Questions Answered: Is Travel Insurance Worth the Cost?

Every time you book a trip, whether with a travel agent or on your own, I'm sure that you've been asked if you would like to purchase travel insurance.  If you're anything like I was, you think about it for a couple of minutes and try to decide if you really want to spend the extra money, when it sounds like it's one of those types of insurance policies that you don't even need (kind of like extended warranties when you purchase something).  However, as I have learned over the time that I have been a travel agent, most of the time, it's a smart move to get it and I have seen it be a great investment for several clients. 

I think that oftentimes, most people aren't exactly sure what the insurance policy actually covers and they assume it will really only cover you if there's a hurricane or another natural disaster.  My hope with this blog post is to inform you a little more on how it actually works and when it's probably ok to skip it.

Travel insurance is meant to protect you against unforeseen travel misfortunes.  Each policy is different, so it's very important to read over the policy thoroughly, however most policies will cover the following...

• Trip Cancellation & Trip Delay. The insurance company will reimburse you your non-refundable travel costs if your trip is cancelled, interrupted or delayed due to a natural disaster, illness, plane failure, labor strikes or the carrier goes out of business. Many companies will also offer a "cancel for any reason" policy, which gives you flexibility to do just that, cancel for any reason whatsoever, up to 48 hours before departure.

• Baggage & Personal Item Coverage. If someone steals something out of your bag or hotel room, or your luggage is lost or delayed... insurance will reimburse you for your loss.

• Emergency Medical Insurance. You wouldn't want to go without medical insurance in your every day life, you shouldn't when you're traveling outside of the country either. Of course you never expect to become injured or ill when you're on vacation, but unfortunately that happens all the time and medical care in other countries can be very expensive, especially if you end up needing to be transported back to the U.S. Most medical insurance policies will not cover you if you leave the country.

• Accidental Death or Dismemberment. As tragic as it may be to think about, travel insurance can protect you if you or a loved one dies on the trip or suffers a life-impairing accident.

• There are also a select few travel insurance policies that will offer a Best Price Guarantee as well. This means, if the same exact vacation that you have booked goes on sale for a cheaper price, you will receive the difference back. I've personally helped people save hundreds of dollars on their trips who have purchased this insurance policy.

• Many policies will also cover pre-existing conditions.

When is travel insurance maybe not necessary?

In my opinion there are two major factors to consider when deciding whether or not to purchase travel insurance...financial risk and medical concerns.  Are you concerned about losing money due to a canceled, delayed or interrupted trip, lost bags or medical expenses?  Is a large part of your trip non-refundable?  Are you leaving your home country, where your medical insurance won't cover you?  If you answer yes to any of these questions, I would highly recommend adding a travel insurance policy to your vacation package.  If you're traveling domestically and maybe using airline miles or staying with family or your able to cancel your room at the last minute, travel insurance may not be necessary.

Check with your credit card companies to see if they offer travel insurance as one of their perks.  Only 15% of credit card companies offer this, but it's definitely worth checking it out to see if this is something you could take advantage of.  

I hope this information is helpful for you to use when deciding whether or not to add travel insurance to your vacation package.  Always read over the policy thoroughly to see what is and isn't covered so that you make sure you understand what benefits you're getting.  

Happy Traveling!