The In’s and Out’s of Travel Insurance

August 14, 2018

It doesn’t take an expert opinion to know that planning a vacation is a lot of work. You must pick the destination, figure out how to get there and where to stay, schedule the itinerary, and even if you do not have kids there is always at least one person in the friend group taking the lead. All of these working components only increase the likelihood of something going south. Don’t pour all your sweat into planning this vacation only to have it sabotaged; consider buying travel insurance.

What is travel insurance? What does travel insurance cover? Is travel insurance even worth it? To help answer these questions, we compiled a list of things to consider when buying travel insurance.

What’s the price tag?

Travel insurance comes in packages. Price will depend on which package you buy and for how long. There are single trip packages or packages that cover multiple trips for a duration of time. Generally speaking, travel insurance can cost up to 5 to 7 percent of the total travel cost. This means you will have to budget $700 to travel insurance for a $10,000 trip if you choose to purchase insurance.

How do I keep the price down?

  • Check insurance policies before investing in travel insurance. Health insurance generally covers you anywhere in the United States and some coverages even cover medical expenses abroad. Read the fine print of your policy or talk to your agent directly to confirm what is all covered in your policy.
  • Certain credit cards will cover any travel costs that you purchased on the card. A canceled or delayed trip can be reimbursed along with the hotel stays missed due to the cancellation. More credit cards do not provide this than most, so double check with the company to avoid overlapping coverage.
  • Read the fine print of travel insurance policies. Consider which policies are necessary based on your vacation. For instance, “cancel for any reason” coverage can be extremely costly and likely isn’t necessary for your trip.
  • Check the insurance you have on devices and tech. If you’re carrying a lot of technology on the trip, there is a good chance you have it insured with loss or damage protection.

What does it cover?

There are many different types of coverages based on the policy and company, so we’ll focus on the three most widely popular travel insurance claims.

  • Trip Cancellation and interruption: If your flights are delayed or canceled due to reasons out of your control, travel insurance will reimburse you for the lost time and money. In addition, if you’re traveling to a location with adverse weather—such as Florida—a hurricane can cancel not only your flight but the entire vacation as well…which will likely be very costly.
  • Baggage: According to 2012 U.S. Department of Transportation statistics, there are 3.09 reports of mishandled packages per every 1,000 passengers. While this sounds relatively low, roughly 1.73 million passengers fly each day. Consider purchasing insurance if your baggage is not covered.
  • Emergency: If you’re not covered in the region you’re vacationing in, always purchase travel insurance for emergency situations. Even if you’re healthy, medical costs can be steep.

When should I buy it?

It really boils down to the type of trip you’re taking. This will depend on your age, location, activities, duration and total cost. If you have spent a long time saving up for this trip or it is expensive relative to your budget, buy travel insurance; but, a simple weekend vacation across state lines probably does not require travel insurance.

The location you’re traveling to or activities planned will also play a large role. But take note, insurance covers accidents, not what you have planned. Attending the Running of the Bulls will not be covered, but accidents along the way would be.

If anything, purchasing travel insurance will give you peace of mind knowing that if something goes wrong, you will be covered.