When you’re preparing for a trip, the last thing you want to think about is some sort of medical emergency or other event ruining your plans. But sometimes, bad things happen and you just have to deal with it the best way you can.
In some cases, travel insurance may be able to help you minimize the risks and losses from these events, but there is a lot of debate over whether travel insurance is actually worth the cost.
The first thing to do is educate yourself on the types of travel insurance that are available. There are plans out there that will cover everything, but I’m going to lump them into two categories: financial protection and medical protection.
It happens. Sometimes your financial situation changes and you can no long afford that trip you planned, or a family emergency or sickness means you have to delay your long-awaited trip. Or the hurricane season takes a turn for the fierce and your flight or cruise can’t take off.
In those cases, you can lose a lot of money, but there are travel insurance policies that will protect you against this loss:
- Trip cancellation
- Trip interruption
- Protection against the bankruptcy or default of your cruise line or tour operator
- Loss of luggage or personal possessions.
These types of coverage are intended to protect you if you unexpectedly need to cancel your plans, if your trip gets interrupted or delayed by a natural disaster, or that cruise line is suddenly not doing so great.
The money you invest in this insurance may help you reclaim the money you lose on deposits or your lost luggage.
The more “worthwhile” insurance coverage for most people is probably medical coverage. These policies will cover:
- Accidental death or dismemberment
- Medical and dental care
- Transportation to medical facilities
If you are going to be doing an “adventure” type of trip involving a lot of hiking or other physically intense activities, it might be worth the investment to get some medical coverage abroad.
Or if you are traveling solo or expect to be in remote areas, it might be wise to get insurance that you’re sure will put you at ease should you need medical assistance. For example, maybe you want a policy that will take you to the nearest “Western” hospital or that will fly you back to the States for your medical treatment.
But be sure to really assess whether this coverage is worth it, and double-check that you’re not duplicating coverage that you already have elsewhere.
Other sources to check
Your first step should be to check your existing insurance policies – medical, dental, homeowner’s, renter’s, etc. Read the fine print and see if you may already be covered in other countries for some of these “risks.”
With lost luggage, airlines are already required to reimburse you for your belongings if they are lost. So maybe skip that option.
If you are traveling with a lot of valuables, you may actually exceed their cap on lost luggage reimbursement, but there’s another place to check – your homeowner’s or renter’s insurance policy. See if that policy applies to loss of personal effects away from your home. If not, consider getting a floater on your current coverage to insure the jewelry, electronics or equipment you’re carrying with you on your trip.
Some credit card or auto club companies may even insure you on trips that are booked through them. American Express is known for its insurance for its customers, so check out your card’s policy.
Weigh the costs and benefits
This type of insurance typically costs anywhere from 4-8% of the cost of your trip.
I would suggest determining how much it is going to cost you, and then how much it could possibly “save” you if you end up needing the coverage. If the cost of the insurance is going to exceed the cost of the refund you would get on deposits, it may not be worth it.
Check out InsureMyTrip.com for quotes and information about travel insurance plans that are available to you.
According to Consumer Reports, since Sept. 11, Americans are spending $1 billion annually on travel insurance, with 30% of travelers buying it. Before 9/11, only 10% of travelers were investing in travel insurance.
Many experts will tell you that because you very rarely need to use travel insurance, it’s not really worth the cost. But this has to be a personal decision.
Is your health questionable? Then maybe international medical insurance is a good idea for you.
When I went abroad for a semester, my home university required that we purchase international travel insurance, regardless of whether our insurance policies already covered us abroad. I think this was more to cover their butts than anyone else’s, but they insisted. I never needed it during my five months, nor did anyone else on the trip.
I don’t think I gave it a second thought after purchasing it. I never felt “safer” knowing that if there were some freak bus or train accident, I would be covered. Or that if I required hospitalization, I would get the best treatment. Those weren’t the things I was worried about.
Your personal preferences and sense of security have to take priority here, and no one will judge you either way. Do your research beforehand and make the decision that makes the most sense for you.
Although I will say this, all the experts agree that if you do buy travel insurance, you should buy it from a third party insurance agent. Do not buy it through your cruise line, tour operator or travel agent. These outlets charge much more for the exact same coverage, so use a trusted insurance agent or company that you have used in the past.
Have you purchased travel insurance for any of your trips? What kind? Did you end up needing it or was it just a waste of money in the end?