With the many types of insurance out there, from pet coverage to new models for car insurance policies, it’s hard to keep track of which options are actually worth the investment. The good thing about travel insurance is that rather than making ongoing monthly payments, you just pay for coverage of a single trip. Of course, like other forms of insurance, most people lose money on travel insurance. Chances are good that a natural disaster or medical emergency is not going to put a damper on your vacation, but for some travelers, it’s worth paying for the peace of mind.
The two main types of travel insurance are international and domestic. International coverage typically covers medical expenses and is more expensive. The Insurance Information Institute says a typical international travel insurance package will include trip cancellation, travel delay, lost or delayed baggage, medical, dental, emergency evacuation, 24-hour traveler assistance, and accidental death, with some policies including rental car collision and damage coverage. The cost of travel insurance generally ranges from 5% to 7% of the price of the trip, according to the Institute.
Consumer Reports warns consumers not to buy policies from travel agents, as they will likely be seeking commissions from the sale of high-priced policies. An online broker such as InsureMyTrip.com is recommended, and before purchase, Consumer Reports suggests asking the insurer for a sample copy of the policy. Also be sure to ask whether all of your specific concerns are covered and have the representative locate them for you in the fine print.
Study abroad students or professionals traveling for work can often receive travel insurance through their school or company, and discounted insurance policies may be offered through organizations like USAA, AAA, and AARP. Keep in mind, however, that travel insurance is particularly rife with exclusions and limitations, so even at a discounted price, travel coverage may not be worth the cost. According to NerdWallet, stolen baggage isn’t covered if you’ve been “negligent” with it, mental health is frequently excluded, and you can lose coverage after having just one alcoholic drink, just to name a few exceptions.
Bob Hunter, director of insurance at the Consumer Federation of America, says travel insurance is often not worth the price. “Don’t buy insurance that covers small, manageable losses or only a slice of risk,” he explained. Consumer protection laws, in some cases, may help you if you are traveling without insurance or have gaps in coverage. Here are some more reasons you might not need to buy travel insurance after all.
1. You’re already covered by a different insurance policy
Travel insurance is often redundant, meaning it overlaps with other policies you have in place. If you already have protection through homeowners, auto, life, or health insurance, travel coverage may be unnecessary. Check the specifics of your existing insurance policies to help determine if it’s worth insuring your trip.
2. You’re already covered by your credit card
One of the most common reasons people elect to skip purchasing travel insurance is because they already have coverage provided by their credit card. An article in NerdWallet provides a detailed breakdown of what services are provided by Visa Signature, World MasterCard, American Express, and Discover Escape. If you are a cardholder, look into what services come free, and remember to make the necessary travel purchases with that credit card to ensure coverage.
3. All you want is medical travel insurance
If your health insurance doesn’t cover you internationally, and this is your main concern for your trip, consider a medical-only travel insurance policy. Also, be advised that even if your health plan covers you abroad, it may not pay for emergency evacuation to a hospital, so check the details of your coverage before departing on your vacation. Consumer Reports warns that with travel medical insurance, pre-existing conditions may be excluded, so ask for this information up front.
4. All you want is term life insurance
Some travelers turn to travel insurance simply because of the risk of loss of life during airplane travel. But if that’s the case, a travel insurance policy may not be the best deal. “If you’re worried about dying in a plane crash,” Hunter explained, “you should get term life insurance rather than flight insurance, because you might die in a car crash.”
5. You’re only worried about lost bags
Consumer Reports does not advise purchasing travel insurance exclusively for small losses, like stolen or lost luggage. It’s one of the most common worries associated with travel, but it’s not probably not worth the high price of a travel insurance premium. In some cases, the airline will compensate travelers for lost or damaged bags up to a certain amount.