Do I need travel insurance? The answer is: “It depends.”
The concept of travel insurance is similar to that of any other insurance. It is protection against an event that would result in loss of something of value. We purchase insurance for our homes and cars because the expense of the coverage is miniscule compared to the cost of replacement. But not all insurance needs are the same, so the next question that must be evaluated is: “what type of insurance do I need?”
First, you need to answer some questions for yourself such as:
- If you need to cancel the trip, can you afford to live with paying for the trip out of your pocket?
- Is there a higher likelihood of a medical issue in your traveling party, including a pre-existing health condition that might need to be addressed?
- How much is the cost of the coverage?
- Do your other insurance policies or coverages (such as for credit cards) apply?
- Does travel outside the United States apply to your existing coverage through health providers?
If you can answer those questions to the satisfaction of yourself and traveling party, then perhaps you might not need insurance. But don’t leave the decision to a hunch, a guess or an “I think.” Your second step should be to talk with a professional travel advisor who can review those questions and others to determine whether it truly is a good idea to eschew coverage. Consider these issues when it comes to travel protection:
- Yes, some credit card companies offer travel protection, but in many cases these are limited and covers only aspects paid by the card.
- Airlines are not obligated to cover costs of food, hotel or rebooking when a flight is delayed or cancelled.
- Expenses related to medical issues are often not covered by one’s own personal coverage — including transportation. Travel insurance can be designed to do this.
- Prepaid expenses are usually not refundable after a certain point in time, if at all. However, travel protection can facilitate the repayment if cancellation is necessary.
- Travel protection can cover more than just medical expenses and cancellation, it can also address interruptions, medical evacuation, lost or delayed baggage expenses.
Once you have discussed with your agent and reached the conclusion that you need to purchase insurance, the next consideration is the type of policy you need. Some offer more comprehensive coverages than others. Some are more speciality-focused such as medical-only, evacuation only, rental car, etc. Again, rely on the expertise of your advisor to guide you in making the correct decision for you.
The cost of travel protection is based on several factors, including the age of the traveler(s), but in general it is a small percentage of the total. It is not unusual for a $3,000 trip costing the traveler $150 for protection. Again, a discussion with a travel advisor is the prudent way to go so that you have all of the information available to make an informed decision.
We hear all too often of the horror stories from individuals of not being insured when an issue arises. The “it can’t happen to me” syndrome can jump up and bite us at anytime. The vast majority of the time, the small price to pay for insurance is worth it, even if it is only to give us peace of mind.