Is travel insurance worth the cost? How much money are you willing to pay for peace of mind? That is the real question. Travel insurance can save you considerable amounts of money in the event of accidents, illness, missed flights, lost baggage, theft, travel-company bankruptcies, emergency evacuations. Travel agents always recommend insurance, but they also make a commission on those sales. I used to have a hard and fast rule that I would never purchase any travel insurance for domestic travel and I would always purchase travel insurance for any international travel.
My biggest concerns are always medical care and evacuation from a remote location in case of an emergency. As situations change with my family’s health difficulties and the rigidity of airline and travel change fees as well as cancellation policies, I am starting to rethink my rule. Take these considerations into account when deciding if travel insurance is worth the cost:
Is Travel Insurance Worth the Cost?
Does your health insurance cover travel abroad?
Check with your medical insurance provider to find out if you are covered when overseas. If you are, also find out what exclusions, deductibles and coverage percentages are included. Medicare does not cover travel out of the USA. Even if your health plan does cover you internationally, you may want to consider buying a supplemental policy to deductibles and exclusions. In emergency situations, the hospital will typically work directly with your travel-insurance carrier on billing, but not with your regular health insurance company, so you may have to pay upfront if you don’t have travel insurance.
The US State Department periodically issues warnings about traveling to at-risk countries. If you’re visiting one of these countries, your cancellation and medical insurance will likely not be honored, unless you buy supplemental coverage.
Does your credit card company offer automatic travel protection?
Many credit cards offer travel protection as a perk. Often it is only supplemental to any other insurance you may have or for instance if an airline offers lost baggage insurance up to $250 per person, any claims above that amount would be covered by your credit card. Many credit cards offer collision coverage for rental cars. It is rare for cards to provide emergency medical care coverage. They mostly cover delayed travel, lost baggage or trip cancellation. Most cards do not provide coverage if you are over the age of 65. It is very important to check with your credit card company and carefully review all the details.
Do you or your family members have any illnesses?
Most of us do not worry about ourselves getting sick prior to a trip. Between getting time off work and arranging schedules, usually we are going on vacation no matter what! However, you really need to consider the health of your immediate family. If you have aging parents or anyone with an illness, travel insurance becomes a much more important consideration. If you need to stay home with a loved one you will want to reschedule your trip and not lose any money. This is also gives you the confidence to plan ahead even if you are uncertain about the future.
Are there any bankruptcy or closure rumors about your airline or travel company?
With the recent and abrupt closure of Thomas-Cooke in the UK, you can’t help but wonder what you would do if you were stranded in a foreign company because your tour company went kaput I would want to be able to book alternate arrangements without additional costs. That can save your trip with limited interruption.
What is the total prepaid cost of your trip and are you okay with losing that money?
There are times when short or budget trips are worth the risk. Very often for a short cruise that I book last minute I don’t bother with the insurance. It is definitely more difficult nowadays to get hotels, airlines, etc. to grant exceptions and give refunds. I am not willing to gamble with any sizable prepayments.
Travel Insurance Basics
Types of Travel Insurance: There are five main types of travel insurance: trip cancellation and interruption, medical, evacuation, baggage, and flight insurance. Riders can be added for things such as terrorism or trip delay. Comprehensive insurance usually covers all of the above plus expenses incurred.
Pricing: Insurance prices vary, but on average are 5-10% of the total trip cost. Just like with all insurance, age is one of the biggest with rates increasing over the age of 50.
Trip-Cancellation or Interruption Insurance: This coverage is probably the type travelers value the most. The general trip-cancellation or interruption policy covers the nonrefundable losses you incur when you cancel a prepaid tour or flight for an acceptable reason, such as death in the family, losing your job, airline goes bankrupt or you miss a flight. I have used this insurance when the airline pilots went on strike in Spain on my way home from a long trip. Usually, the insurance has to be purchased a certain amount of time prior to the trip. Also, standard policies must fall under the parameters of reasons to cancel. “Cancel for any reason” policies are more expensive, but you can cancel for any reason.
Theft: These days we travel with so many devices, protecting against theft is a consideration. You can also check your homeowner’s insurance as it may have a provision for theft while traveling. Be sure to take pictures of all expensive items before leaving and if you have anything stolen report the theft to local authorities and obtain a police report to provide to insurance. This is when hotel concierge can be a big help.
Evacuation Insurance: This covers you in case you are injured or become ill in a remote location. The cost of helicopters can be incredibly high. This coverage will assist you in getting to a major hospital and sometimes even covers the cost of travel back home.
Baggage Insurance: Luckily I have only had to utilize baggage insurance twice Both times my luggage was eventually found and returned. The best part of having this coverage is the assistance the insurance company provided in locating and returning my bags. If your bag is not found, there is reimbursement provided.
Types of Coverage: Insurance policies differ greatly. Please check every provision and all the small print before purchasing. If at all cost-effective, I recommend a comprehensive policy for international travel for the peace of mind!