Mr George Fernandes, will not be able to live down the monstrous wrong they perpetrated in dismissing Admiral Vishnu Bhagwat from the post of Chief of Naval Staff (CNS). True, the dust has fallen on the Bhagwat episode. But the episode has again drawn attention of various individuals and organisations, with the circulation of the book-Betrayal of the Defence Forces: The Inside Truth.

The book, according to its publishers, Manas Publications, seeks to demonstrate how the Vajpayee Government violated the provisions of the Constitution, Navy Act 1957 and Navy Regulations (Statutory) in what has been termed as "an unprecedented political act", against the disciplinary framework of the Armed Forces, while dismissing Admiral Vishnu Bhagwat.

Soon after he had taken over as CNS, Admiral Bhagwat gave directions to revive a practice he had instituted as Deputy Chief in 1992-94-that is, to send monthly status reports on cases pending to the Defence Secretary and Additional Secretary with a copy to the Financial Advisor (Defence). The practice was refined, using a new computer format, using red papers for cases over five years old, yellow sheets for cases pending for over four years, blue sheets for cases over three years in the mill, and so on up to six months.

Admiral Bhagat says in his book: "I began to send these status reports, every month, to the Minister, to start with Mr Mulayam Singh Yadav and later Mr Fernandes. These status reports aroused resentment and were perhaps seen as an intrusion and ‘interference’ in the working of the MoD (Ministry of Defence), whereas any positive, constructive officer would have regarded them as a sound monitoring device, to help speed up decision-making".

"This is the prevalent culture of the Ministry", the book regrets. It says: "The real power, however, lay in postings, transfers and promotions. This is where the Ministry excelled in creating a constituency, encouraging individuals to tell talks about others, their seniors, their colleagues and the system as it operated".

The book also regretted: "The bureaucrats had not a clue as to the content of a job, but even postings of Captains (Colonel equivalent) in the Navy and Air Force had to go through the Ministry for ‘approval’ and were ‘approved’ at the Additional Secretary level, whereas at the Service Headquarters they had been approved at the level of the Chief. To beat it all in the Army, the Chief of the Army Staff approved the transfers and postings up to the level of Brigadiers, though not promotions".

When Mr Mulayam Singh Yadav was the Defence Minister, the Chief of the Air Staff and the CNS took up with him the case to delegate the administrative powers to the Chief in line with the Army. The bureaucrats, according to Admiral Bhagwat, put up a stiff resistance. However, the Minister approved the Chief’s proposal.

The bureaucrats in the Ministry of Defence again put it up noting that elections had been announced and the Minister might not find time to apply his mind to this important matter. The then Defence Secretary, Mr Ajit Kumar, the book revealed, wrote the final obituary on the file stating that the Ministry would lose all control over the Navy and Air Force, if this proposal were approved.

The book has emphasised that the Defence Service regulations clearly stated that the Chiefs were responsible to the President, through the Central Government, for the operational readiness, preparedness, training organisation and administration of the Services. Mr Mulayam Yadav, finally, signed and approved the file on March 12, 1998, with the comment that he was not at all convinced with the logic of the Ministry of Defence, and the proposal of the Chief of the Navy Staff and the Chief of Air Staff on this subject was approved.

Interestingly, however, the Defence Minister (Mr Mulayam Yadav) had forgotten to put the date under his signature, though the out-diary number and date (12.3.1998) was clearly put on the margin of the Minister’s note. Mr Mulayam Yadav’s approval was not honoured, because the new Government took office on March 19 and mr Ajit Kumar, according to Admiral Bhagwat, knew he could simply lock the file away.

After Mr George Fernandes took over as the country’s new Defence Minister, Admiral Bhagwat informed him that his predecessor (Mr Mulayam Yadav) had approved the proposal. "The Defence Minister heard and nodded, grasping the logic, the Secretary (Mr Ajit Kumar) pretended not to hear, and the minutes of the very first meeting failed to record this point", Admiral Bhagwat says and adds: "I patiently reminded the Minister at the next morning meeting in April and he said he would call for the file and look into it".

