Should You Buy Travel Insurance?

By Nick Deonas
The traveling public has always asked the question, should I purchase travel insurance? Today there is more travel insurance policies sold than in the past. In fact, the industry is up by more than ten percent compared to before 9-11. More than thirty percent of the traveling public purchases travel insurance. The question still remains though, do you need it or not. Let’s take look at the different types of travel insurance and coverage. Some of the major reasons to consider possibly buying insurance would be:
  • If your trip had to be canceled due to illness.
  • Your passport and or wallet is stolen and you may need replacement documents and emergency cash.
  • Your luggage may get lost, your medication is in the luggage and you will need new prescriptions filled.
  • Your flight may be canceled.
  • The cruise line, airline or tour agency operator goes bankrupt, (something to consider these days), you will need to recover your money and still get to your destination.
  • While in another country you may be involved in an accident, need medical attention or evacuation to a medical facility.
  • A hurricane forces you to leave our resort, cruise or hotel.
  • You may simply need to cancel your trip due to illness.

These are some of the major reasons you would want to consider travel insurance. I have always been a believer in insurance however I am quick to point out that insurance is absolutely worthless, until you need it, then it becomes priceless. It’s really no different from homeowners insurance, you pay for it year after year and in most cases never need it, then something happens and you are so glad you had that policy. Lets take a look at some of the different policies.

Flight Insurance.

Remember when you would see all the little machines at every airport, selling flight insurance. In my opinion I consider this one of the most inexpensive insurance policies on the market today. If you annualized the premium it becomes too costly and given the minimum number of air accidents these days, I say it is too expensive.

Health Care Coverage.

This is indeed an area of concern, and confusion. Most folks think they are covered, under their normal health insurance no matter where they may be, wrong. This thinking does hold true, with most policies within the United States. If you are outside the U.S. though, you are really taking a gamble. The same holds true if you are on a foreign flagged cruise ship, more then likely you are not covered. Another consideration is that even if your policy says you are covered while overseas, in most cases your policy will not cover getting you back to the States, this alone could be an enormous figure. So what do you do if you are considering traveling overseas? Consider purchasing “Medical Evacuation and Repatriation” insurance. I strongly recommend this insurance for anyone traveling overseas. There are many good companies on the market offering this protection. I strongly suggest that you read the fine print closely though. Make sure it says they will fly you to the doctor and facility of your choice and not their choice, this could mean all the difference in the world. Remember, there are countries that if you get injured or become sick, they will admit you without charge, but they will not release you without payment. In other words, you are not in control of the situation at all. So a big YES when considering Health Care Travel Insurance.

Insurance Covering Your Baggage.

You arrive at the gate and check your baggage, you are given that little tag that makes you feel warm and fuzzy that your bags will be waiting for you at your final destination. What a wonderfully world we live in, everything is so perfect, or is it. One of the biggest complaints in air travel today is lost luggage. If you are traveling overseas then I say consider this insurance. When travel between countries there is the Warsaw Convention to consider. It limits liability to about $9.07 per pound of checked baggage and $400 per passenger for unchecked baggage. What about traveling within the U.S? As of Feb. 28th, 2007 the liability placed on the airlines for lost or damaged luggage increased to $3000, up from $2,800. Now this may sound great, but consider the following. Should you ever have luggage lost or damaged you will be confronted with the following; A long list of excluded items not covered such as, jewels, furs, negotiable financial documents and the list goes on. Now to top that off how about depreciation, that’s right, depreciation. Now the airline may have a $3000 limit but that is per incident and not per bag, big difference. I don’t think I have ever heard of anyone receiving a full payment of $3000.

There is one little secret that we can share with you though, if traveling within the States. A little thing called “excess valuation.” Even though the airlines have this available to the flying public, you will not see it advertised, nor will they mention it to you at the ticket counter. You will need to ask for it. It provides up to $5,000 additional coverage, at a rate of $1 per $100 value. You will be asked to describe the contents of the bag. We think it is well worth the time and premium.

Cancellation Insurance.

Strongly recommended based on the following. If you are traveling on a $69 special your investment is not large enough to warrant a Cancellation policy. If your trip is a $10,000 around the world jaunt, the investment is now large enough to warrant it. Make sure your policy covers not only cancellation but also trip interruption. A big yes to this insurance, if the investment is large enough.

There is a policy that is in the same family called Non-refundable insurance. You know those tickets you purchase that are non refundable, this covers it. Again, make sure the investment warrants it. This type of insurance sells for about $12-13 per $100 of coverage, not bad if for some reason you had to cancel your trip.

There are policies on the market that cover everything from extreme sport trips to golf trips. The question is always the same though, should I buy or not? One suggestion we have though is never buy your insurance from the carrier. Always buy it from a third party, if the carrier should go out of business so will your insurance policy. So we are still asking ourselves, to buy, or not to buy? Look at the cost of the policy and compare that to the cost of the trip. If you purchased your ticket with your credit card then you are already covered should your carrier go out of business. This is guaranteed through federal credit laws, covered if you bought or contracted for a service you did not receive. Finally, never forget that insurance is absolutely worthless, until you need it and then it becomes priceless. Some important numbers for you to call to better educate yourself on what is available, good resource sites.
Access America 1-800-729-6021
Travelex Insurance Services 1-800-228-9792
Global Travel Insurance 1-800-232-9415
Travel Guard International 1-800-826-4919
Medjet Assistance; 1-800-963-3538
Air Ambulance Card; Approximately $195 per year for individuals and $295 per year for families.

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