Travel Insurance- Things to consider

It's a New Year.  What does that mean for those of us who like to travel? A whole new year of scheduled trips.  But before you start filling up 2017 with exotic travel, I wanted to have a quick chat about something we all hate to think about. Insurance.

I think we all have pretty negative connotations associated with this.  Car insurance--we pay all this money a month and then if we ever need to use said insurance, its a constant battle of getting our refund, deductibles, and other issues.  Health insurance - we pay into it every month and find out just about nothing is covered (specifically dental, the worst!).  Regardless of how you feel, these insurances are required and it is likely that we all pay into them.  But what about Trip Insurance?  How do we decide if our investment is worth the return?  Before we get into "Should I buy it" let's talk about exactly what trip insurance is. 

What is it?

Insurance intended to cover medical expenses that your normal healthcare may not cover as well as travel problems such as general expenses, trip cancellation, lost luggage, flight accident and other losses incurred while traveling internationally or within your own country. It is an extra insurance to cover costs of unforeseen circumstances while traveling, wether it be flight delays or medical bills. While it sounds like an amazing coverage at first glance, it is important to know there are many loopholes and a lot of "fine print". 

Why should you get it?

Travel insurance offers travelers some piece of mind.  It is a source of coverage for unforeseen problems.  From a cancelled flight to a serious illness, travel insurance can help you recoop the costs of every day occurrences.  Travel insurance is also there to help you in the extremely rare cases, even an act of terrorism or the financial default of a travel supplier. If something like an illness, accident, or other covered unforeseen circumstance creates the need for a traveler to cancel or interrupt their travel plans, the traveler faces two potentially major financial losses.  First, is the money invested in (often) nonrefundable pre-payments and secondly, the medical expenses that in many instances may not be covered by health insurance.  If you personal reasons, or reason to believe you may need to cancel a trip, you should consider insurance.  Specifically, you can even get an insurance that refunds a trip after canceling for "any" reason (including work reasons, etc). It is important to note that most insurances can be purchased up to 24 hours before a trip. When it comes to trip insurance, the earlier the better.  If you try to purchase insurance after you are made aware of a weather event, insurance may not provide coverage.   A whole lot of loopholes and a lot to consider. 

A few things to consider

When you are considering trip insurance, it is important to consider factors like:

• Does your medical insurance cover you abroad? And will it cover high-risk activities like scuba diving? Talk to your primary insurance and find out what is covered and what isn't.   Medical insurance while traveling abroad is a necessity for me when I like to be hiking, scuba diving and biking.  
•  Does your credit card offer any kind of insurance? Some may cover the flight if booked with a card.  If flight insurance is your biggest issue, this is something worth looking into. 
• What is the weather like where you are traveling to and from? Are you traveling during hurricane season? Is there a chance that a large storm could hit the week you are traveling?  I am not talking rain on my beach days, but hurricanes and flooding that could potentially cancel your trip. If so, insurance may be a good idea. 
• Was the trip expensive? Is it worth the extra cost for a cheap trip or should you invest to cover an expensive one? The cost of insurance will go up with the cost of the trip but may be worth it for those really expensive trips where you have a lot more to lose. 
• What are the politics like in the area you are traveling? Could there potentially be safety issues that evolve before your trip (terrorism, difficulty with US relations, etc). 
• What kind of coverage would you need? Do you need Trip Cancellation Coverage (this covers specific and limited LISTED events like severe weather and illness) or "any reason" coverage (work, breakups, etc). Traditional Trip Insurance will only cover "Listed Unforeseen Circumstances" and you cannot assume everything is covered. 
• Read the fine print and look over the exclusions.  For example, "I can't afford to go" or going specifically for medical procedures will not be covered under traditional Travel Insurance.  Any Reason Coverage does just about that, lets you cancel for virtually any reason with a few stipulations.  Of course, this will be more expensive than typical travel insurance but worth looking into if you think you will face a non-listed reason. Read the details on Any Reason insurance.  Read more about travel insurance exclusions.   

What I choose

These are the questions I ask myself when considering insurance.  Thankfully, most of my trips have let me to the "no I don't think I need general travel insurance" route.  But when I travel for Scuba Diving trips, I always make sure I have an updated Divers Alert Network (DAN) membership and insurance which will cover all my medical needs (the most expensive trip disaster!).  For just $110 a year ($35 in membership dues and $75 in insurance fees for their middle shelf "preferred plan") I know I have all the extra coverage I need for scuba diving and traveling in a foreign country.  

If you don'y dive on a regular basis like I do and are more of a "vacation diver", then don't worry, you don't have to commit to a yearly plan.  On top of a yearly covered insurance, DAN has single trip plans, and multiple trip plans.  This is a great resource and deserves its own post in the future, but lets get back to general travel insurance. 

Why am I only increasing basically my medical dive accident  insurance through an annual policy instead of taking advantage of trip interruption/cancellation insurance for this trip?  In this case, the Island is safe, we are not going during hurricane season (the weather is almost always perfect!), and the trip is on the cheaper side.  The flight at $450 and the resort at $1,250.  The odds of the airline or resort going under, or a huge storm hitting the area are pretty slim.  But just in case, any of the medical expenses I may accrue (which has happened on a trip before!) usually the biggest expense in travel emergencies, will be covered through DAN. 

So I guess my answer is Yes and No.  Some insurances are worth it, especially those that cover medical expenses!.  If you do go for the insurance route, read the fine print, ask questions, compare prices and shop around.  

Comparing Prices 

There are a lot of various insurance companies out there offering different types of travel insurance.  Travelinsurance.com will allow you to compare policies among different companies like April International, Berkshire Hathaway Allianz travel Insurance and AXA Travel Insurance. If you are going on a dive vacation, I highly recommend checking out DAN's specific yearly coverage policies for divers.  If you are not a diver, they also have a Divers Alert Network Trip Protection plan. If you are shopping for insurance,  Travelinsurance.com is a great place to start.  Here is a price comparison below for different companies. 

Divers Alert Network: Basic: $71

Berkshire Hathaway: $60.25

Allianz:  $58

AXA: $55

Roam Right: $49 

April International: $47

These rates are for a 29-year-old, leaving from Connecticut to Grand Cayman in March of 2017 for one week for a trip priced at $2,000 for the most basic plan that includes trip cancellation (more have three different plans). All in all, these costs are pretty cheap for piece of mind. But remember, rates will vary for each trip depending on each of these factors.  If you already booked your trip and want to consider travel insurance, most insurances can be purchased up to 24 hours before a trip. 

When deciding if travel insurance is right for you, make sure you weigh your options. Figure out if the cost of the insurance is worth fronting for the cost of your trip. Figure out if you need extended medical, trip cancellation or "any reason' insurance. Most importantly, if you do decided to go the insurance route, read all the fine print, make sure there aren't any exclusions that may interfere with your need for insurance. Travel Insurance isn't for everyone or every trip, but its nice to know you can buy peace of mind when you need it. 

Want to learn more about financial protection while traveling?  This article goes into some more detail about problems you can run into while traveling (car rentals, medical bills, etc) and how travel insurance can help you with these issues.  

Happy Traveling, 

Katie