Do You Need Travel Insurance?

Considering the Pros and Cons

Travel insurance is big business, and many travel agents push it aggressively. At first blush, it might seem like a good idea to insure your vacation. After all, you can easily spend $3,000 to $4,000 on a vacation that lasts just a week or two. Insuring yourself against the cancellation of that trip might seem like a wise decision.

It is important, however, to weigh the potential benefits you would derive from collecting on that travel insurance policy against the costs. Those costs can be quite high - often as much as $200 to $400 for a trip that costs $1,000. That is a pretty hefty sum, and just one of the reasons travel insurance is not always the great deal it seems to be.

When evaluating any type of insurance, it is a good idea to look at the whole reason for buying insurance in the first place. You buy health insurance to protect yourself and your family from financial ruin if you get sick. You buy car insurance to limit your liability in the event of an accident.

Now think about how travel insurance fits into that scenario. Cancelling your trip might be upsetting, and a bit expensive, but it will not lead to financial ruin. If the worst case scenario plays out and you cannot go on your long-planned vacation, the most you can lose is the money you have already spent. That might be unfortunate, but it is hardly justification for buying an expensive insurance product.

Travel insurance can make sense if you are traveling to a remote or third world location. Just make sure the travel insurance covers the cost of getting you to a medical facility in your home country. If you need to be airlifted out of a remote wilderness area or treated for a tropical disease, the availability of quality travel insurance can protect you financially.

It might also make sense to carry travel insurance if a large part of your trip is nonrefundable. If you simply need to change your dates of travel, you can get your tickets reissued for a fee. If the tickets you bought cannot be exchanged, however, travel insurance can give you some peace of mind.

No matter what type of trip you are taking, it is important to delve into the details of any travel insurance policy you are considering. Read the fine print carefully, and find out exactly what is and is not covered. Many travel insurance policies kick in if you have to cancel your trip or cut it short due to a family emergency. Make sure you are completely clear on what that means and what types of situations would be covered.

You can find travel policies that allow you to cancel for any reason, but those policies are quite expensive. You can easily pay up to half the cost of the trip for that kind of coverage. In most cases, it simply will not be worth the extra cost.

The most important thing to look at in a travel insurance policy is medical coverage. The best justification for buying travel insurance is to protect you against unexpected expenses, and medical expenses are the most likely. If you get sick and have to be treated outside the country, chances are your health insurance will not pay the bill. Travel insurance with a medical provision can cover those expenses, or even pay to fly you home for treatment.

Be sure to read the fine print carefully and look for any exclusions that might apply. You do not want any last minute surprises when you are dealing with your health - and the health of your wallet.

If you do decide that travel insurance is right for you, it is important to review your policy options carefully before you pick a plan. Coverage can vary widely, and getting the best policy for your money means becoming an informed consumer.