The travel industry is expecting an extremely busy summer as people execute travel plans that have remained on hold since COVID. While the rewards of travel usually outweigh any inconvenience and expense, there are always variables that threaten to disrupt plans. A crush of travelers, combined with an airline industry still reeling post-COVID, could make for upended itineraries. Bad weather and illness may also thwart plans. You may wonder if, as part of your planning, you should buy travel insurance to provide financial protection and peace of mind.
Travel Insurance: Smart Hedge or Waste of Money?
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A Smart Hedge
Travel insurance can be a wise purchase, depending on your trip’s cost, the cost of a policy, and the type of travel you’re planning. You will need to do careful research and read a policy’s fine print as different plans offer varying degrees of coverage. You must ascertain what type of risk you’re trying to cover (i.e. “What could go wrong?”) and make sure you consider a policy that addresses that particular risk. Most policies cover trip cancellation or interruption due to medical emergencies, job loss, natural disasters, or illness. A policy may also offer coverage for medical emergencies abroad, including hospitalization, doctor visits, and emergency medical evacuations. Some policies reimburse you for lost, delayed, or stolen baggage. You may also insure for travel assistance such as 24 hour emergency helplines, language translation, and legal assistance. Certain credit card providers do provide automatic travel insurance at no cost. This is variable between credit card providers, and you should contact your credit card to determine if you qualify.
Or a Waste of Money?
As important to understanding what a policy covers is understanding what it does not. You must read the policy thoroughly to understand the exclusions, limitations, and documentation requirements. For example, many policies will not cover incidents related to pre-existing medical conditions or risky activities. Before you buy a policy, consider your health condition, the safety of your destination, your personal circumstances, and the trip value. All of these factors will have a bearing on whether a potential loss would be covered and whether you should invest in travel insurance. In many cases, an insurance company will do anything in their power to find an excuse to avoid providing coverage.
It Depends...
While travel insurance is not considered to be an exorbitant expense, nobody wants to spend money on something he or she may not ultimately use. As with all insurance purchases, you want to weigh the premium cost against the amount you could lose if a travel mishap occurs. Travel insurance premiums will vary depending on factors such as the traveler's age, destination, trip duration, and coverage level. You should also confirm whether you have any overlapping coverage, provided by your credit cards, homeowner's insurance, or medical insurance policies. Review your existing policies before purchasing additional insurance.
With research, comparison shopping, and close reading of policy terms, you can determine if buying travel insurance makes sense for you. It can help to read reviews from other travelers to gain insights into a specific insurance provider's reliability, customer service, and claims process. Consult with travel agents or your financial planner for expert advice from someone who does not have a conflict of interest regarding the decision.
Purchasing travel insurance adds an additional cost to travel expenses but can provide valuable protection against unforeseen events. Contact us if you have questions about travel insurance or any financial decision. We will help you sift through the different considerations and make the best decision for your circumstances.