Most travel insurance carriers calculate insurance fees based on trip cost. You would think that it would be a simple formula to calculate. How do you determine trip cost? What do you insure to give yourself maximum protection at minimum cost?
The rule of thumb is to insure those portions of your travel plans that are non-refundable, or anything with a cancellation penalty. If you book online at Travelocity or Expedia, for example, simply add the separate costs for air fare and hotels that are non-refundable and use that for your trip costs. Those are the portions of your travel that are protected by travel insurance. If your hotels are refundable and you are using mileage points to pay for your tickets, then the cost of your trip is anything incurred to redeem those mileage points, plus the cost to restore those points to your account if you have to cancel your trip. You can use $50 as a baseline for mileage tickets.
When making your calculation, be sure to include any excursion costs, such as theater tickets, events for sporting events, those scuba lesson reservations – anything you have to pay for in advance. If you are renting a vacation home or taking a cruise and there are stiff cancellation penalties, insure the total amount of the cost of the cruise or vacation rental.
Remember that even if you have negligible trip costs, you still want to carry insurance so you can have such protection as medical coverage, emergency medical evacuation and baggage coverage. You will also get limited protection for trip cancellation and trip interruption, which are based on trip cost. Trip cancellation should be a minor concern if you have no penalties for cancelling. Trip interruption helps you get home in case of a family emergency, or rejoin your trip if you encounter a problem along the way. Remember that if you book with little or no trip cost you will be under-insured if you have to return home on short notice.
When you are traveling with multiple parties or family members, be sure to split the costs of the trip appropriately between your fellow travelers. Bysplitting the costs – if one of them has to stay home you’ll have coverage for their cancellation costs. If you are traveling with children and hotels and other costs are lower, factor that in so all the adults are properly covered.
If you buy within 14 days of making your trip deposit, you are eligible to purchase Cancel for Any Reason coverage on your policy. All the Best policies at TripInsurance.com included cancel for any reason. And be sure to cover the entire amount of the non-refundable portion of your trip; don’t round down. Insurance companies insist you insure the total value of the non-refundable portion of your trip. That’s why you want to be certain of your trip costs before you buy insurance. If you buy the insurance before you know all your final vacation expenses, and your total trip cost changes, you can contact TripInsurance.com at any time and we can adjust the trip cost on your policy for you. If you trip cost goes up you just have to pay the difference in the premium. If you trip cost goes down, we can refund the difference in the premium.
Understanding how to value your trip will help you get the right amount of insurance coverage and save you money and headaches in the long run. If you have any questions, you can always contact us before you buy.