Admiral Bhagwat and Air Chief dutifully reminded Mr George Fernandes in every alternate morning meeting and the response was always the same. It never seemed to be happening. And Admiral Bhagwat’s confession: "So they won, we lost! They had mastered the system in spite of this being my 7th tenure at Naval Headquarters and now although a Chief the bureaucracy still won, as it almost always did".

Admiral Bhagwat’s book has an interesting piece of information: The Air Chief had once at dinner told the previous Minister of State, Mr NV Somu, and even Mr George Fernandes that Pakistan we could take care of; how do we deal with our ‘friends’ in the Ministry who were always on the other side.

And the book laments: "This has been the sad story and it is getting sadder. Most senior officers of the Services take it, while away their tenures, and learn to enjoy other pastimes. The message is ‘massage the ego of the civilian’. If you can, keep you spine, if you have any left, away from the scene".

Admiral Bhagwat has also placed himself on record as saying: "If we are lucky we don’t see a war; though I daresay even the price being paid by the soldier in several parts of the country where plain poor governance has alienated the people, is heavy enough. Who cares, as long as media management is good we’ll get by, so look after your favourite journalists who will report what you want them to. It never pays to tell the truth to others. Behead the ‘messenger’ who dares tell the truth".

(To be continued)

Know thy enemy

By O P Modi

One may hope that after what the Talibans have done to the historical statues of Lord Buddha in Bamiyan (Afghanistan) the real face of India’s enemy would have become manifest to the NDA government at the Centre. It is the same mindless human’s face which despite India’s unilateral cease-fire continues to march straight into security forces camps, opens fire and gets killed in the hope that it would go to the heaven after killing the "infidels".

Despite vehement international outcry and appeals by the Islamic countries, against the demonic resolve of the Talibans to destroy the world heritage of the tallest statues of Budhha the monstrous regime in Afghanistan has shamelessly announced that it has completed the barbaric assignment entrusted to it by its chief Mulla Mohammad Omar.

It is this Pak-US Frankenstein that has entered J&K in large numbers and is now spreading its tentacles far and wide taking advantage of the unilateral cease-fire. It is he who mutilated the bodies and gouged the eyes of our valiant soldiers who had become Pakistan’s prisoners of war in Kargil. Let New Delhi realise that we are up against a most ruthless, mindless, barbaric and determined enemy. He does not understand our language of peace and cease-fire. He is vicious and cannot be won over by any sweet talk, compassion and love. He has to be dealt with firmly and ruthlessly.

Loose Talk

"Sky is the limit", said Narasimha Rao former Prime Minister in respect of solving Kashmir tangle. " The issue could be settled within the ambit of Insaniyat", said Prime Minister Vajpayee. "There is no cease-fire, it is only a cessation of combat !", says India’s Home Minister Advani. Having said this the Home Minister repeatedly says that the cease-fire should not be taken as a sign of weakness! "We are giving a chance to peace", say the leaders of the NDA government.

All these and many more lax statements are off and on made by some Indian leaders while referring to the complex Kashmir problem. And all this is said despite an unanimous resolution passed by the Indian parliament declaring whole of Jammu & Kashmir including PoK and Northern Areas as integral parts of the Indian Union. Is there any scope for statements of this sort when the Prime Minister himself says that there cannot be any compromise over the integrity of the country?

In fact the cease-fire is not proving to be a chance for peace. However it is turning to be an opportunity for the militants to organise themselves, bring in heavy weapons and establish their bases in the state. Security forces are being attacked in their camps. Officers and men are being killed. Hundreds of civilians have been done to death and many more have been rendered home less during the cease-fire. Migration from even Rajouri and Poonch has started by both Hindus and Muslims. Where is the peace then?

Such dilly-dallying attitude towards the most consequential problem of Jammu & Kashmir has not only emboldened the enemy it is also demoralising the security forces and confounding the people at large.

