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When Does Travel Insurance Make Sense?
Travel insurance provides some protection against a variety of things that could disrupt your trip and end up costing you money. The basic kinds of travel insurance include:
Trip cancellation or travel interruption. This can help you recoup all or part of the prepaid cost of your trip if you – or sometimes a loved one – gets sick or injured before you leave or while you are on the trip.
When considering this kind of coverage, be sure to read the fine print so that you understand what – and who – is covered. Once you understand the policy, you might consider this coverage if you are booking a trip with a large up-front payment. It also might make sense if you have a higher-than-normal risk that you won’t be able to make the trip, such as if you have health problems or if you are going somewhere that is prone to civil unrest.
Before you buy extra insurance, though, see if you are covered in another way. For example, some credit cards provide travel cancellation or interruption coverage when you pay for your trip using that card.
Baggage protection. This can cover both lost luggage and the costs you might incur if your luggage is significantly delayed. Although the airlines provide some level of coverage, it might not be enough if your bags are permanently lost. And it might not kick in until your bags have been “delayed” for a long time. It also usually does not cover jewelry, electronics and other valuables.
Check with your insurer to see what kind of coverage your policy provides for bags in transit. If you are carrying expensive items, it might be necessary – and wise – to get a short-term rider for your policy. Also see if you have coverage from another source, such as the credit card you used to book the tickets.
Health and evacuation insurance. This is most important when you are traveling internationally. You should check with your insurer to see what kind of coverage you have overseas and how that coverage works. It is important to note that Medicare probably does not cover you outside the United States.
If you have coverage through a personal or employer health policy, you could end up having to pay for your overseas care upfront and then seek reimbursement from the insurer. Even if you eventually receive reimbursement, having to come up with that money immediately could be a financial burden.
Also see what, if any, coverage you have for emergency evacuation. For example, if you break your leg skiing and have to be helicoptered out, are you covered for that? What about if you are in a remote area and need to be evacuated to a hospital? Medical evacuation coverage can pay these costs. But it is very important to read the fine print. For example, most coverage pays only to get you to the closest appropriate hospital; it probably will not pay to bring you back to the United States.
These kinds of coverage might make sense for you if you are spending a long time overseas or if you are going to be somewhere remote or doing something risky. And of course, if your own medical insurance does not cover you, you should find appropriate protection.
Most experts do not think the average traveler needs to buy non-refundable ticket coverage, which is relatively expensive compared with the benefit. They also say you should not buy travel insurance that pays if you die; you should have other kinds of life insurance for that.
Finally, if you decide to buy travel insurance, buy through an insurance company that offers the coverage, rather than through your travel agent or tour company. It probably will cost you less, and you will still have coverage if your travel agent or tour company goes belly up. And, as with any insurance, be sure that you fully understand the coverage you are buying.