Is Travel Insurance a Waste of Money?
Have you ever been confused about travel insurance, especially the pricing?
Well, we hope to de-mystify the subject and provide you with some practical information to help you assess your travel risk.
Pricing Different travel insurance companies handle things differently, but typically policy pricing is based on some or all of the following factors:
Age
Cost of trip
Length of trip
Destination
State of residence
Now, there are some options that allow you to get around the age factor, but most of the time, a person who is older than 70 will pay more than someone who is younger. Why? Because, statistically, our health risks increase as we age.
Age aside, don’t be surprised if your travel insurance expense comes to about 5-7% of the cost of your vacation. So, for example, it could cost $300-$420 to insure a $6,000 trip.
To help you assess if the risk is worth the expense, it’s helpful to know which scenarios are most common.
Loss of Deposits or Pre-payments When you book a cruise, tour, or vacation rental, large payments are often due months before you travel. If you have to cancel, you may lose the bulk of those payments in cancellation penalties. Trip cancellation insurance reimburses you for non-recoverable deposits and penalties if you have to cancel before your trip. Note that each type of policy has specified reasons that are covered, so be sure to read the fine print.
Expenses Related to Ending Your Trip Early If you have to abort a trip because something happens to you, your traveling companion, or a family member at home, getting home quickly may be expensive. Trip interruption coverage reimburses the non-recoverable extra cost of returning home early or of continuing as a single traveler if your companion has to return early.
Baggage Loss or Delay If your baggage is lost, stolen or damaged while on your trip, you can be reimbursed for the purchase of necessary personal effects, subject to the maximum monetary limit on the policy. You’ll most likely have to pay for essential items, like clothes and toiletries, out of pocket, and then submit a claim to the insurance company when you get home. Keep in mind: You’ll need to submit receipts to get reimbursed, so be sure to keep them.
Unexpected Medical Expenses If you get sick or suffer an accident when you’re away from home, you may face costly medical bills. This risk is greatest when you travel internationally. Your own medical plan may cover you anywhere in the world, but some don’t. For example, Medicare doesn’t provide coverage outside the U.S. (although some Medicare supplements do). Be sure to review your personal coverage to see where there are gaps. No matter what you discover, travel insurance can provide an additional layer of protection.
Emergency Transport Home On your trip, if you’re so sick or injured that you can’t fly home, you may need to be transported to a hospital in a helicopter, or a nurse may have to travel home with you on a commercial jet. Can you imagine the expense? Also if you’re traveling somewhere remote, you will need help arranging transport. This is where emergency medical evacuation coverage comes in. Be sure to check the details and make sure the coverage is robust enough for your particular trip.
One Often Overlooked Benefit Besides cost, one of the main benefits of having travel protection (from a reputable company) is that you will have a team of people you can contact while you’re traveling who can help you resolve any issues that arise.
If you’re looking to maximize your fun and minimize your risk, travel protection can be the perfect solution.
As travel advisors, we have access to multiple companies that provide quality travel protection. If you’d like to compare pricing on policies for your next adventure, we can help. We also have insider tips we can share, so please don’t hesitate to reach out if you have any questions.