Trip insurance: When is it the right choice?

It’s often a toss-up when booking flight: economize on the non-cancelable/refundable ticket or buy the more expensive cancellable/changeable option, within the airline’s “terms and conditions”.   For big trips, whether under the wing of tour companies or self-organized, the question of trip insurance looms larger; there’s more money at stake and more circumstances beyond one’s control that could give rise to a host of (expensive) travel nightmares. So, trip insurance? Here’s what to consider to make the right choice.

Can I afford the economic loss if I don’t use the ticket?

If you’re going away for a long weekend and the non-refundable (cheapest) airline ticket is, say, $350, will that loss be bearable?  If you are reasonably sure the trip will happen as planned and have the buffer to withstand a potential loss, then the “basic economy” ticket makes sense. Be aware that when the airlines’ rules state “non-changeable/non-refundable” they mean it. You’re stuck.

Otherwise, a more flexible ticket at a higher price may be more prudent.

A note of caution on “trip protection” plans offered by Expedia and other web travel fare aggregators: while the cost is relatively low, the reimbursements are often limited to illness in relation to missing a trip or flight, either entirely or in part.  As always, read the fine print and know the exact scope of the protection benefit.

The good news is that you can generally make an air reservation, either directly with the airline or via an aggregator, and cancel within 24 hours with no penalty.  So you can lock in a fare and double check that the party is on!

Sometimes it’s not the price, it’s the uncertainty

Trip insurance often takes you from stress or relax
It’s often an easy choice

Even a small chance that dates may change is stress-inducing and reason enough to secure a ticket that allows flexibility. It is a form of travel insurance folded into the ticket price, but why not?  It’s worth a few more dollars to spare the anxiety,  not to mention the false economy of dealing with a worthless non-refundable ticket that you might need to re-book anyway.  

Stress-free travel is the goal….your body will thank you.

 What about trip insurance for big travel?

travel items: luggage, hat, laptop, purse, shoes
Necessities of travel might include trip insurance

Again, it’s about what you are willing to risk: a $350 flight is nothing compared to a $5,000 – or more – trip.  Furthermore,  there is often greater uncertainty surrounding big travel plans: things can go astray in the long lead-time between booking and departure.

You know your threshold for such a loss, both financially and emotionally,  but I strongly advocate for trip insurance at least for the longer, more expensive travel. The same for trips with many moving parts: several countries, many transfers, remote locations. The “terms and conditions” for many travel operators, including cruise lines, leave no wiggle room. That’s when travel insurance becomes indispensable.  

We’ve all heard (and hopefully have not experienced) the travel dramas of luggage that went to destination A with the traveler at destination B,  without much more than a toothbrush.  It might make a great story after the fact but you know what makes the story (not to mention the experience) even better? Seeing that $200 check in your mailbox upon return for “trip interruption”.

Yep, it can happen.

In research for this post, I sought out savvy travel consultant Stephanie Rudolph of Yampu Tours about the pro approach to travel insurance.  Her response via email was insightful:

“My rule of thumb is that if you would ensure a ring or any other object of value, then you should look at travel the same way,” she wrote. “It is an investment just like those tangible objects.”

I would add it’s like insuring your house or car; you only need it when you need it.

A word about medical insurance when traveling internationally…

Perhaps you are willing to risk trip cancellation/interruption, loss/delayed baggage and skip insurance on international trips.   You may feel the savings is worth it.

However, if you’re a 3 Score and More traveler, and Medicare is your primary medical coverage, it will not cover your medical care while abroad. 

Medigap plans intended to supplement Medicare, are sparse in their coverage for overseas travel, limiting it to emergency situations.  From the AARP website:

Medigap Plans C, D, F, G, M, and N cover some emergency care outside the United States. After you meet the yearly $250 deductible, this benefit pays 80 percent of the cost of your emergency care during the first 60 days of your trip. There is a $ 50,000-lifetime maximum.”

This is a sobering reality, with potentially expensive implications.

What should I expect to pay?

In my experience,  it’s very important to have a good, solid policy (available via tour operators or on the open market). Expect to pay about 7-10% of the trip cost for a comprehensive plan.  If that seems like a lot, consider the all the unknowns it should cover: medical coverage and evacuation, trip delay/cancellation/interruption,  lost baggage, etc.

At the risk of redundancy, I’ll say again: read the fine print.

Check to make sure the “covered reasons” run from A-Z.  Make sure there is an international number available 24/7. Print out your policy and keep it with you during the trip.

Don’t forget to enjoy!

hat, camera, sunglasses, refreshing drink
With the planning done, it’s time to enjoy!

You’ve planned carefully, you’ve done your due diligence. Now it’s time to relax…  Embrace the adventure!  And here’s to never needing to file a claim!

If you have insights/experiences with travel insurance, please share in the comments section way, way down at the bottom of this post.

Cheers and, Buon Viaggio!


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