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Do You Need Travel Insurance?

Do You Need Travel Insurance?
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By Kitt Walsh

When the grill has barely cooled off from the Labor Day burgers, my mental suitcase is packed and ready to go. It’s fall and that means it is time to hit the road (or jetway, train track or ship lane) so I, once again, have to research if travel insurance is a good idea. One in three travelers do buy it, so says the American Travel Association, hoping they can recover some or all of their money if things go sideways.

You should join them and buy travel insurance if:

You are taking a cruise: Back in the day, cruise lines were much more flexible if you needed to cancel and rebook. With the chaos and cancellations caused by the economic downturn, the virus scares and the recent sinkings of ships (all of which caused cancellations to spike over the last 5-7 years), if there is any chance you might have to rebook; have a complicated travel plan to even get to the ship (including not having enough time to reroute connections to get to the port if your flight is cancelled); or if you are traveling with or have yourself some medical problem (like a heart condition) that may necessitate you having to leave the ship suddenly, buy the travel insurance. The ship’s doctor can handle minor emergencies. The last thing you want to pay for is a helicopter to come retrieve you if you have a heart attack, which is why I never took a cruise with my silver-haired honey, he of the three prior heart attacks, without buying a policy to cover him. (To save money and because I was a decade younger and healthy, I did not buy a matching one for me.)

You’re going on a group tour: Pretty much ditto the above, minus the water. Group tour booking offices are notorious about holding on to every one of your cents till they have claw marks on them.

You get anxious about traveling in general: I’m not talking about being a white- knuckled flier (though that’s one symptom), but if you are fearful or nervous, buy yourself some peace of mind. Travel should be fun, not cause for more stress.

You are headed out of the country: Hospitals and health practitioners overseas often require up-front payments (at least partially) and travel insurance will cover these. A friend of mine got hit by a car crossing a Dublin street and, when he woke up, surrounded by nuns in white habits, he was sure he had died and gone to heaven. When the hospital required thousands of dollars off the top, he reversed where he thought he had landed. His financial situation was a living hell for more than a year.

You are on Medicare and headed overseas: Your policy probably won’t cover you for foreign climes and you don’t want to be arguing with a hospital in Dubrovnik or get a bill from South Africa that may put you back in the hospital when you see the amount you owe.

You are spending big bucks: $5,000 or more is a chunk of change for almost everyone. Insure your big-ticket purchase.

Don’t bother buying travel insurance if:

You have some fabulous private insurance: A policy that covers medical evacuations and out-of-country care may mean you can skip buying travel insurance (read your policy carefully all the way through before making up your mind and, if you have a preexisting medical condition, make sure you are covered outside of your “network” or while traveling.)

You are traveling within the US: Domestic flights and arrangements aren’t usually that expensive that it would kill you if the trip got cancelled (most US air carriers will usually rebook for some less-than-original fee and hotels have fairly liberal cancellation policies.) If it’s a short or inexpensive trip you have booked, you probably don’t need insurance. (If, however, you bought that once-in-a-lifetime month-long trip to Alaska or Hawaii, better insure that dream vacation.

You are using miles to fly: Some travel insurance policies cover the cost of redepositing your unused miles back in your account (and only some airlines allow such redepositing), so check your frequent flier account rules (and fine print) and consider if buying a policy makes sense to you.

You have one of those only-for-aristocrats credit cards: Some cards will cover most of the untoward situations that can befall a traveler (with the exception of medical expenses or medical emergencies), so check your cardholder agreement to make sure you are covered for interruption or cancellation and then you won’t buy a travel insurance company and find you have ended up paying for double coverage.

How to get a policy:

If you use a travel agent, buy one through them. You can save a lot of time that way and get your questions answered without spending hours on the phone (that’s the travel agent’s job).

You can buy the policy recommended by your travel tour company. You might want to do some online research first (see below) to make sure you are getting a good deal and be careful-–if the tour company offers their own policy, instead of using a reputable stand-alone company, and the tour company folds, you will be out of luck and your money gone for good.

Research online. I’m a big believer in reading other people’s experiences as part of my research, so hit up TripAdvisor.com and read reviews. The US travel Insurance Association also offers a list of their member companies they find reputable at http://web.ustia.org/Travel-Insurance-Providers.

A few other things you should know:

There are two kinds of policies: Primary, which means the insurance company reimburses you before any other insurance does  and Secondary, that means you have to file a claim with your other policies (like medical or homeowners) first.

You should buy a policy as soon as you can. Most policies won’t cover your pre-existing medical claim (the type that makes up 20% of all travel insurance claims) unless you booked it within two weeks or more of your first trip payment. Check the conditions carefully of the policy you intend to buy.

What should the policy cost? That depends on where you are going, how old you are, the length of the trip and the method of travel, but the policy will likely run you between 4 -8% of the total cost of the trip.

Wherever you are headed, happy trails and safe travels.

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