When to buy travel insurance and when to skip it

Chicago-area resident Lori Park and her 80-year-old mother, Nancy Park, were on a cruise in Hawaii when Nancy fell ill. She spent five days in the ship’s hospital before being evacuated to Mexico and then repatriated to the United States.

All of that medical care and transportation added up to thousands of dollars in unforeseen expenses, but it was all covered by $436 worth of travel insurance the two women purchased before they left.

Lori Park says she never takes vacations without insuring them. “It’s something I consider essential when I travel,” she notes.

Do you need travel insurance?

There are five main types of travel insurance: flight policies that pay out if your plane crashes; baggage insurance to cover damaged, lost or stolen baggage; interruption/cancellation insurance to reimburse you for trips that do not take place; medical insurance for doctor visits and hospital stays; and evacuation coverage that pays to move you to an appropriate medical facility. You can buy them individually or in bundles.

Travel experts say insurance can help people avoid potentially catastrophic costs, as was the case with parks. But it’s not necessary for everyone.

“Insurance adds about 13% to the cost of a trip,” says Jay Smith, president of Sports Travel and Tours in Hatfield, Massachusetts, which specializes in sports travel. “If someone is traveling locally, or if the plane ticket is refundable or usable in the future, and the hotel has a cancellation before the trip – even if it is 48 hours before – then there is no no real reason for insurance.”

You don’t need insurance that covers accommodation and airfare if you plan to stay with friends and purchase your ticket with redeemable loyalty points. You would insure only for events that would expose you to large financial losses (for example, developing a serious illness requiring hospitalization or missing a cruise due to flight delays).

Read also : 12 Ways to Adjust Your Vacation for Inflation

How to buy travel insurance

To find a suitable policy, you need to consider the type of cover you need and the degree of risk exposure you can afford, then look for a low premium.

Insurance companies set the cost of a policy taking into account your destination, modes of transportation (scheduled or charter airline? Rental car or taxis?), accommodations (cruise ship? Resort? Airbnb ?), activities (swimming with sharks? Skydiving?) and local weather (hurricane season in the Caribbean?).

Then they look at age and pre-existing conditions. Insurance will be more expensive for an 80 year old than for a 70 year old. People in their 60s, who take a long cruise abroad, even fully vaccinated, have seen quotes of $10,000. That’s why it’s important to shop around and compare policies, benefits and costs.

What coverage do you want or need? With COVID still active, you may want to cover yourself and your group against illness. Choose a policy that provides primary medical coverage rather than secondary coverage; the latter requires you to first submit claims to your regular health insurer and then sue the travel insurance company for any outstanding balance.

The cost of travel insurance will depend on the amount of medical and evacuation coverage you purchase. Higher dollar limits are better, but more expensive. You may want to consider ‘cancellation for any reason’ insurance, which, as the name suggests, will reimburse the cost of a trip you cancel for any reason, even if you have just changed of opinion.

“It’s always a good idea to cover your prepaid, non-refundable travel expenses, especially during hurricane season,” says Dan Drennen, director of sales and marketing for the Travel Insurance Center in Omaha, Nebraska. “If you purchased valid Trip Cancellation-Interruption Insurance before a storm was named, you can rest easy knowing that if a hurricane ruins your trip, it won’t destroy your bank account. »

It doesn’t take a hurricane to illustrate why it’s worth considering travel insurance. Janet Jones Caraker, of Island Jack’s Travel in Dexter, Missouri, says she knows a traveler who took her entire family, husband, adult children and grandchildren on a trip to Ireland. They chose not to buy insurance and while they were there the woman’s husband died.

“There is no sorrow as a duty [pay] $100,000 to have her husband’s remains picked up and shipped home,” Caraker says. “There are people who can afford it, but most can’t.”

It’s not just about how much you could lose if you can’t or don’t make this trip; that’s how much a replacement holiday will cost you? How much will transportation, accommodation and activities cost more next year or the year after? And when will you get the chance to take that vacation, especially a must-do trip that requires coordination of vacation days for members of multiple families?

Also see: Don’t Be Fooled By These Myths About Travel Insurance And What It Covers

How to save money on travel insurance

Just as coverage can vary from insurer to insurer, the price can also vary. To save money on insurance, start by checking your credit card to see if it offers coverage. If you choose to pay for insurance, buy as little as you need – if your luggage is worth $2,500, don’t insure it for $15,000. If you pay for a cruise, resort, or flights with replaceable points, you don’t need to insure them at all.

For the most part, Medicare does not provide coverage outside of the United States. If you have a private Medicare Advantage or Medicare Supplemental policy, see if they offer such coverage. Otherwise, you will need a travel insurance policy that reimburses medical expenses abroad. If you travel frequently, consider an annual policy that covers all of your travels.

If you pay for your holiday in installments before your trip, will the insurer allow you to pay for the insurance in comparable installments? You don’t want to pay the full cost of insurance if you only put down a 10% deposit.

Determine what a pre-existing condition is. Generally, if you have diabetes, for example, this is only considered “pre-existing” if your medications are changed within about two weeks of leaving.

Related: Why take out travel insurance? You may already be covered.

Ultimately, if you’re buying travel insurance, you need to read the fine print and take plenty of notes so you can compare what’s offered, what’s not, and what it will cost.

Judy Colbert, author of 36 books, writes about travel and the business of travel.

This article is reproduced with permission from NextAvenue.org© 2022 Twin Cities Public Television, Inc. All rights reserved.

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