A frequent question from Family Travels on a Budget readers is, “Should I invest in travel insurance?” Budget-minded travelers want to keep expenses, especially unnecessary expenses, low. On the other hand, at an average cost of $3,000-$5,000, a family vacation is a significant investment.
- Shopping with my son at H&M on the Champs Èlysèes in Paris last year, we met a young lady from Canada whose luggage never arrived. She was traveling with a group, but only her luggage was lost. Her tour package had required travel insurance, and she was able to replace her clothes. She maintained an upbeat attitude, “At least I can say my wardrobe came from Paris!”
- My dad, on a weekend getaway at the beach in his home state, became very ill and was hospitalized for six days. My parents did not have travel insurance, but traveling in the off-season, their hotel offered a larger room at a significant discount to make my mom’s stay more comfortable. His hospital stay and surgery were covered by his medical insurance.
- Superstorm Sandy shut down much of the east coast. Many NYC restaurants were without power for days. The New Jersey shore, much of it obliterated, is still in the process of cleaning up. Tourism won’t return to normal there for a long time.
Travel insurance protects against problems like lost luggage, illness and travel interruption (from weather or any reason). Though I travel often, I confess I have never purchased travel insurance. Our family is young and healthy. We usually drive. And, we rely on carry-on luggage for most of our air travel. Our risk of need for travel insurance is low, so we’ve never purchased it.
Why purchase travel insurance?
Vacations are a major investment and travel insurance is inexpensive, usually less than $200 for a vacation. If a flight is canceled, it covers resulting travel expenses such as a night at the airport hotel. Travel insurance covers replacement costs for lost luggage and its contents. Most importantly, it provides medical assistance and emergency evacuation, important when traveling overseas. Though most vacations go smoothly, the cost of a vacation gone wrong is high. Travel insurance protects against that loss.
Read this article by Nomadic Matt that provides more information on why to purchase travel insurance. (I do not endorse his recommended travel insurance provider, since I’ve not used it. Research travel insurance options just like you’d research any other insurance purchase.)
Should I always get travel insurance?
Each family must decide whether to purchase travel insurance. Factors to consider include:
- How long is the trip? Longer trips mean more time for things to go wrong.
- How complicated is the trip? A weekend getaway to the beach a three hour drive from home is low risk. A flight overseas followed by a trip that includes time spent in multiple cities and transportation to those places during winter is far more complicated.
- How healthy are the travelers? (And does medical insurance cover medical costs wherever you’re traveling?)
- How great is the investment? A quick weekend to the big city is probably not a budget busting trip. A twelve night African safari is a far greater investment and might be worth insuring.
- What season is it? Winter travel is more often disrupted than summer travel, though travel to the Caribbean from mid-summer to November can be affected by hurricanes.
- What other coverage do you have? Some credit card companies offer protection to card-holders.
- Where are you going? Some countries or regions are more likely to have disrupted travel than others.
Probably the best thing to consider is whether the cost of travel insurance is worth the peace of mind it gives.
NOTE: Travel insurance policies vary by company and destination. Do not purchase travel insurance based on this article — be sure to read your policy carefully to determine that it meets your needs.
Weigh in: Do you purchase travel insurance? When? Why? (Or why not?)
This post was updated to provide more current information on 1/22/2013.