Is It Yes, Or Is It No?
When To Buy Travel Insurance
By Kevin Streufert
How many times have you purchased airline tickets online and hovered over the “Yes” and “No” checkboxes for travel protection, wondering if it’s something you really need? Is it just another way for airlines to make extra money on top of fees for checked bags and extra legroom?
Most travel experts recommend buying travel insurance, especially for cruises. But it doesn’t mean you should automatically click that “Yes” box every time the option shows up.
Let’s consider what travel insurance actually covers – keeping in mind very few policies address every risk category, and the benefit limits will vary substantially from one to the next.
Should you need to cancel your trip for a covered reason such as an illness, injury, death in the family or jury duty, trip cancellation coverage reimburses you for the non-refundable portion of your trip expenses. Sometimes, a higher-cost option is offered, particularly for cruises, which allows you to cancel the trip for any reason whatsoever.
Trip interruption coverage, meanwhile, reimburses you for the unused, non-refundable portion of your trip expenses plus the increased transportation costs of returning you home. The sudden change in plans must be due to a covered reason, similar to those under trip cancellation.
If a covered delay causes you to miss your scheduled flight or cruise, these two benefits reimburse you for expenses to get your trip back on track such as accommodations and alternate transportation. Coverage limits are typically low, but since airlines usually rebook passengers at no cost, the actual expenses shouldn’t be all that high. The only exception might be shuttling you to the next port of call after a flight delay causes you to miss your cruise ship. Hint: Always fly in the day before a cruise.
Baggage, medical, life
Baggage protection covers the loss, damage or delay of your luggage and personal effects while in transit. Benefits usually consist of an allowance for a lost suitcase or the reimbursement for essentials while waiting for a delayed bag to catch up with you. However, most airlines offer baggage-related compensation to their passengers as part of their conditions of carriage, so the insurance coverage may ultimately have little or no value.
Policies with medical benefits reimburse expenses not already covered by a traveler’s health insurance plan. These out-of-pocket costs can pile up when journeying overseas or sailing on a cruise ship, as many health plans cover just 80 percent of charges at those “out-of-network” facilities, often after a healthy deductible. And they may not cover anything at all.
Medical evacuation is a frequently overlooked expense that can run hundreds of thousands of dollars. Think of a critically ill passenger on a transoceanic cruise in the middle of the Atlantic. Airlifting him to the nearest hospital isn’t exactly a trip across town. Many off-the-shelf policies fall short on the limit for these expenses, often capping out at $25,000 or $50,000, so this is where a more customized policy can offer significant value.
Life insurance is a typical benefit with standard airline travel policies, and it caters to the general public’s fear of flying. In reality, the chances of dying in a plane crash are astronomically low. For those concerned about protecting loved ones in the event of their death, a carefully selected whole life or term insurance policy covering all potential circumstances is a far more prudent investment.
To buy, or not to buy
If you accept my analysis, the primary reasons we may choose to purchase travel insurance is for the trip cancellation, trip interruption, medical expense, and medical transportation benefits. These can all be high-dollar hits to our pocketbooks. So there’s plenty of justification to protect ourselves, especially since the cost of travel protection is usually less than the taxes on our trip.
For some, peace of mind or a lack thereof can make or break their enjoyment of a vacation, thereby elevating travel insurance from a mere option based on its intrinsic value to an outright must-have.
Others don’t give a second thought to taking travel risks. Perhaps they’re young, exceptionally fit, and wealthy enough to comfortably lose their travel expenses if it comes to that.
For those of us in between, it’s a matter of making an informed decision. The first order of business is to determine what travel coverage we already have. Three easy places to look are healthcare plans, employer insurance and auto policies. But a frequently overlooked resource is the credit card we used to pay for the trip. If it’s a premium card with a hefty annual fee, chances are that travel protection is included in the smorgasbord of cardholder benefits.
Granted, the limits for some items – like medical evacuation – may not be as high as a comprehensive travel policy, but it’s worthwhile to check out the details and determine whether they satisfy your personal risk tolerance. If not, or it turns out you don’t have any automatic travel protection at all, perhaps it’s time to consider clicking that “Yes” box.
Kevin Streufert is a Park Hill-based writer, travel agent and advisor. He has traveled the world his entire life, with a particular focus on Europe, and can be reached at kevin.streufert@cruiseplanners.com.