Travel Insurance: What You Need to Know

In the year that I have been back in the travel industry, I have heard many accounts of people needing insurance for their trips. Many of these experiences are based on health reasons, but not all. When we were in France last year on a tour, one couple had flown from Spain to France. Unfortunately, their luggage did not. The wife’s luggage was found, but it missed us at almost every stop. We were heading south and if the luggage did not reach us, it was sent back to Paris. Eventually, the luggage was sent back to the states and she retrieved it there. As far as I know, the husband’s luggage is still undiscovered.

In this case, insurance would have paid for them to purchase new clothes instead of wearing the same clothes, washing nightly in the sink, for two weeks. They did break down and purchase a few things after it was obvious that the luggage was not coming.

Not everyone may need insurance, it is up to you, as the consumer, to decide how much financial risk you are willing to carry.

My uncle rented a car recently. It was a full-sized car for 19.99/day. However, when he went to rent the car they sold him insurance. The argument was that if the car was damaged, he would have to pay the rental fee, until the car came back from being repaired. This $100 insurance may or may not have been necessary, but my uncle did not know what his insurance covered, so he bought it.

It can save you hundreds of dollars if you know exactly what your insurance covers before traveling.

My parents are taking two trips this year. The first is a tour of the Southwest Canyons of the United States and the second is a tour of Ireland. Both of these destinations are low-risk, safe places, with the costs being similar as well. However, they purchased trip insurance for the international destination. The reasoning is that most US medical insurance companies will not cover costs associated with medical treatment outside of the  US. Both of my parents are in good health, but they are over 70. Unexpected illness or injury could end up costing them a lot of money while traveling abroad. It also gives them peace of mind to have additional coverage.

My husband and I have always looked at insurance of any kind in this way. Can we assume the loss of our investment if we have to cancel? Can we assume the financial risk of a hospital stay in a foreign country? Can we assume the financial risk of replacing a car or paying for damages if we are in an accident that is our fault, while driving on the left side of the British roads?

If you have a net worth of over a million dollars, you may not need insurance. In some cases, your current insurance may cover your needs. In many cases, the purchase of additional trip or car insurance is worth the financial safety-net that it provides.

When looking at insurance, be sure to read the fine print. Understand what your coverage is and is not. Explore and compare the different levels of insurance. Will the basic plan cover you or do you need to upgrade to the gold or premium plan? Research and know exactly what your insurance already covers before you leave.

Your personal travel advisor, can help you to sort out and answer many of these questions, so that your next destination experience not leave you stranded financially.