Rental car companies and airlines have, arguably, spawned the negative response that some of us have for travel insurance. Most of us know that Flight Insurance and Loss-Waiver Damage Coverage are sucker bets. And that attitude, for many of us, has extended to travel insurance.
But, comprehensive travel protection is a different entity and you should evaluate it like other insurances with your specific needs in mind.
Do you insure your car or your home? Do you think you’ll ever need to use it? Hopefully, not. Insurance is one of those expenses that we incur with the hope that we’ll never utilize the product. We do so because of the great financial risk, otherwise.
Travel insurance is no different. You hope you’ll never need it. But, boy if you do, it is great to have. Do you need travel insurance every time you travel? Probably not. Then, when?
Here are a few considerations to help you decide if you should purchase travel protection.
1) Medical coverage. No one wants to think about becoming seriously ill or having an accident while on vacation. But, it does happen and most US health insurances will not cover medical expenses outside the US. Oh, and FYI, cruise ships are considered foreign entities. If you do become ill or have an accident do you have resources to cover your medical expenses?
Example: A gentleman broke his leg while para-sailing in Mexico. He didn’t have travel insurance and his health insurance didn’t cover him in Mexico. He sat in the hospital waiting room for 12 hours while his friends and family scurried around trying to raise $25,000 cash via credit card advances and wire transfers before the hospital would admit him. And, his expense didn’t end with the hospital bill. After he had his leg set, he incurred extra costs to book a flight home (he had been on a cruise). He is fine now and has a unique, albeit expensive, anecdote to tell.
2) Medical evacuation. While some health care systems are far superior to ours, many are less than adequate. If you have an illness or injury in a country with less than stellar medical care, you want to be moved quickly to a suitable facility. And, even if you are in a country with great medical care, you want to be able to get home as soon as is safe. If you need to be accompanied by a nurse or need more than a regular airline seat to get home, can you cover the extra cost?
3) Trip cancellation or interruption. You are on Day 2 of your dream vacation and you get a call from home. Your father-in-law was hospitalized with a heart attack and is not expected to survive. Not only will travel insurance cover your costs to get home, it will reimburse you for the vacation missed.
4) Travel delays. You allowed plenty of time for your connection in Heathrow, en route to your cruise departing from Athens, and even included a pre-night stay in Athens so you’d make your cruise in plenty of time. Oops. Transportation strike in Greece. No flights in or out for 72 hours. Do you have the extra bandwidth to cover expenses to catch up with the cruise in Santorini?
Those are the four main elements of risk that I think you should consider. There are a lot of other things that travel protection will cover. Theft or loss of passport, delayed or lost baggage are a couple of examples. For me, these are nice little extras to have, if needed. But, I don’t evaluate my need for travel protection based on the possibility of the airline losing my bag.
Not every vacation carries the same amount of risk. You should review your health insurance policy, consider the amount of financial risk you are comfortable with, consider where and with whom you’ll be traveling, and then decide if travel protection is needed.
Do you buy travel insurance?.
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