It’s a certain type of traveler who takes pleasure in planning out the minute details. While some might find it tedious to pore over image after image of hotel rooms in search of the right one, to others this is all part of the fun.
But even planners are less enthused when it comes to choosing travel insurance, and that’s if they purchase coverage at all. With so many policy types available, the process of choosing can feel a bit overwhelming.
Do You Really Need to Buy Travel Insurance?
The answer to that question depends on how much of a risk you can afford to take. For a routine weekend away, there’s probably less on the line should something go awry. But if you’ve planned a two week trip around Europe with a string of hotel, train, and tour bookings paid in advance, you could easily lose thousands of dollars should something go wrong.
Some unforeseen illness or injury mid-trip and you may suddenly find yourself stuck with an astronomical hospital bill. If that’s money you’d rather not lose, then it’s probably in your best interest to purchase some form of travel insurance.
Below are the most common types of travel insurance to consider purchasing before your trip.
Trip Cancellation Insurance
There are all sorts of things that can and do go wrong in the days leading up to a trip. Aside from sudden illness or injury, what if you hit a financial snag due to job loss or bankruptcy? What if you and your partner suddenly divorce or split up and no longer want to travel together? What if you just decide you don’t really want to take the trip after all? The rules of coverage will vary by each specific policy, so choose wisely.
A cancel for any reason policy is the best way to go and allows the most flexibility, and you’ll find all that freedom reflected in the cost. These types of policies are among the most expensive but often worth it.
Hotels, vacation rentals, tours, and cruises require advance deposits. Cancel and you can kiss that money goodbye. Maybe one isn’t such a loss, but for longer trips, those deposits can really add up. Again, if you’re not comfortable eating the cost, trip cancellation insurance would reimburse you for these types of non-recoverable deposits.
Trip Interruption Insurance
Trip interruption covers more than just you getting sick. In the event that a family member back home should fall ill or suffer some unlucky incident, a last minute flight home most likely won’t come cheap. In this case, some form of trip interruption insurance could really save the day. This type of insurance also covers the bills if your traveling companion has to return home leaving you to pay as a solo traveler. It also includes labor strikes, equipment failure, and even weather related snafus.
Primary Medical Insurance
You may be fit as a fiddle upon departure but, again, there are no guarantees. One klutzy misstep could land you in a foreign hospital where most domestic insurance doesn’t do a bit of good. Even if it does, you’ll still be expected to pay on the spot, however high the bill. If you’d prefer to avoid both a medical and a financial emergency, definitely spring for primary travel medical insurance which will help with upfront costs.
Medical Evacuation Insurance
If you’ve managed to injure yourself on some hard to reach mountain peak, medical evacuation insurance will cover your transportation by helicopter or private jet to wherever it is you need to fly to receive care. Companies like MedJet Assist can fly you to any hospital of your choice and then back home once you’re well enough to travel. Without insurance, such a trip could cost well over $100,000. If, like most people, that’s not a figure you could easily pay then definitely consider springing for medical evacuation insurance.
Can You Rely on Credit Card Travel Insurance?
Before you take the time and energy to research and purchase travel insurance for your next vacation, you should first take a look at your own wallet. Your everyday credit card may have some amazing and versatile travel insurance perks that you don’t even know about. For example, if you have to cancel an upcoming flight prior to departure due to illness or injury, your credit card might cover all of the non-refundable fees.
Additionally, if the airline loses your luggage or something breaks at the hands of the airline you’re flying with, you may be looking at a full refund if you booked your flight with your credit card. In cases of temporarily lost bags, some cards will cover daily incidentals under a certain amount, including toiletries, clothing, and other essentials.
These services vary based on the card you’ve used to book your trip. They can certainly help in a pinch, even when it comes to small inconveniences, like an item being left on the plane after landing.
- Trip interruption or delay: Needless to say, no card covers all possible causes of a delay. If it's not in the "covered reasons" (for example, a crew showing up late for your flight or congestion-related air traffic control delays) you're on your own.
- Trip cancellation: Again, if you or a traveling companion or immediate family member becomes ill or injured before departure your credit card could help. Many credit cards cover non-refundable trip arrangements, but anything triggered by pre-existing conditions would not be covered.
- Lost or delayed baggage: Different cards define a delay differently: for some it's just four hours, for another it might be 12 hours. And in almost all cases, lost bag coverage is in "excess" of whatever you collect from your airline or any other insurance you might have, such as homeowners insurance (although if your policy deductible is $1500 and the loss is $1000, you might not have to make a claim if you present your policy's declaration page to the credit card company's representative). Even computers, cell phones, and jewelry are covered by some credit cards, although for no more than $500 per incident. But at least it's something, and airlines don’t cover these things at all.
Cards vary in their deadline for making a claim, so in some cases, if you've had a recent loss but didn't know you had coverage, you may still have time to file a claim retroactively to your credit card issuer (some claims can be made a full year after the loss). However, some cards require that you pay the entire cost of your trip on the card to qualify for coverage, while others settle for just a portion of the trip. In some rare instances, some cards may only pay for roundtrip transportation, not one-way trips.
This free coverage will never be as extensive as a policy you purchase separately from a company like Travel Guard or Access America, but neither is it something to ignore and if you've had a recent loss you even might be able to file a claim retroactively.
You can compare credit card offers here but if travel insurance is your primary focus, be sure to read what each one offers before applying, because they’re not all the same.
What is Excess Valuation Insurance?
Excess valuation is basically extra insurance that you can buy when you check in your luggage. It’s over and above any liability that the airline is required to pay if your bag and its contents are lost or damaged. On domestic U.S. flights, the airline’s standard liability is no more than $3500. By paying a relatively small fee, you can up the coverage to $5,000 on most airlines.
For most people, it’s not worth buying on domestic flights. But where it’s very useful is for international flights, because airline liability is much less when traveling outside the U.S.
Beware though: you’re still not covered for cash, camera equipment, commercial effects, electronics, jewelry, works of art or other valuables.
Should you buy travel insurance from your airline or a third party site?
Anyone who has ever booked a ticket online has surely struggled with the question of booking the insurance offered by your airline or booking site? Most of the time, it doesn’t appear to cost all that much. In fact, if you’ve ever shopped around for third-party travel insurance, the policies offered by your airline may seem suspiciously cheap. What, if anything, can these dirt cheap policies actually cover? Not much, it turns out. In general, the policies offered by the airlines have more loopholes than what you’ll find at reputable insurance companies like Allianz Global Assistance, Berkshire Hathaway, World Nomads, United Health Care, and Tokio Marine HCC.
Where to Buy Travel Insurance
For a more comprehensive look at who offers what, we recommend buying through one of the several independent online agencies that specialize comparison searches. Among them: