• George

Travel Insurance-Should You Buy It?

Updated: Jun 16, 2018

Cheri, my wife, suggests that we purchase travel insurance for all of our travels. I have to say I have been skeptical. Last year over labor day we flew to St. Croix to enjoy a scuba

Cheri and a few of our diving buddies

diving trip with friends. We were having a great time and the diving was awesome. We had three days left in our vacation and we were notified that hurricane Irma may hit St. Croix. Cheri and I discussed our options and I thought it might be fun to ride it out and we met a friendly chap that offered to share his hurricane shelter (fully stocked with food and beer) with us. That didn't fly with Cheri. So I began making preparations to leave early. Have you ever tried to find a last minute flight off a small Caribbean Island? Not so easy to do and it seemed like many of the airlines had higher than normal pricing on tickets-hmmm! We did get a flight out in time but we paid a lofty price. Thankfully I took my wife's advice and had purchased travel insurance. We purchased it more because Cheri has elderly parents and we are always concerned they may need us at any time so we buy insurance. This time we purchased the insurance through the Airline web page when we booked our original tickets. We used Allianz and like I said I was skeptical. When we got home, I filed our claim for the extra cost of the flight and for other costs incurred and I was pleasantly surprised that they paid the maximum amount that we could have received. It didn't cover all of our loses but it was significant. It turned out to be a good decision. Or was it.....


When you are considering buying travel insurance, you should know that there are two main types of insurance including international and domestic policies. Insurance is designed to cover larger financial risks that you don't want to bear alone. Typically it isn't necessary to cover less expensive trips-especially domestic trips so don't purchase travel insurance that covers small, manageable losses or only have a slice of risk. For nervous travelers, it does provide a sense of security when you prepay pricey reservations or plan a big international trip. For the cost, a comprehensive plan is a good idea to protect you while traveling abroad. Medical providers outside the U.S. often ask for upfront payments for medical services that can cost thousands of dollars, and travel insurance can guarantee those payments. The right policy would cover medical evacuations and those can cost tens or hundreds of thousands of dollars. Another important consideration is if you 65 or older you should consider a policy that covers out-of-pocket medical coverage since Medicare doesn't typically cover events outside of the country.


It is important to find a provider and a policy that offer the type of insurance you need, based on key variables like trip price, destination, itinerary and pre-existing medical conditions. There are three main areas of travel insurance: medical costs and medical evacuation, loss or theft of belongings and lastly, cancellation and delay expenses. And these categories can be divided into more sub-categories. The Insurance Information Institute says a typical international travel insurance package will include trip cancellation, travel delay, lost or delayed baggage, medical, dental, emergency evacuation, 24 hour travel assistance, accidental death, and some policies include rental car collision and damage coverage. Always understand your policy and read the fine print. For example some high risk adventures like bungee jumping or skydiving may not be covered. You might want to look into taking out extra coverage for "adventure sports." The cost of travel insurance generally ranges from 4-8% of the price of the trip.


Before you purchase insurance be aware of the coverage you may already have for travel. Check with your health insurance provider as they may cover you in different areas of the world. Blue Cross Blue Shield, for example, may cover some of the out-of-network medical services overseas, but read the fine print as emergency medical evacuations may not be covered and cost hundreds of thousands of dollars.


Check with your credit card company to see what they offer for travel insurance. American Express is well-known for its perks and some premium cards offer coverage some medical, lost luggage, flight cancellations, and rental car damages. With the Chase Sapphire Preferred card. your trip is cancelled or cut short by sickness, severe weather and other covered situations, you can be reimbursed up to $10,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels. With the same Chase card, when you pay for your air, bus, train or cruise transportation with your card, you are eligible to receive accidental death or dismemberment coverage of up to $500,000. For more Chase Sapphire information click here. Cheri and I have the Chase Sapphire Reserve card which has great travel insurance, but I worry that the emergency medical/dental and emergency medical evacuation might be a little light for overseas travel. Here's a good blog from "The Deal Mommy" that talks about this.


Many people fear losing their baggage or having valuable personal property such as jewelry stolen while traveling overseas. Many homeowner insurance policies will cover your property while you're traveling overseas. Call your home insurance provider to see what coverage you have. InternationalInsurance.com is a good site to check out for more information on this.


