Travel Insurance – Yay or Nay?
By Heather Meliski
One question I am often asked by clients is whether or not they should purchase travel insurance. Because there are many factors to consider, the question is more complicated than it would appear at first blush.
First, let’s talk about travel insurance basics and what it covers. Travel insurance ranges from basic trip cancellation and interruption coverage insuring only the price of your vacation for events such as illness, loss of job or death, to options including medical coverage and/or medical evacuation, all the way to full cancellation for any reason with additional coverage for baggage and flights. Costs typically range from 5-12% of your vacation price depending on a number of factors including age and type of coverage. Make sure to shop around before you purchase a policy and read the fine print so you understand the full scope of coverage and exclusions. Also, always check the credit card you’re using to pay for your vacation to see if they offer travel protection for vacations purchased with their card. You don’t want to pay twice for coverage if it’s already included with your credit card company.
Some factors to consider when deciding whether to purchase travel insurance include:
Is this the vacation of a lifetime or is it more of an ‘annual’ vacation?
If your vacation is a once-in-a-lifetime trip (honeymoon, babymoon, anniversary, multi-generational family vacation, or that big vacation you’ve been dreaming about and saving money for years to take), then travel insurance is a definite ‘yes’. These types of vacations are typically more expensive where losses are harder to recoup.
Where are you traveling?
Are you traveling outside of the United States? Is the area you’re traveling to prone to extreme weather (hurricanes, earthquakes and the like)? Is there potential for any type of civil unrest? In all of these scenarios it’s best to opt for travel insurance. If you’re traveling domestically then it’s a solid ‘maybe.’ When you’re thinking about the cost or the potential for flight cancellations or delays, there’s a big difference between traveling from Georgia to 30A versus Hawaii.
What time of year are you traveling?
Is your vacation to the Caribbean during the middle of hurricane season? Are you flying to Colorado for a ski trip in the middle of winter? If there is a good chance that weather may impact your vacation then you should strongly consider travel insurance.
Do you have any health conditions or considerations?
If you have pre-existing medical conditions (diabetes, heart disease, or you are currently pregnant) that may cause an issue during your vacation then you should consider a policy with medical coverage and/or medical evacuation coverage. Not all domestic medical insurance covers you if you are outside the United States. Make sure you check with your insurer to see what your coverage is and if you are not insured for non-domestic services, then consider purchasing travel insurance that offers international medical coverage.
Will you be traveling with children?
Do you have kids? Then you know how often one of them comes down with an ear infection or viral illness or tummy bug. If your child falls ill right before you’re set to go on a cruise or big family vacation, travel insurance would help you recover the costs of changing your vacation plans including flights, cruise fare, resorts, etc.
Are you going on a cruise?
Generally speaking, most cruise lines have strict cancellation policies after final payment. How close you are to your sail date will determine how much of your cruise fare you will forfeit for changing or cancelling your cruise. You will for certain lose money if you cancel within a certain window. On Disney Cruise Line, for example, if you have to change or cancel your cruise within 30 days of your sail date, you will lose 50% of your cruise fare for most sailings and staterooms. That number changes to 75% within 15 days and at 14 days or less you will lose the entire amount of your sailing. In this instance travel insurance would help cover any changes or cancellations.
Also, most cruise lines have the equivalent of an emergency room on board the ship but if for any reason you would need to be removed from the ship for something more serious it is incredibly expensive and is not covered by most insurance policies. A lot of travel insurance policies have a provision for medical evacuations – being flown by helicopter or removed by boat for medical treatment – and will cover you up to a certain amount.
What are the cancellation policies for your destination?
Does the resort allow you to cancel up to 24/48 hours before arrival? Are you renting a house or going to a resort with a strict cancellation policy? Are you going on a package vacation with strict cancellation? Do you have non-refundable flights? If the cancellation policies for your destination are more flexible then travel insurance may not be a must-have. If they are stricter then you should consider travel insurance.
What is your comfort level traveling without travel insurance?
Will you feel better about your vacation – and the money you have spent on it – if you have vacation protection? If the answer is ‘yes’, then purchase the trip insurance because it never hurts to have it. Above all else, you want to enjoy your vacation and if having the extra layer of protection helps your enjoyment, then go for it!