Travel Insurance—Do You Really Need It?
Traveling is something a lot of love to do! We normally start planning major trips months or even a year in advance. When you plan that far in advance you are taking a gamble, so we always get trip insurance, but do you really need it?
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Before we talk about if we really need trip insurance, let's take a look at the different types. There are generally two kinds of trip insurance.
- Basic trip cancellation protection, which normally covers lost bags, reimbursements if you miss a connection, and a refund if you can't travel due to sickness or injury.
- Comprehensive travel insurance, which normally covers everything basic does, plus any expenses related to medical or dental emergencies, disaster evacuations and even costs associated with accidental deaths.
Most experts agree, if you're going to get trip (or travel) insurance, you should get the comprehensive type. And we normally will add on a “cancel for any reason” safeguard which is great if you're traveling to places that might have political unrest, or if you have family members that may need unexpected help.
When You Should Skip The Insurance?
Think of your vacation as an investment. If you lose the money, would that be OK or would it set you back more than you can handle? If you're spending a relatively small sum on your trip, insuring that investment probably is not worth it.
For traveling in the conterminous U.S.* you can skip it. If you're traveling to Florida or taking a wine trip through the west coast, you can probably skip any extra insurance. Travel within the U.S. is typically a less expensive investment, and a lot of times you're planning this only a few weeks in advance. ValuePenguin estimates the average domestic trip spans about four days and costs $576 per person. plus, if you have medical insurance, you're typically covered for any emergencies that occur.
Check your credit card for coverage.Some credit cards, such as Chase Sapphire, offers built-in trip interruption insurance up to $10,000 per person if the trip is cancelled or cut short.
Skip it for flights. You may think you need to cover your flight, especially when the flight costs hundreds or thousands of dollars. It's normally not worth it if you know your rights as a passenger. For example, if your flight is canceled, you're generally entitled to have the next available seat on the next available flight going to your destination.
Don't use insurance just for flexibility. Insurance should not be used as a “cancellation policy.” This is especially true when it comes to your hotel. Instead, opt of a hotel reservation with free cancellation right up until your stay.
When Do You Need It?
The general rule is that you'll want to buy emergency medical or evacuation insurance when going out of the U.S. This is especially true when planning trips far in advance.
Opt in for international trips. For the most part, international vacations are more expensive than domestic trips. We tend to stay longer; instead of the four days for domestic trips, we stay about 12 days, and the cost rises to $3,242 per person.
We also tend to book these trips much further in advance. We do this for a good reason; to book an international flight, you want to book almost five months beforehand.
Because of the advanced planning and the cost, you'll want to consider a comprehensive policy that will cover a wide range of situations. If you have to pay a significant deposit, you should consider comprehensive insurance.
Buy it for “just in case” medical reasons. Hiking the Inca Trail to Machu Picchu or wandering the rain forest in Brazil might be considered a once-in-a-lifetime experience, but if something goes wrong in those faraway places, medical help may be difficult to come by. This is when a comprehensive travel insurance policy can come in handy. Keep in mind that most people's medical, except Medicare, will pay “customary and reasonable” hospital costs abroad, especially if you're in a major city like London. But, if you have a serious problem, the bills can add up quickly. And if you need a medical evacuation, the cost can be more than $50,000 depending on your location and medical condition.
Always buy it for a cruise. Cruises hit all the major areas where comprehensive travel insurance is recommended: a big, upfront payment, international travel, and a higher risk of problems. It is OK to go through the cruise company; there isn't much of a difference between the options offered by them when dealing directly when you're booking. This is often referred to as vacation protection packages.
While you should always check the fine print, most of these policies are comprehensive and cover a wide range of situations, including hurricanes. You can find some good deals if you want to cruise during hurricane season. In the Atlantic (Atlantic Ocean, Caribbean Sea, and the Gulf of Mexico) the season is June 1st to November 30th. In the Eastern Pacific, it runs from May 15th to November 30th.
As I said at the beginning of this post, we plan major vacations up to a year (or more) in advance. We always get a “cancel for any reason” policy as our downpayment can be quite a bit and we're at an age that medical reasons can crop up. I think it is well worth the extra cost; the last trip it was $286 per person. But, for are domestic trips, including non-tour trips to Eastern Canada, we skip the insurance. These trips are normally planned a couple of months in advance and are generally cheaper.
If you're traveling by yourself, check out my post on Solo Travel!
Do you have a trip coming up? Share where you're going in the comments! Or if you would like some ideas on different tours or different places to go, ask me and I'll help (or more likely contact my experts in this area!)