Arjuna’s syndrome

The fact is that the NDA government is suffering from Arjuna’s syndrome.The malady persists. During the last millennium of abject surrender to the aggressors, the Indian society has exhibited the same symptoms which Arjuna displayed when the Mahabharta war was about to start. On seeing his kith and kin, gurus, and friends arrayed on the opposite side, Arjuna vehemently argued before Lord Krishna against the war; though it was precipitated by the Kurus by refusing to part with the empire which legitimately belonged to Arjuna and his brothers. Getting no favourable response from the Lord he sat down on the seat of his chariot and abandoning his bow and arrows said, "Should the sons of Dhrtarashtra with weapons in hand slay me, unresisting and unarmed in the battle, that would indeed be better for me" ( Gita:I. 46,47.) To this the Lord said, "Whence has this unmanly dejection come upon you, at this juncture, O Arjuna? Yield not, O Partha, to feebleness. Cast off this petty faint-heartedness. Wake up, O vanquisher of foes!" (Gita:1,2 II)

Through out the discourse in the Gita the Lord exhorts Arjuna to discharge his duty fearlessly, selflessly, and without any attachment for the results. The escapist mentality is decried and as the death is inevitable for the one who is born, one should not be afraid of it. The Indians failed in their duty to protect their motherland from aggressors during the past millennia because the message of Gita was lost upon them. To face the growing threat to the sovereignty of their country from the fundamentalists of all hues the Indians have to go back to the teachings of Bhagavad Gita. The greatest sin, of course, is to lose freedom and value slavish mentality. The message of the Gita is clear and is profoundly applicable now as never before.

No war, much less a proxy war, can be won without firmness in words and deeds. Finding that at the ground level the unilateral cease-fire is working to their advantage it is but natural that Pakistan and its agents should consider it a sign of India’s "weakness". The challenge of a savage and heartless enemy can be effectively met only when we stop believing that he is weak and that he can be won over by pep talk of peace and friendship.

Continue with privatization

By Bharat Jhunjhunwala

Enron has led to the collapse of the Maharashtra Electricity Board and may be the State's economy. Yet that does not mean that the policy of privatization itself is to blame. Just as one does not abandon the road due to an accident so also we must not abandon privatization due to this disaster. The real difficulty is that the Government machinery is not willing to pass on the benefits of privatization to the people and wants to usurp all of it itself. The people will benefit from privatization only if the savings from subsidies are passed on to them.

There has been many a case of blotched privatization. Writer activist Arundhati Roy has pointed out that the Bolivian Government roped in US Engineering giant Betchel to privatize water supply in the city of Cochacomba. The first that Betchel did was to triple the price of water. The consequent public uproar led to Betchel having to flee. True though these facts may be, this does not mean that privatization was wrong. Let us say the cost of production of water under the public sector was Rs. 10 per cubic metre but it was being provided at Rs. 2 with Rs. 8 being the subsidy. It can be that the private producer brought down the cost of production from Rs. 10 to Rs. 5, added its profit of Rs. 1 and sold the water for Rs. 6. The consumer indeed would have to pay three times the price. But that does not mean that is bad. The country would be now saving Rs. 8 in subsidies while paying only Rs. 4 as additional charges. The people will nevertheless not buy this, and correctly so, unless the saving of Rs. 8 in subsidies is passed on to them in the form of tax relief. If the Government continues to tax the the people as previously and imposes additional burden by tripling the water charges then indeed there is reason to resist privatization. The problem lies not in privatization per se. The problem lies in the Government depriving the people of the benefits arising therefrom.

But this happy situation does not mean that private business is a do-gooder. We know that children as young as 7-8 years were whipped and made to work for up to 16 hours in the textile mills of England. Drug companies routiney charge exorditant prices for their life saving products. Our zamindars would not only pay meager wages but also molest the womenfolk of the poor. Private doctors will remove organs of unsuspecting patients and sell them away. Might it then be that privatization will land us from the frying pan into the fire?

Indeed this is possible as the Enron fiasco indicates. Maharashtra embraced this MNC in the hope of meeting its needs of power. But it has landed into a soup. It is not able to buy the power at the agreed price and is having to pay for not purchasing the agreed amount of power.

But the public sector is not better. Russia collapsed under its weight. Fully protected from competition, Government officials ran inefficient mills, produced expensive goods and forced the people to buy them. Indira Gandhi nationalized the banks in the sixties leading to the banks squandering away people's savings through bad loans. The State Electricity Boards have become institutions of stealing power for private gain.

