Travel Insurance

Travel Insurance – Is It Worth It?

 

It seems as though there are as many travelers who are proponents of purchasing travel insurance, also called travel protection, as there are those who think it is a huge scheme by the travel industry to make more money.

I, for one, am a proponent of purchasing travel insurance, although there was a time when I wasn’t convinced it was worth it.   Of course during that time nothing ever ended up happening so I thought it would be a waste of money to buy the insurance.  However, a couple situations led to my change of heart and now I would not travel without it.

First, on a short cruise with friends one of our friends became seriously ill on the first night and had to be hospitalized once we reached port.  She and her family had to leave the ship and she was admitted to the local hospital.  They had not purchased travel insurance because they felt the trip was relatively inexpensive and didn’t feel the insurance was worth the added expense.  Of course they were only considering the cost of cancelling the trip for some reason.  A medical emergency never crossed their minds.  Not only did they not get to enjoy the cruise, but their cruise cost was not refunded.  They also incurred hotel costs, food, flights home and medical bills that their primary medical insurance company would not cover.  Bottom line, had they purchased the travel insurance, these costs would have been reimbursed.

Another situation involved a family of four that did purchase travel insurance for the paid in full portion of their trip.  The family became ill for part of their trip and could not participate in the activities they had booked ahead of time.  Unfortunately, the activities were nonrefundable at this point in their vacation.  The days the family were ill were considered “trip interruption” and they were reimbursed for that portion of the trip.  However, they had failed to add the booked activities to their travel insurance policy, so those costs were not, totaling over $2000.00.  A costly oversight!

I think overall there are more positive stories about how travel insurance has benefitted someone who purchased it than there are negative.  Even so, there are a number of things you should consider when purchasing a travel insurance policy.

1.  Understand the policy coverage.

Read the fine print!  Don’t just settle for “knowing” you have travel protection – know what the policy covers.  Will it cover H1N1 now that it is a pandemic?  Can you cancel if there is a hurricane warning?  How about cancelling due to an immediate family member becoming ill?  It is important to know what you are paying for.  There are policies offered by each Cruise Line, Airline, Travel and Tour Company as well as comprehensive plans that are offered independently.   Make sure you know the differences and be sure to ask your travel agent for a copy of the policy you are buying. 

    2.  Buy what you need.

There are various levels of travel insurance available, but do you necessarily need the highest level of insurance?  This goes along with understanding your policy.  For instance, if you have personal medical coverage should you pay a premium to have the travel insurance act as your primary insurance?  It is probably not worth the extra cost unless you are traveling overseas and your personal policy does not cover medical expenses out of the country.  On the other hand, if you plan to participate in any extreme activities while on vacation, it may be worth an additional cost to make sure any injuries resulting from the activities are covered under the policy.   Most travel insurance plans charge a higher premium to have the benefit of cancelling for any reason.  This may be important to you if you are planning a trip well in advance, but not necessarily so if you are leaving next month, OR if you have a job that may require you to cancel a trip if you are needed.

    3.  Know when you need to purchase the insurance.

Not all travel insurance policies need to be purchased at the same time your trip is booked.  However, there may be certain coverage that is only in effect if the policy is purchased by a certain date.  Coverage for pre-existing conditions would be one example.  Most policies will only cover pre-existing conditions if the insurance is purchased within a short window of the trip being booked.  Another consideration would be if you pay for an entire trip at the time of booking.  When you pay for an entire vacation up front it is best to purchase the insurance right away.  It is the same cost whether you buy it when you book your trip or two weeks prior to travel, so why wait?  It would be awful to not purchase it right away and then have something happen preventing you from taking the trip and not have the insurance in place.  In these two cases you would want to purchase the insurance right away.   In these economic times, the insurance could also “save” you if the tour/vacation company your vacation was through goes out of business before your trip takes place.  Your travel agent can advise you about when the insurance would need to be purchased.

As previously mentioned, there are a variety of Travel Insurance products available.  The cost for a comprehensive policy typically ranges from 5% and 12% of the cost of your trip (depending on your age).  Insurance through a Cruise or Travel company varies as well and is not necessarily less expensive than purchasing an outside comprehensive plan.  Ask your Travel Agent what your options are and their costs before making your decision.