Is Travel Insurance Worth It?

Every time you buy a plane ticket, cruise ticket, or other travel passes, you are asked the same thing: Do you want to add travel insurance for just a few extra dollars? At this point, you are probably excited about buying tickets and making plans without thinking about how much you can pay for insurance – for what exactly?

Travel insurance sounds like one of those types of insurance that you don’t need , in the same way that extended warranties are usually not worth it. But in some cases, buying travel insurance is a smart move. Let’s see what options you have and when travel insurance makes sense or not.

What does travel insurance cover and how much does it cost

You can get travel insurance from several sources: direct from the airline or cruise carrier, from an independent travel insurance agency, and sometimes by credit card. According to travel insurance comparison site SquareMouth, travel insurance usually costs between five and 10% of the value of your trip .

Insurance coverage depends on your carrier as well as the individual policy you purchase. However, in general, travel insurance is designed to protect against unforeseen travel-related annoyances such as illness that causes you to cancel your trip.

Most travel insurance covers four main types of insurance:

Travel cancellation and interruption insurance

This will reimburse you for non-refundable travel expenses if your trip is canceled or seriously delayed due to natural disaster, illness, or if your carrier goes out of business . Independent and carrier-provided insurance policies offer protection up to the amount you purchased.

One aspect that can add to the value of your travel insurance policy is “cancellation for any reason” coverage. If you want this coverage, you must purchase the policy within two or three weeks after you pay a deposit for your trip or purchase your tickets. This gives you the right to cancel your booking a few days before the departure date and receive a refund of 50% to 75% of your costs.

It may seem silly to get insurance just for changing your mind. But some reasons you might need to cancel your trip won’t be covered by regular cancellation insurance, such as losing a job that drastically lowers your income, or a family member’s illness.

Luggage and personal belongings insurance

If someone steals something from your bag, or your baggage is lost or delayed , travel insurance will pay you to replace your personal equipment.

Typically, you get insurance coverage of up to $ 500 for a delayed bag and up to several thousand dollars for a lost bag.

Travel Accident Insurance

Just as you would not want to go without health insurance in your day to day life, it is important to have accident insurance when traveling abroad.

Insurance usually includes doctor visits, ambulance rides, hospital stays, and prescription drugs. He can also cover the costs of an evacuation to get you home during a medical emergency. This category usually covers costs up to $ 100,000– $ 200,000.

Accident insurance for death or dismemberment

If someone in your group dies or suffers a life-changing accident (such as loss of sight), this insurance feature pays out up to $ 500,000, depending on the situation.

So, is travel insurance worth it?

As with other insurance policies, buying (or leaving) travel insurance is a gamble. You do not want to never be sorry that did not buy insurance, but you also do not want to pay for something that you do not need. Looking at the list above, you may already have coverage for some of these items elsewhere – you may already have life insurance that covers death or dismemberment, or health insurance that covers overseas emergencies.

Two rules of thumb: Travel insurance is worth it when you travel overseas, and your health insurance does not cover emergencies outside your home country, or when most of your trip is non-refundable.

For everything in between, consider how serious a financial disaster would be if something bad happens on your trip or if you have to skip it. Here’s a three-step process to go through if you’re still unsure:

Decide how much is at stake if something goes wrong on your trip

You probably won’t need travel insurance if you have one of those cheap last minute flights. Travel insurance covers lost bags and delays, but for most people the cost of the policy won’t pay off. However, if you are taking an expensive trip, or there is a greater chance that something will go wrong (for example, you are driving to Chicago during winter or the Caribbean during hurricane season), you probably want to insure. This.

Find out if your credit card offers travel insurance

If your credit card offers travel insurance – most premium cards offer some kind of coverage , with the exception of Discover – read the fine print to see if it can help meet your insurance needs. Any travel plans you wish to be covered must be booked with a credit card that offers travel insurance.

If you opt for travel credit card benefits, bring your insurance coverage details so you don’t have to worry in the event of an emergency. And if you need to file a grievance, do so as soon as possible — cards usually have a grievance window about 30 days after the incident — and keep all receipts for any expenses incurred during the emergency.

Keep in mind that your credit card is less likely to cover traffic accidents and emergency medical care. If this is a concern, you probably want to look into a separate travel insurance policy anyway.

Find out how much travel insurance costs for your trip

Use comparison sites like InsureMyTrip and SquareMouth to compare the independent agency policies available for your trip. While insurance offered by airlines and cruise lines is often comparable (and often provided by the same third-party insurers), it is difficult to read in small print what your insurance coverage will be like when you have tickets at your box office. independent insurers are also usually slightly cheaper.

Finally, remember that you must get insurance before starting your trip; it will not protect you if you get insurance after an accident or trip cancellation. It’s like trying to get home insurance after your house has already burned down.

This post was originally published in 2014 and was updated in February 2020 to provide more up-to-date information.

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