If you’ve bought a plane ticket or other travel online recently, you’ve probably been invited to click one button and buy travel insurance to cover that purchase.
You may have wondered, “Should I buy it?”
My advice is: No. Don’t buy with that one click. But do invest in a comprehensive insurance policy from a trusted company.
Yes, insurance is going to increase the price of your travels slightly — an average of 4 percent to 8 percent — but it also protects your investment in case of problems, and it could even save your life.
In an era when it’s easy to spend thousands of dollars on an average trip, you should really just spend a small amount to protect it.
I became a true believer several years ago, when I broke my foot weeks before we were supposed to leave for a vacation in Argentina.
I’d already plunked down $5,000 or so in plane tickets for myself and my two kids to get to South America and then travel inside the country on a local airline. I couldn’t really see any way I could hobble around on a broken foot, while hauling two children.
Fortunately for me — and sadly for others — Mexicana Airlines picked that very moment to go bankrupt. I was lucky because I immediately protested the money I’d spent on my plane tickets to American Express, since I used their credit card to buy them. American Express decided to refund my money and charge back Mexicana, so I was lucky to get that money back.
Then, I contacted Orbitz, through whom I’d purchased my flights inside Argentina. They interceded with the carrier on my behalf and I did end up getting my money back.
However, the long, time-consuming process of dealing with all that led to a big “Come to Jesus” moment for me. And I started buying travel insurance for every trip.
Later, on another trip, I had to use my insurance when my son became ill just before our travels. Even though he wasn’t coming along, being he was a member of my immediate family I was covered for his illness. And I was able to cancel and be reimbursed for the entire cost of our trip.
On that particular trip, I’d bought insurance through Travel Guard and I must say they were extremely helpful, the claim was easy to file and I very promptly got a check from them with no hassles.
Here are 10 things to know about buying travel insurance:
• Comparison websites such as InsureMyTrip.com and SquareMouth.com allow you to compare the offerings of different companies. When you look at the number of “stars” based on consumer reviews, look for reviews where the person actually had to file a claim. Everyone loves their coverage until they actually need it.
• Insurance cost is based on the cost of your trip and the number and age of the people traveling. As mentioned earlier, it can range from 4 percent to 8 percent of the cost depending on the plan. Remember when I mentioned the one-click impulse purchase? I recently bought a ticket on JetBlue for $218. I was offered the chance to buy a policy with one click for $22.75. That’s more than 10 percent for a policy that you haven’t even reviewed.
• Choose a company that will provide you 24/7 immediate phone assistance in case of emergency.
• If you are counting on travel insurance provided by a credit card, I’d do some research ahead of time and make sure you feel confident you’re fully covered.
• Buy your insurance as soon as you’ve spent money — for plane tickets, for a deposit, etc. That way, you’re insured from the beginning. It doesn’t get cheaper if you wait, and you may lose coverage.
• If you’re traveling to the tropics during hurricane season, make sure you’re insured.
• If you’re just flying domestically within a short period of time, you probably don’t need coverage.
• Your children under 18 are generally included in your coverage.
• Bring a copy of the policy with you on your trip, preferably not in your checked luggage.
• You may be able to buy an annual policy if you plan on taking multiple trips.
Here are some considerations to take into account when you buy travel insurance:
Trip protection. This protects the financial investment you made in your trip by reimbursing you for non-refundable prepayments in the event of last-minute cancellations: unavoidable delays due to certain events such as terrorist incidents, strikes, bankruptcy of your carrier, serious illness of yourself or family members, jury duty and the like. Different insurance companies take varying stances toward some events, so it’s important to read the fine print.
You can buy additional coverage such as “cancel for work reasons,” which will reimburse you if you’re required to stay and work, or you lose your job.
Nowadays, I nearly always buy “Cancel for any reason” insurance, which reimburses you half to most of your payments if you cancel for any reason at all. It costs more, but I like having the peace of mind.
This can come in handy when an insurer wouldn’t otherwise pay up, for example in case of civil unrest that makes you nervous about going to an area but it’s not a covered disaster. For example, many people canceled trips to Egypt during the riots in Cairo, but they didn’t get their money back because rioting wasn’t covered.
Note that “Cancel for any reason” insurance generally has to be bought within two weeks after the first payment for your trip. To find policies that offer this option, search on a drop-down menu for types of policies.
Medical expenses. This covers you in a foreign country if you need emergency care from a doctor or dentist. You may have to pay a deductible. Some policies allow you to choose your own hospital, some send you to their preferred provider. There may be a pre-existing condition clause where you need to pay extra for coverage.
Medical evacuation. I just bought this for our trip to Copper Canyon in Mexico’s remote Sierra Madre mountains. It pays for you to be evacuated by whatever means necessary and available, including a chartered plane, to receive proper emergency medical care. If you’re going somewhere remote — like on safari — this is a good idea. Some policies will just evacuate you to the nearest big hospital, others will pay for your return to the U.S. Note that it can cost $500,000 for a medical evacuation.
Sports and hazardous activities. If you'll be engaging in certain activities, you'll need to pay extra for a medical rider. For example, we were going to be ziplining in Mexico, so I had to shell out $11 more for it to be covered medically in case we wiped out. If it’s even somewhat dangerous — skiing, diving, skateboarding, river rafting and rugby immediately come to mind, but there are many — you may have to buy a rider. Listening to my children’s bad jokes, though, is covered already.
Repatriation. If you or someone in your party dies during the trip, this would pay for your remains to be returned home. It also would likely pay for someone to accompany the remains.
Baggage loss. Airlines will pay you a limited amount if they lose your bags, but your luggage could be lost or stolen under other conditions as well. This covers these situations.
Accidental death and dismemberment. This is pretty self-explanatory. Read the rules on the applicable policy.
Missed connections and travel delays. This is coverage in addition to whatever an airline would do for you. If you wreck your car on the way to the airport, you’re covered. If your alarm clock doesn’t go off, you’re not. This can be useful if your flight is delayed and your ship leaves without you, your passport is stolen, weather forces you to miss connections and the like.