When Do You Need Travel Insurance?

In a recent survey, the US Travel Insurance Association (USTIA) offered a pair of fascinating findings. First, 1 in 8 travelers has experienced a travel disruption or considered changing plans because of world events ranging from tropical storms to political unrest. And second, about 16% of the people who purchase travel insurance file a claim of some kind. This is the highest claim rate of any kind of insurance on the market.

It’s no wonder then that the number of Americans who purchase travel insurance has increased dramatically. Before 9/11, the USTIA has also reported, only about 10% of leisure travelers took out insurance for their trips. Today, this figure has jumped to more than 30%. And I believe that it’s likely to keep growing. At TripInsurance.com, we hear stories every day about travel insurance helping people out of jams or saving them enormous costs. We also hear a growing number of these stories from young people who had once assumed that insurance only made sense for middle age or senior travelers. And we hear all these people say that—for certain kinds of trips—they will never again travel without insurance.

So, when do you really need travel insurance? And when does it make sense to pass on it?

Here are five pertinent scenarios to consider:

√ When you travel abroad—YES. Your personal medical insurance rarely covers you outside the US, and Medicare never does. If you are hurt and need to be evacuated, the price tag can be very high. The typical medical evacuation expense, for example, runs between $50,000 and $100,000. Most travel insurance plans cover this. In addition, travel insurance usually provides translators and a person to help coordinate your medical care. This is an especially valuable service if you are in a country where English isn’t widely spoken.

√ When you pay a large up-front non-refundable deposit on your vacation—YES. Cruises, vacation packages, inclusive resorts, and vacation rentals usually have non-refundable trip deposits. There are countless reasons why you might need to cancel your planned vacation—anything from a death or illness in the family to a boss saying an employee must postpone for business reasons. When you cancel, you won’t lose your (sometimes substantial) vacation investment.

√ When your trip involves making critical scheduled connections—YES.  Travel insurance will cover you, for example, when a flight or other travel delay causes you to miss a cruise. The cruise insurance will even cover the cost to get you to the next port so you can catch up with your ship. Another example is traveling to a major sporting event such as the Olympics or the Super Bowl and missing the magic because of a common carrier delay. While travel insurance can’t make up for the lost experience, it can cover the loss of event and/or ground tour costs.

√ When you buy expensive, non-refundable airline tickets, even for trips inside the US—YES.  If you lose the entire cost of your ticket when you can’t take the trip, then travel insurance or flight insurance can cover the airfare.

√ When traveling inside the US with no non-refundable prepaid vacation expense—NO.  Your medical insurance will cover you inside the US, and a costly medical evacuation probably won’t be needed. You don’t have a large vacation investment that you could lose if you can’t take the trip. In this case, travel insurance is probably not necessary.

When it does or doesn’t make sense to purchase travel insurance is usually not a complicated matter, but it is still an extremely important one to consider. If you have questions about any of these scenarios, don’t hesitate to contact us at www.tripinsurance.com. We’ll be delighted just to answer any questions or concerns you have.