When To Consider Travel Insurance (and when NOT to!)

Four reasons to purchase travel insurance…and four reasons not to.

We all know we need health insurance, auto insurance, and homeowners insurance to help protect us financially. But what about travel insurance? Just because you’re on vacation doesn’t mean life takes one, too. There are times when it makes sense to purchase travel insurance, which typically costs between 4 percent and 8 percent of your total trip cost. And there are times when it doesn’t.

When to consider purchasing travel insurance

• You’re prepaying for reservations, or booking stays at higher-end hotels. Should your trip get cancelled or delayed, you could be out quite a bit of money if you’re already financially on the hook for guided tours, hotel stays, local transportation or tourist attractions.
• You’re traveling during weather-volatile seasons. While it’s impossible to predict Mother Nature, she does have a few patterns that could put your travel plans in peril. That winter ski trip to the Tetons or that trip to the Bahamas during hurricane season could end up being delayed or cancelled due to weather.
• Your medical insurance doesn’t follow you. Even healthy travelers could find themselves in need of medical care—or emergency medical evacuation—at some point or another. Check your current medical policy to know whether your benefits travel with you and what those benefits cover, especially in foreign countries.
• You travel with all your gear. Taking your smartphone, laptop, tablet, iPod and other electronic devices with you? What happens if your luggage gets lost or your room gets ransacked? Travel insurance could help soften the financial blow, but first check to see if your homeowners insurance or the credit card you used to purchase those items covers damage or theft of your personal possessions when traveling.

When you likely don’t need travel insurance

• You’re not booking (or paying for) hotel reservations or tourist attractions in advance. If you’re the type of traveler who wanders into whichever hotel strikes your fancy as you see it, or pays for a museum pass once you’re at the front door, then you likely won’t be out a lot of money (beyond your airfare) should your trip get cancelled.
• You’re not traveling with any valuables. If you leave your expensive jewelry, clothes, gadgets and luggage at home, then you likely don’t need additional insurance—especially if you travel as suggested above, without prepaid reservations or plans.
• You already have insurance. If your medical insurance travels with you, or your homeowners insurance covers your personal possessions when traveling, you may have all the insurance coverage you need. Be sure you fully understand what is covered, and whether you’re prepared to pay for any costs above your allowable benefits.
• You have a high tolerance for risk. We purchase insurance to reduce our financial risk in the event the unforeseen should occur. Some people simply sleep better knowing that they have insurance coverage for their travels. And some people don’t need to give insurance coverage another thought—although you should still take the time to weigh the pros and cons of purchasing travel insurance.

Before you decide (or decide not) to purchase, be sure you understand what travel insurance covers and take a look at various policy options to see if one is right for you.  

This article contains general information. Individual situations are unique.

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