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March 2017
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Should You Buy Travel Insurance for That Big Trip?
Deciding whether you need insurance based on travel destination, length and itinerary

Youíve just booked your vacation and the excitement is settling in. Now itís time to decide whether you should buy travel insurance for that big trip. Is it worth it?

Types of travel insurance editor Jeff Reeves reports that according to the Travel Insurance Association $1.9 billion in travel insurance policies are sold annually.

Reeves lists five options for travel insurance policies:

  1. Medical: Especially if youíre traveling internationally, having medical travel insurance can help you cover the out-of-pocket costs if you end up with a stomach bug or get hurt while in another country and need to seek medical attention.
  2. Evacuation: This type of travel insurance will help cover the costs of locating a place to stay should you need to evacuate the residence in which you are staying on your trip, such as in the event a natural disaster or political unrest.
  3. Cancellation: The most common type of insurance, cancellation travel insurance helps recover almost all your funds should you need to cancel your trip, whether because of an injury you sustained at home before leaving or because of unexpected canceled trip arrangements, such as the tour company you were booked with going bankrupt.
  4. Baggage: Another common insurance policy for travelers, this type insurance will reimburse you for baggage that is lost, stolen or damaged.
  5. Death and dismemberment: This policy acts similarly to life insurance, and will provide payout to designated beneficiaries should you die during your trip.

Deciding whether any of these policies are worth it is ultimately a personal choice that may depend on your traveling circumstances and your existing health and life insurance policies.

What to consider before purchasing insurance

Youíll need to first look into your current plans, as you may already have coverage provided in your medical and death and dismemberment policies. Your credit card may even have insurance policies for cancellations made when using the card to purchase your trip, Reeves says.

ďIf youíre not sure [whether] your medical insurance covers you while youíre overseas, and for the activities you plan on doing, ask them ó donít assume. Every provider and every policy may have differences,Ē adds Phil Sylvester, chief content and communications officer of World Nomads, a company that offers insurance plans online, in a June 2016 article in U.S News Travel.

For baggage insurance, Reeves suggests you consider what youíre bringing and whether itís worth the cost.

ďThe U.S. Department of Transportation limits lost baggage claims to $3,300 ó and when airlines do reimburse you, [they] always account for depreciation,Ē reports Reeves. It would make sense, then, to insure your expensive skis or golf clubs, but if youíre traveling light with just some clothes and a pair of shoes, itís probably not worth it.

The same goes for medical and evacuation policies; they probably arenít necessary if youíre traveling to an all-inclusive resort, but if youíre backpacking through the Middle East or planning a jungle bungee-jumping spree, these policies may be worth looking into, Reeves says.

Just be wary of timing and circumstances, adds Travel Editor Liz Weiss in a June 2016 article in U.S. News Travel. Whereas a hurricane is something that canít be predicted and would be covered in your policy, travel insurance policies wonít cover something if it has already been declared, such as the public health emergency report of visiting Zika-affected Brazil.

A simple trip within the country probably doesnít merit insurance, but traveling abroad and spending $5,000 on an all-inclusive resort is a big expense and should definitely be insured, adds Weiss. Even if you have a busy itinerary, it could behoove you to have cancellation insurance if one of the moving parts in your travels goes awry, so you can recover quickly and get back to your planned events.


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