The difficulty then is that, left to itself, neither the private or the public sector is able to deliver. The solution to this difficulty lies in friction between the two. The division between the Kshatriya and Vaisya in our tradition is a part of this solution. The primary responsibility of producing various goods like water, electricity and banking services lies with the Vaisya. But he is not to be left free like the British textile mill owners or the Indian zamindars. Instead the Kshatriya was to keep on eye on their performance. The British Government performed this same function by enacting legislations such as the Factories Act; and the Indian Government by regularizing tenancy. The friction between the private sector provider and the public sector regulator made the private sector function properly.

It could be said that if the Government has the capacity to regulate then why does it not use that capacity to provide the services itself? The problem is tyranny of the State. Theoretically the Russian Government could have run its industries efficiently. But it was not able to do so because there was no agency which could watch its efficiency. What started off as a pro-people socialist measure gradually turned into its opposite. The market is a great instrument for begetting efficiency.

The separation of the provider and regulator is one step better. If Betchel raised the prices of water three times there was atleast the possibility of protesting before the Government. If the municipality had made a similar increase who would not complain to? If Enron has taken Maharashtra for a ride at least the people have balked. Separation of the roles implies that two agencies, not one, have to degenerate for the system to fail. Just as a tricycle is more stable than a bicycle similarly involvement of three agencies --- Government, business and the consumer --- is more stable than the involvement of two.

It is nevertheless possible that the Government regulator can be bought off by the business. Even if that were the case it is still not worse than direct provision. It will always be easier to put a wedge between the Government and the business than pleading one's case before either of the agencies singly.

The problem with Enron lies not in privatization. It was better to have Enron produce the power and for the the Government to regulate. But the Government blotched it by bending backwards to accommodate each of its demands. There was a failure of Governance. The Union Government was anxious to attract Foreign Investment and did not heed the warning given by its own agencies like the Central Electricity Authority. The State Government was probably more interested in the kickbacks. Enron is reported to have spent Rs. 33 crore in 'educating' the Indian people! This only means that it was a case of bad privatization. We must renegotiate with Enron. It does not mean that the policy of privatization was bad.

Privatization must go on despite Enron. These are lessons we have to learn along the way. It is time we recognize that MNCs come to India not to secure our development but to extract our wealth. Thus the Government will have to overcome its infatuation with dollars for privatization to succeed.

The bigger problem is that the benefits of privatization have to be passed to the people. It is clearly nonsensical to impose tax of Rs. 8 on people to provide them subsidized water at Rs. 2. But it is worse to continue to impose the tax of Rs. 8 and also ask the people to buy water for Rs. 6. If the people have to be persuaded to pay Rs. 6 for the water, as they must indeed do, it is also their right to get relief in the tax. Unfortunately here the Government is entirely frozen. The Government establishment wants to continue taxing the people. It wants to augment its kitty for corruption and wastage. It would be easier to sell privatization to the people if it were tied to specific reductions of taxes. This is what the Government must do.

Travel insurance: A guideline

By D K Arora

As many travellers have learned quite painfully, there is always the risk of accidents, illness and loss of one's valuables in journeys. The suffering and losses can be costly, and refunds or other compensation can be hard to obtain. For these reasons, it is wise when planning one's trip to know about various kinds of travel insurance.

Accidents are unpredictable. So can be illness. Sometimes, the best emergency aid is close at hand, but often there is nothing nearby but deep blue water, snow-capped peaks, dense jungle or a desert.

I am reminded of an incident in which an adventurous acquaintance of mine, in his early 30s, was scuba - diving in the apparent serenity of Caribbean Sea off the Grenadines. Suddenly, a shark bit off his right leg. In excruciating pain, he struggled ashore, where fortunately he found a villager to help him. But there was no doctor and no nurse. There was not even a first aid station. Fortunately, the villager did have access to a two-way radio, which eventually brought paramedical assistance.

A week and spending of thousands of dollars later, much of it on a flying ambulance, my friend was resting comfortably in a hospital in Philadelphia, USA. Surgeons there had reattached his leg, and he hoped to walk unassisted soon. He was especially grateful that he had the foresight before his trip to buy enough travel insurance to cover all of his emergency expenses.

