When you are planning a vacation, you might wonder if having travel insurance would be a good idea. Travel insurance can help minimize the financial risks of traveling caused by illness, accidents, missed flights, canceled tours, theft, and other events. How much you stand to lose due to unforeseen incidents varies depending on how much you have prepaid, the type of airfare you purchased, your destination, how reputable the businesses you booked with are, the overall health of those who will be traveling, and also what coverage you may already have from your credit card and insurance companies.
What does Travel Insurance Cover?
There are many companies that sell travel insurance, each with their own plans and policies that offer differing amounts of coverage for various events. The most common types of travel insurance are for trip cancellation, interruption, or delay, medical emergencies and evacuation, lost or delayed baggage, and flight insurance. Typically, a travel insurance policy will include a combination of some or all of these with the option to add on the rest and specific additional coverage, such as for car rentals or certain adventure sports. The level of coverage for each benefit will depend on the plan you selected and can also be dependent on if you purchased your travel independently or through a travel agent.
How Much Does It Cost?
Travel insurance policies are priced according to many factors, such as age, length of trip, where you plan to visit, and what state you live in. A basic policy may only cost 5% of the total price of your trip, whereas a comprehensive policy or one with a lot of add-ons may be closer to 12%. Age is one of the biggest factors in determining price, with those over 50 paying higher prices for coverage, while coverage is inexpensive and sometimes free for children traveling with an insured adult. The length of your trip factors into the price because a longer trip is generally more expensive than a short one. Where you travel can impact the price of travel insurance, as traveling to a country with good hospitals and a stable infrastructure is less risky than traveling to a remote location or one with political turmoil. The state you live in also determines how much travel insurance will cost, as insurance brokers must be licensed in the state the policy is sold in. There are also plans that rather than providing coverage for just one trip, will provide coverage for a specified length of time, such as a year. These come at a premium price but are more affordable for frequent travelers than purchasing multiple separate policies in a year.
Is it Worth It?
Here are some of the key factors to consider when deciding if travel insurance is a good idea for your trip:
- Are you paying a lot of money up-front for tours or accommodations? What are their refund policies?
- Is your airfare refundable? How reliable is the airline? Do you have tight connection times?
- Will you have luggage to check at the airport?
- Are there items such as eyeglasses or medications that would need to be replaced immediately if delayed, lost, or stolen?
- How healthy are you and those you are traveling with? Are there loved ones at home in poor health?
- Does your existing medical insurance coverage provide benefits while traveling? Does it cover emergency evacuations, so you can be treated at home for serious illnesses or accidents?
- What travel benefits come with your credit card? Some offer no travel benefits, while others offer benefits comparable to the best travel insurance plans. To qualify for the benefit, many times the particular card with the benefits must have been used to pay for the travel expenses.
- Are you traveling with lots of expensive items? Cameras, smartphones, and computers can be pricey to replace if lost or stolen. Are these items already covered by your homeowners’ or renters’ insurance?
For some, travel insurance is worth paying for, while for others it may seem like a waste of money. A healthy, young person traveling with just a carry-on bag to a safe country, doing minimally dangerous activities is unlikely to need the coverage. However, it might be a good idea to purchase travel insurance if you are paying for airfare, tours, and accommodations for several people, or if any of those who will be going have health issues that might disrupt your travel plans.