The great travel insurance debate continues

One of the top three questions readers ask is, “Should we get travel insurance?” Spending money on insurance when it could be used for the vacation itself makes this expenditure a tough choice. Of course, for people over 65, travel insurance plans make more sense due to chronic illnesses that can interrupt travel and the increased risk of injury from falls.

For families, though, is travel insurance worth it?

When I first started this site, I didn’t purchase travel insurance and I really didn’t recommend it. A lot has happened these past two years to change my mind.

On a cruise last November, one of the passengers got violently ill and had to be transported to a hospital in Nassau. United States health insurance plans don’t always cover expenses out of country. Even if medical insurance covers the illness, it won’t cover the cost of hotel expenses for family members or transportation back to the United States.

Sadly, on a cruise in January, one of the other passengers died. We want to think we’re invincible. We certainly don’t want to imagine we could die on vacation, but (sorry — just being honest) it happens. Sometimes to younger people. As I write this, a dear lady I know is preparing to bury her oldest son — who died suddenly of a heart attack two days ago. Your health, homeowners, and automobile insurance will not cover expenses to transport a loved one back to the United States. International shipping of a loved one currently costs at least $3840 plus the cost of a ticket.

Those are worst case situations, of course. Serious illness, injury or death on vacation is both emotionally and financially devastating. For international travel, I was convinced a while ago to invest in travel insurance.

Do I need travel insurance for domestic travel?

Beyond illness and injury, weather and other travel interruptions (canceled flights anybody) can seriously impact a vacation. Travel insurance protects against such interruptions. If weather interrupts your vacation like Hurricane Arthur did over the July 4th holiday when the Outer Banks of North Carolina faced mandatory evacuations, you can recoup losses. If your flight is canceled or travel is interrupted, travel insurance covers expenses that the airlines won’t, including reimbursement for days lost.

Airlines these days are good at losing luggage, often permanently! If flying and checking luggage (especially if you have connecting flights), travel insurance will reimburse you for clothing and personal items you need to replace. On our Paris trip, we met a young lady buying a whole new wardrobe on the Champs Elysees. Can you imagine taking a whole new wardrobe home from Paris? (Of course, there were limits on how much she could buy… but still!)

Do you need travel insurance for domestic travel? That’s a judgment call only you can make.

Weigh the factors for yourself:

1. What risk am I willing to take with the financial investment in this vacation? (If our travel is interrupted, am I willing to let go of the money invested?)
2. Does the area I’m visiting tend to be impacted by serious weather during the time I’m traveling (east and southern coasts during hurricane season)?
3. Do I tend to run late (which means I might well miss a flight)?
4. What are the ages and general health of the travelers in your group?
5. Does your car, if taking a road trip, run reliably?

Understand what travel insurance does NOT cover

Travel insurance will help you recoup losses if weather, death or sudden traumatic injury interferes with your travel plans. However, it doesn’t cover everything, as the good people over at NBC news point out.

1. Trip interruption for acts of war.
2. Preexisting medical conditions.
3. Luggage lost for less than 24 hours — and only on outbound flights.
4. Death or illness of a pet  — whether the pet gets sick at home or is with you on vacation.
5. Loss of keys, money, tickets, or credit cards. These are considered valuables which you should keep on your person at all times. To be fair, from the insurance side of things, how could anyone definitively prove or disprove a loss of cash anyway?
6. Injuries obtained on a sporting adventure, including things like whitewater rafting, paragliding and zip lining. To protect your safety in these situations, travel with reputable companies.
7. Pregnancy complications or childbirth are generally excluded — so read the fine print carefully if traveling while pregnant.
8. Emotional illness or mental breakdown.
9. Travel interruption because your spouse files for divorce. Like #5 this could be easily abused… We don’t want to take the trip, so let’s file for divorce. We can withdraw after funds are reimbursed. Well, you get the idea.
10. Your tour operator cancels on you. Travel insurance is designed to protect you when you must cancel a trip, not the other way around. When booking travel, work with reputable companies who offer full reimbursement if they must cancel. Otherwise, you’ll be out of luck if they go belly up.

Alternatives to travel insurance

When I travel internationally, I will get travel insurance — even if I’m cruising. But, traveling domestically, I consider whether my reservations (airfare, hotel, etc) are refundable if canceled. I look at the benefits my credit card company provides if travel is interrupted (all cards are different, so look at the benefits your card offers before you travel). Also, for longer trips, I contact my health insurance to learn coverage in a particular area (they are great at recommending things ahead of time, just in case).

So there you have it — I still haven’t given an absolute answer. Sorry about that — it’s just not that cut and dry. I do hope these guidelines help, though!

Tell me — what do you think about travel insurance? Worth it or not?