Emergencies, accidents, and just bad luck can occur when you’re on the road. Is it better to take a chance at a financial wallop or play it safe and invest in travel insurance? Depending on your destination and how much you stand to lose, the answer varies. Here are some questions to ask.
• Isn’t travel insurance just for medical issues?
These days it’s a lot more. Sure, comprehensive travel policies cover medical service and hospitalization, but you’re also covered for trip cancellation, delay or lost luggage.
Dan Margoni, a retired certified financial planner in Durham, N.C., has purchased policies through Allianz Global Assistance (allianztravelinsurance.com) for more than a decade. In 2012, he was returning home from Rome through Dulles International Airport when he got word of Superstorm Sandy. An unexpected hotel night and meals (about $105) was reimbursed. When Margoni’s laptop was stolen at a Buenos Aires bus station, Allianz reimbursed him $500. “Travel insurance doesn’t eliminate the risk but the cost of the risk,” he says.
John Monroe’s summer vacation to St. George Island off the Florida Panhandle was cut short by a tropical storm. “Every summer we rent a house and though we knew the weather was bad, we didn’t realize how bad,” he says. The family checked in on a Saturday. On Sunday morning, boom! The electricity went off and a mandatory evacuation was announced. The island wasn’t reopened for five days.
“We went to Tallahassee and then on to a friend’s house in Georgia,” says Monroe, who not only recouped the cost of the non-refundable home rental, but the night at a Tallahassee hotel.
• Can’t I chance it?
If you are traveling within the United States and aren’t forking over a hefty non-refundable sum, then you probably don’t need travel insurance. But head overseas and, more times than not, the insurance is warranted.
Most of us have some form of health insurance, but your policy may not be worth much outside U.S. borders. Even a trip to a cruise ship’s infirmary can lighten your pocketbook, because once you set sail you’re considered to be in international waters.
In general, medical plans will cover you for emergencies or urgent care regardless of location. What’s an emergency? Anything a prudent person concludes would jeopardize her life if she didn’t seek care. So chest pains, broken bones, or dehydration caused by food poisoning would likely be covered; toothache, sunburn, or a mild case of the flu probably would not.
Medicare won’t cover illness or injury outside the United States. Medigap (plans C and above) provides foreign travel emergency coverage, but with a $50,000 lifetime limit.
• If I cancel my trip, do I get my money back?
The best thing about trip cancellation is that it covers travelers for 100 percent of all prepaid, nonrefundable expenses as long as cancellation is for one of the policy’s listed reasons. That could include sickness or injury of the traveler, a traveling companion, family member and even business partner. It also applies if there is a death in the family.
Many plans will cover you for cancellation if you are required to work during a trip. Be sure you can submit a written statement from human resources confirming that your previously requested time off has been revoked. If you are prevented from taking a trip because you are laid off from your job, you may be covered as well.