A Closer Look At Travel Insurance

For many, travel insurance is one of those things that automatically get a “thanks but no thanks” response. We’ve been planning this vacation all year and nothing is gonna get in the way of that, right?  But then something does get in the way and we’re left with not only the disappointment of missing out on our trip, but we also have to eat the financial costs of certain aspects of the trip that are non-refundable. Travel insurance can cover some of those items.

While it’s not necessarily a “must-have” for every trip, travel insurance does make sense in certain situations. However, it’s important to know exactly what you’re getting with the insurance you’re purchasing. Here’s a closer look at specific things to consider with your insurance.

First off, understand that there are really two major types of travel insurance:  trip cancellation and medical coverage while in a foreign country. Your personal medical insurance may cover some foreign travel, so double check that prior to purchasing. Also, additional, more specific coverage can be bought for things like lost luggage—just check your options when shopping around.

Trip cancellation coverage is certainly something to consider, especially if you’re taking a longer trip with a heftier price tag. Prices for cancellation coverage vary, but you can usually expect premiums around 5 to 10 percent of your total trip cost.

Check your credit cards, too. Many credit cards come with some type of travel protection coverage. However, most of the terms of the coverage credit cards provide are fairly strict. Cancellation either has to be because of a major medical condition or a serious weather event, like a named hurricane. The coverage won’t likely cover you because you forgot that your Hawaii trip is booked over your Grandmother’s 80th birthday party and you need to cancel.

Certain third-party insurance providers will also give you a few extra perks in addition to your coverage, so take that into consideration when purchasing. Many offer free concierge service that can help you do things like make restaurant reservations, book tours and day trips while on vacation and help with transportation while you’re abroad. Sometimes those features alone make the 5-10 percent of the total trip premiums worth it.

Next time you travel, consider whether or not travel insurance makes sense for you. It can make your life easier and in some cases, it can salvage your checkbook.