It is very confusing to decide if you should buy and where you should buy travel insurance. Rates can vary widely. Many websites offer easy-to-surf ways to quickly compare coverage and costs. Two of the big ones to check out are squaremouth.com and InsureMyTrip.com which are online travel sites that aggregate a bunch of different options from third parties and leaves it up to you to choose the right fit for you. You can screen for extremely comprehensive coverage, or simply select the areas you're interested in. For example, if you're roughing it int he wilds of South America, you might not fret about cancellations or your luggage, and only want coverage for emergency medical transportation. Its much cheaper to pick and choose custom coverage this way. Another option is World Nomads, where you can quickly get pricing for a comprehensive package by typing in information about your trip. You don't get to pick and choose your coverage areas or limits but as a basic package, the trip insurance is pretty affordable. Annual policies may be ideal for frequent travelers planning multiple trips throughout a year. It can include Emergency Medical, Medical Evacuation, and Travel Delay coverage, among other benefits, however these policies typically don’t include Trip Cancellation coverage. Cost for an annual plan ranges from $100-$200 per person depending on coverage(get a quote). Another option is to purchase travel insurance from your travel agent, but they may get a commission which adds cost to you and you may be limited to only the options they have instead of custom coverage for your needs.


COMMON TRAVEL INSURANCE NEEDS


Include in your policy if coverage needed:


Include Travel Medical Plan if you want Payment of medical expenses if you get sick or injured on a trip and need emergency care that’s not covered by your regular health insurance plan.

Include Emergency Evacuation and Repatriation to be taken to the nearest adequate hospital or flown home if necessary if you’re injured or get sick on a trip.

Include Trip Cancellation and Trip Interruption for reimbursement of nonrefundable reservations if you get sick and have to cancel or end a trip early.

Include Cancel for any Reason Coverage for reimbursement of nonrefundable reservations no matter why you cancel a trip.

Include Baggage and Personal Belongings for payment for lost, stolen or damaged baggage.

Include 24-hour Assistance for help finding a lawyer abroad.

Include Car Rental Collision Insurance for payment for rental car damage.

A comprehensive travel insurance plan typically will cost about 4% to 8% of the cost of a trip, according to the U.S. Travel Insurance Association. The price will vary depending on:

  • Length and cost of the trip: The longer and more expensive the trip, the higher the policy cost.

  • Destination: High health-care costs in your destination can drive up the price of travel insurance.

  • Medical conditions you want covered: Coverage for conditions you already have will increase the cost of travel insurance.

  • Amount and breadth of coverage: The more risks a policy covers, the more it will cost.

  • Your age: Generally the older you are, the higher the price.


How to get travel insurance

Credit card: Some credit cards offer trip cancellation and rental car insurance if you use the card to book the trip or the car. (Most credit cards offer secondary car rental insurance, which means it pays for car damage not covered by your regular car insurance plan.)

Pros: The coverage is free.

Cons: You can’t customize the insurance to meet your needs.

Most credit cards offer secondary car rental insurance, which means it pays for the costs not covered by your regular car insurance plan.


Travel agent and travel reservation sites: You can buy travel insurance when you book your flight, hotel and car rental.

Pros: Buying is as quick and easy as clicking “yes” when you book reservations.

The coverage is inexpensive.

Cons: You can’t customize the coverage.


Travel insurance company: You can buy directly from many companies on their websites.

Pros: You can choose a policy that fits your needs.

Many travel insurer websites also offer information to help you understand the coverage.

Cons: You’ll need to go to multiple websites to compare coverage and prices.


Travel insurance comparison sites

Pros: You can choose a policy that fits your needs and compare policies and prices in one place.

Cons: Comparing multiple policies takes time.


Where to get travel insurance quotes online

Comparing policies from different travel insurers is your best bet for getting insurance customized to your needs and at the best price. Here are websites where you can get travel insurance quotes.

Quick navigation:

Travel insurance comparison sites

Comprehensive travel insurance plan providers

Medical travel insurance


In conclusion, you should decide if you actually need travel insurance and secondly if you do, choose a policy that fits your needs for the variables in your travel. Check with your credit card, health insurance, and home insurance providers to confirm what coverage you may already have. Book your insurance with a travel agent, a travel reservation site, a travel insurance company, or a travel insurance comparison site. Happy and Safe travels! George





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