But let us now think about you - the reader and an avid traveller. Do you need travel insurance when you drive to a national park for a week's vacation? Yes! Do you need it when you sign up for a deluxe escorted tour of London, Paris and Rome, even with the excellent physicians and hospitals in those cities? Yes!

Do you need it on a bicycle tour of Vermont, hike in the Swiss Alps, a carefree week at a couples resort in Jamaica or at Club Med? Yes! Do you need it for a cruise on a 2,000 passenger superliner that has a state-of-the-art dispensary on board? Yes!

Of course, there's a lot of travel insurance out there, and you don't have to buy everything that's offered. So before you visit a travel agent or any other insurance provider, investigate the coverage you already have.

Suppose you have an accident in a rented car. Will at least some of the property or personal injury damage be covered by the auto insurance on your own car, by the credit card company to which you charges the rental, or by other personal insurance? Only if the answer to all of these questions is 'no', then you might like to have the collsion - damage or liability waivers that rental companies try to sell. Suppose you need emergency medical assistance in a foreign country or abroad a cruiseliner. Who pays? Most probably you, unless you have purchased insurance that specifically covers it.

Suppose your baggage is lost en route of valuable jewellery stolen. If you have homeowner's insurance that covers losses away from home, you don't need to buy anything extra. Limited emergency assistance may be provided through possession of a credit card. And while travel insurance may protect you against default of an airline, cruise line or a tour comany, it won't cover default by any business, such as a travel agency, for which you paid directly.

Here, I am reminded of an incident concerning a friend on a trip from Washington DC to Chicago on a Greyhound bus. He had done a good amount of shopping during his trip and was also carrying some expensive gifts from India for his friends. His baggage was mishandled and lost during the trip. You can imagine his plight. He had not insured his baggage.

For many travellers, your most important coverage is for penalties for interrupting a trip or cancelling it, shortly before departure. You could lose your full payment and have the added expense of getting home from wherever the trip is interrupted. The cancellation penalities are stiff, because tour companies, airlines, cruise lines and resorts are not notably generous when they suddenly find empty space on their hands that they can't resell. It used to be easy to buy this insurance alone, but claims have proved so costly to companies that they now tend to package cancellation with health, accident and baggage coverage that is less costly to them.

There are many restrictions to this type of coverage, however. In a typical case, you cannot expect coverage, if you have prepaid a trip and simply decide not to go. You probably will be covered in the event of death or serious illness of a travelling companion or a close relative at home. But you usually won't be covered, if a pre-existing health problem is still present' even a routine visit to a physician can rule you out, if your condition is connected to a chronic ailment, even one that's been inactive for years. The exception to this rule is that you will be covered, if you have purchased the insurance within seven or 14 days, depending on the insurance company, and having paid the initial deposit for the trip itself.

The insurance can be costly, but unfortunately, often worth it. Although you may be shelling out several hundred non-refundable dollars for insurance, it could potentially cover unlimited amounts in tour payments, though actually it may be used for only $50 in penalities, if you cancel far ahead of departure. No matter how much cancellation insurance you buy, it will cover only the amount that is not refunded by the travel companies. But if your trip goes off smoothly, you can't get a refund from the insurance company, and your coverage could end up costlier than your potential losses over the trip. Cancellation and refund policies of major tour companies and cruise lines vary widely. Obviously, insurers prefer those offering generous refunds.

They may even refuse to cover companies with stiff cancellation policies, such as the long-standing policy of Renaissance Cruises, which advertises luxury at bargain fares. For example, Renaissance could not give any refund, if you cancelled within 120 days of departure. It charged $1,500 per cabin for earlier cancellations. At booking time, you paid a deposit of $750 per persons, with the balance due no later than 120 days before departure. After Renaissance adopted these restrictions in February 1999, major insurers stopped covering the company. Stung by this and by continuing stiff criticism from the American Society of Travel Agents for marketing directly to consumers, instead of through agents, Renaissance announced in mid-June its intention to revise the policies.

One must also be careful about the total insurance required. One can easily buy more insurance than the possible need. For example, while travel insurance may guarantee payment for medical care wherever you are, or evacuation to where there are better facilities, you may already be protected by your employer's health plan or any other medical or accident coverage.
...CNF

 



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