Travel insurance can add anywhere from 7 percent to 20 percent to the cost of a trip, depending on coverages.
Do you need it? Probably Yes.
Do you want it? Probably No.
Like for most insurances, we often resent paying for travel protection, right up until we need to make a claim. Then we pat ourselves on the back for being prepared. Still, we have a number of clients who decline travel protection at every turn. They have made the determination that it’s just not cost-effective. As one told me, “If I can’t afford to lose the money, I can’t afford the trip.”
For the rest of us, for whom big trips are a big investment that we don’t want to risk …
Coverages
A policy should cover some or all of the following:
Trip Cancellation — Money back if you must cancel the trip for a covered reason. This is different from simple trip protection, a non-insurance product that simply waives your cancellation fees.
Trip Interruption — Should you need to return home during your trip, due to a covered reason. If you have ever tried to book and pay for last-minute tickets home from overseas, you understand.
Medical and Evacuation — Should you need hospitalization or medical evacuation back from your trip. Keep in mind that Medicare does not pay for treatments for travelers outside of the United States and its territories.
Lost/Delayed Baggage, Miscellaneous Coverages — For the inconvenient and costly things that can happen but don’t completely shut down a trip.
As a rule, the more remote your destination, the more coverage your might want or need.
Real travel insurance is tightly regulated and overseen by state boards of insurance. Part of the quote process will request your state of residence.
Cancel for Any Reason (CFAR)
Cancel for Any Reason (CFAR) coverage came under the spotlight during the pandemic, because it was the only coverage that protected travelers who unilaterally canceled trips. You see, pandemics, travel warnings by the State Department or Centers for Disease Control (CDC), (or fear of being sick or stuck somewhere) are NOT covered reasons under travel insurance plans.
CFAR gives travelers an out to cancel for an uncovered reason, or to simply change their minds. That’s the good part. The bad parts are:
A) CFAR is expensive coverage, adding another 20 percent or so to the insurance cost.
B) CFAR will not reimburse at 100 percent; usually it’s 75 percent of the unreimbursable costs.
Choosing the best
We are firm believers in the value of travel insurance, but we don’t want to sell it. Nor are we licensed for that. You won’t find links to insurers, even our favorites. We recommend visiting some comparison sites. Some of the most popular are InsureMyTrip.com, Squaremouth.com and TravelInsurance.com.
You can enter criteria based on what is important to you, and you will receive plan and pricing information accordingly, from a number of insurers.
Travel Insurance plans typically carry a 10-14 day review period. Do not buy a plan without one, and once you buy, READ your policy. It’s not exciting, we know, but you need to know and be satisfied with your coverage.