Oil spill vs. wedding plans: Would insurance help?

This post comes from Stacy Johnson at partner site Money Talks News.

Melissa Peralta and Jose Aguilar had been planning their wedding for nearly a year when a family issue required moving the date up by three months. Result? They lost the wedding venue they'd selected and the deposit they had put down to reserve it.

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That's money they'd still have if they had purchased a wedding insurance policy. But wedding insurance isn't something that covers all contingencies. Nothing will.

With the average cost of a wedding now hovering around the price of a new car -- $20,000, according to this website -- it may seem logical to insure a wedding the way you'd insure a car.

Check out the following TV news story I recently did, then we'll delve into details on the other side.

Wedding insurance is exactly what it sounds like -- a policy that will reimburse you if certain specified events occur that damage your wedding budget. The cost of these policies varies widely based on exactly what's covered, but generally ranges from $100 to $600. Whether it's money well spent depends on several factors.

There's no hard and fast rule as to what a wedding policy covers. That's why it's important to read the fine print, consider the odds and cost of each potential problem, and make an informed decision. But following is a list of coverage you might expect. Depending on the policy, some will be standard and some might cost extra.

• Bad weather. The most common cause for concern, this provision kicks in if weather forces the festivities to be canceled. But only the fine print will reveal what the insurer considers "bad weather." While a hurricane would certainly meet the test in any policy, what if it's just a gentle rain?
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• Important people missing. This is what happened to the Aguilars. One of their parents was unable to attend on the date their wedding was originally scheduled. If essential people -- either participants in the wedding or those officiating -- are ill or otherwise unable to attend, this provision should pay to have the wedding rescheduled. Again, you'll have to read the fine print to see how the policy defines an "essential person," how it defines "unable to attend" and exactly what expenses it will reimburse.
• Missing vendors. If your photographer, florist or caterer goes out of business or otherwise doesn't show, this would allow you to recover some of your costs, and possibly the cost of rescheduling the entire event. You'll have to read the policy to find out.
• Location issues. If your venue is no longer in business, burns down or for some other reason isn't available, this part of the policy should reimburse you for lost deposits and may include coverage to pay for rescheduling. It might also cover damage your wedding party does to the venue.
• Military service. If either the bride or groom is in the military, this would cover losses from having to reschedule because of being called to active duty.
• Missing gowns/tuxedoes. This would reimburse you if the store supplying wedding attire goes out of business. It might also pay for damage done to rented clothing, as well as clothing lost traveling to a distant venue.
• Gifts. Your homeowners or renters insurance might cover lost, damaged or stolen gifts. (Yes, according to one wedding planner I spoke to, guests have actually been known to steal gifts.) If it doesn't, some wedding policies will.
• Liability. If your wedding is at a commercial venue, the site should have liability insurance. But if you're having the wedding at your home and your homeowners insurance is inadequate, this part of the policy will cover someone getting hurt or hurting someone else.
• Honeymoon. This provision will reimburse losses from you being unable to go on your honeymoon because of weather, illness or other factors.

While the list above may seem as if it covers every possible contingency, it doesn't come close.

Florida's Gulf Coast is an ideal beach setting for an East Coast wedding because it allows for sunsets behind the happy couple as the knot is tied. Unfortunately, in some parts of Florida's Panhandle, the oil spill is ruining wedding plans. Will insurance reimburse those affected? Yes -- if the couple bought it prior to April 20, the date the spill began.

I talked to a representative from protectmywedding.com and she told me that while the Travelers insurance her company offers won't cover a "named event" -- in other words, a problem that's already happened and still unfolding -- if you had purchased the policy before the spill, you'd be covered. I got the same answer from wedsafe.com.

This is a standard exclusion in insurance contracts. A hurricane, for example, is treated the same way. Once it's already out there, it's too late to insure against it.  

There are, however, dozens of other potential problems that are rarely covered in basic wedding policies, including two mentioned in the above video -- people in the wedding party getting arrested, or the bride or groom getting cold feet.

Deciding whether to buy some types of insurance is a no-brainer: car liability and health insurance, for example. Other types of insurance are a lot more iffy -- and wedding insurance falls squarely into that category. Whether you ultimately should devote part of your wedding budget to this expense depends on three things:

• Your willingness to take risk. If you're the type who has a $5,000 deductible health insurance policy or a $1,000 deductible on your car policy, maybe you're willing to take a risk on your wedding going off as planned.
• The amount at stake, both absolute and relative. As with any type of insurance, the more catastrophic a loss would be, the more you should consider insurance. One person's catastrophe is another's inconvenience. To some people, losing a $1,000 venue deposit would be devastating; to others it wouldn't be a big deal.
• The probability of problems. A hurricane is much more likely to occur in Florida than in Minnesota. Look at exactly what's covered by the policy you're considering, then consider the odds of those things occurring.

Whether to insure a wedding isn't a black and white issue. Don't even consider it if you're unable to thoroughly examine the policy to learn what's covered -- and especially what isn't.

• Do you have the right kind of insurance?

Consider this as a great opportunity to sit down with your future spouse and do something you can expect to do a lot more of during your life together: Decide how to allocate your resources to achieve your joint goals.

If you'd like some fun facts about weddings, here's a cool page of statistics I found. Example: The top wedding city in the world is Istanbul, Turkey, with 166,000 last year. Las Vegas was second with 114,000.

More from Money Talks News and MSN Money:

• Money and marriage: Like a horse and carriage
• Search insurance rates
• Find a better mortgage in seconds
• Enough with the destination weddings already
• A cheapskate's guide to wedding gifts
• Coverage for wedding calamities