Is Travel Insurance Worth the Cost?

It’s that time of year again. Summer. Time for t-shirts, shorts, sunscreen and that big summer vacation you spent the last few months planning and saving for. If you are getting ready for that big annual family vacation or are a frequent flyer, you have inevitably been given the chance to purchase travel insurance. But do you really know if it is a good deal or not? Anytime you travel extensively, you could be at risk of financial or physical loss. However, there are several things you should know about travel insurance when considering your options.

Understanding the basics:

Traveling always involves risks — such as the risk of getting sick or having an accident, losing or having your valuables stolen or missed flights. Travel insurance can give you some peace of mind by helping to reduce your chance of financial loss related to these risks.

There are five main types of travel insurance offered, although you can buy supplemental policies to provide coverage for specific concerns such as identity theft. Most of these different types of travel insurance can be purchased in a combination travel insurance package:

Flight Insurance: Flight insurance is basically a life insurance policy that covers you in case the plane crashes during your trip.

Baggage Insurance: This covers your luggage that is either delayed, lost or damaged during your trip or flight. It is included in most package travel insurance policies. There may be exclusions or price caps on jewelry, electronics or other expensive items.

Trip Interruption/Cancellation Insurance: This will cover your expenses if your trip is interrupted for some unforeseen reason such as health issues or if an organized tour that you have prepaid or gets canceled. This insurance covers the non-refundable fees you have paid in to take the trip and can also cover you in the event you have to miss a trip because of an accident or inclement weather.

Medical Insurance: A medical travel policy provides additional coverage if you are traveling internationally and can help pay deductibles or “out-of-network” provider charges that your current health insurance does not pay. Generally, this type of medical insurance picks up and pays your health care expenses that your primary healthcare policy does not cover.

Evacuation Insurance: If you purchase evacuation insurance, this will cover the cost of transporting you to a medical facility where you can receive appropriate treatment in the event of an emergency. This type of policy is subject to exclusions for dangerous activities such as skydiving, although additional supplemental insurance may be available to cover sports adventure activities.

So, who does and doesn’t need travel insurance?

There are several companies that write only travel insurance. Travel insurance may also be offered to you in part of a car rental contract of as part of a vacation package bought from a travel company. For someone who travels extensively and wants the peace of mind to know that they are covered in the event that the worst happens during a trip, travel insurance may be a good idea. However, if you rarely travel or have coverage already through another type of insurance policy, buying travel insurance may be a waste of money.

Coverage You Didn’t Even Know You Already Have

In some cases, travel-related losses may be covered by your renter’s insurance, homeowner’s insurance, medical insurance or even coverage for loss provided by your credit card company. It pays to check into what coverage you may already have in place before deciding to purchase additional travel insurance that you may not need.

Only you can decide if the cost of travel insurance is worth the peace of mind of being protected against the financial risk associated with traveling. If you travel extensively and want to make sure you are protected, take some time to shop around and get the best value on an insurance policy.

Safe travels!