You’ve already spent money on your flight, rental car, and accommodations, so the added expense of travel insurance isn’t too appealing. But is it worth it, and if so, when?
Buying travel insurance can be a hassle and most people don’t bother with it. The options are endless and the prices are not always the most appealing. So, is it worth buying? As with most things, the answer is: “it depends.” So, let’s take a look at what travel insurance is and when it might be worth your time and money.
What is Travel Insurance?
Travel insurance is a temporary policy that protects you financially during a trip. It covers a range of unexpected expenses, including medical emergencies, evacuation, trip cancellation, and even lost or stolen goods. There is a wide variety of policies in the market and they all differ on the level of coverage they offer. The more they cover, the more expensive they get.
There are two main types of insurance:
- Basic trip cancellation protection: This covers you in case you have to cancel your trip last-minute due to indisputable reasons, such as illness or an accident.
- Comprehensive packages: These can include emergency medical care and evacuation, lost or stolen valuables, and even accidental death.
To decide on a policy that suits you best, consider who and what you are insuring.
Family or group insurance can be cheaper than buying it individually, but age can influence the cost significantly. In fact, the premium depends on the oldest member of the group and if they are 65 years of age or older, the fees can hike up to uncomfortable numbers. In that case, it might be worth buying an individual policy for the oldest traveler to save the rest of the group the extra costs.
Other factors to consider are your destination, your mode of transportation, the duration of the trip, the activities you’re planning, and the value of whatever you’ll be taking with you.
In a way, travel insurance policies are customizable. You could get upgrades to cover all of your belongings. You could minimize your risks by covering your rock climbing trip with extra medical coverage. You could even lower your premium if you’d be comfortable paying a bigger deductible in the event of a problem.
Nevertheless, some policies have exclusions which they will not cover. These usually include high-risk countries, pre-existing medical conditions, natural disasters, and acts of God, war, or terrorism.
When Is Travel Insurance Worth Buying?
Although for some of us the issue of buying travel insurance is a no-brainer, it shouldn’t always be the case. When planning your trip, it’s wise to assess the possible risks involved in your plans and assert your financial limitations before making a decision.
A good rule of thumb is to purchase a policy if you’re traveling abroad and skip it if you’re going on a quick domestic getaway. A comprehensive package would be the best choice in the former situation.
Here are our recommendations:
You Probably Don’t Need Travel Insurance If…
- You’re traveling domestically or bought a last-minute deal: The costs involved in these types of trips are usually on the lower end of the spectrum. This means that if your plans were to change unexpectedly it wouldn’t be much of a financial burden, and buying insurance would be almost senseless given the standard fees.
- Your only concern is the flight: If your flight gets canceled or is subject to a significant delay, your passenger rights on most airlines entitle you to a seat on the next available flight at no extra costs or compensation if the waiting time is more than a minimum amount of hours. However, if the airline isn’t willing to comply (and some budget airlines do not), there are services available to customers looking to file a complaint and get a payout (like AirHelp), or services (like Freebird) that can help you re-book your canceled or delayed domestic flight starting at $19 per leg with any airline.
- You can handle losing your pre-paid travel expenses: Accommodation and tours are usually non-refundable, which means you have to pay for everything upfront. If your bank account wouldn’t suffer from having those expenses go to waste, then you probably don’t need insurance. Cancellation coverage is generally the largest portion of an insurance plan, so if that isn’t someting you’re worried about, simply get a standard medical plan.
You Should Consider Travel Insurance If…
- You’re traveling internationally: Unless specifically stated on your health insurance, you are not covered when you travel abroad. If you’re uncertain as to the quality of the medical care in the country to which you’re traveling, or you have a pre-existing condition that could cause problems during your travels, you should purchase a policy and the necessary add-on to fully protect you from unwanted expenses. A comprehensive insurance package might be the best option.
- You’re going on a cruise: Usually, cruise lines offer their own insurance packages that include coverage for any situation you might encounter during the trip, including specific weather changes that could compromise your vacation.
- You’re traveling with expensive gear: If you’re carrying a series of electronics that would cost you almost as much as the trip itself to replace, it’s wise to purchase a policy with an option to increase the amount of coverage per item to suit your needs.
Tips for Buying Travel Insurance
So, you now know when you might need (or not need) travel insurance, but there’s no way we’re leaving you without a few tips on how to buy it.
- Skip the travel insurance offered by your airline of choice. They only cover your flight and baggage and it usually costs more than buying it through a travel insurance provider.
- Check with your credit card provider. Some banks incorporate trip interruption and/or baggage loss insurance in your contract, saving you money on the hassle of finding an additional policy.
- If you travel often, you might want to consider investing in annual travel insurance. However, it’s best you limit yourself to purchasing a policy worth 12 months at the most, as it will allow you to test it first and change it for the next year if you’re not happy with the service.
- Purchase your insurance online and directly through the provider. Travel agencies and airlines always hike up the prices for offering you that option.
Have any experience with travel insurance (or a time you wish you’d had it)? Let us know in the comments!