I’ll be upfront that I’m not a fan of travel insurance, period. I used to think that if you buy travel insurance, you are basically flushing money down the drain. In truth, I think it is still true as most people go on trips without major incidents. The premium that you pay towards a travel insurance could have gone towards trip expenses. Given this stance, it may seemed contradictory to share that I often get travel insurance for international trips.
What changed my mind?
Some years ago, I was traveling abroad when a health issue cropped up with a traveling companion. It was significant enough that it disrupted the rest of the itinerary, and we needed to head back to the states as soon as possible. Our onward flights had to be cancelled. Financial losses were taken in the form of non-refundable hotel rooms, change fees, and the premium costs of buying last minute tickets. It was a bit of an ugly mess, but it made me realize one thing:
Nobody wants to think about the worst case scenario when they plan for travel.
It’s understandable. Who wants to think about what could go wrong when you’re excitedly planning for a trip? Like missing a connecting flight, or somebody getting seriously ill, or an accident resulting in bodily injuries or even death?
Yet, the reality is that these things happen. Just like car or home insurance, you don’t want to pay the premiums but you are glad to have purchased insurance if and when you need coverage. Travel insurance is the same way. In the past, I simply travel with the hopes that the trip would go smoothly. At best, I was hedging the risks. At worst, I was ignoring the potential of things going awry. They are both a little naive, but things worked out for the most part.
Figure out your travel insurance needs
I am far more proactive when it comes to travel insurance these days. For me, I’m less concerned about travel specific coverage as most credit cards offer basic travel related coverage. What matters more to me is the health and well-being of the people I travel with, so I generally focus on getting primary medical coverage when I travel abroad.
I emphasized “traveling abroad” because the medical coverage is typically a non-issue when traveling domestically. If traveling internationally, I’d rather not deal the ambiguity of whether some medical expenses are covered — not only in terms of doctor’s visits but also medical transport should the need arise. After all, the cost of medical expenses is frightening — who can reasonably afford medical care without health insurance these days? (And this is coming from someone who used to work in the healthcare industry).
Where to look for travel insurance
I always start my travel insurance search on insuremytrip.com (note: I have no affiliation with them whatsoever). The website is a travel insurance consolidator of sorts, so I find it easy to search on the site and filter the results with side-by-side plan comparisons. I generally go with the plan that provides the “best value”, which means a reputable company that provides the desired coverage and competitive pricing.
Is travel insurance a good investment?
Generally speaking, I don’t consider travel insurance to be an “investment” at all. I see it more as a sunk cost. However, just like all other insurance offerings, it’s a form of risk management. You can never really predict when something happens — sometimes a perfectly healthy person could fall ill when you least expect it. People have various comfort levels around risks, and for me, I’d rather that there is some risk management in place than none at all. In that way, I tend to see travel insurance as part of the “built-in” cost of traveling internationally.
Do you usually buy travel insurance when you travel abroad? Have you ever had to make use of the travel insurance and is it an easy process? Or did you ever had an experience when you did not purchase travel insurance but wished you did?
God is surely watching. Just as I wrote this I got a call from AIA asking me to rate the agent who sold me this (and several other policies)!
Mr HappyFlyer, you pipped me to the post. I was just about to write on this! You are forgiven though as you have taught me a lot. In general my experience with insurance is negative. The agents we meet seem superb salespeople and I often end up buying things I didn’t intent to. I recently bought a one year multiple trip policy for my family (2 adults, 2 kids) from AIA for U$700. One thing to look out for before paying is to look at the exclusions and the process. For example, if I am abroad and need help, I have to call Singapore where I live. With roaming, that might cost a lot.
I’m a gal so that makes me a Ms HappyFlyer. 😉 Thanks for sharing your experience. I agree that it’s important to do your due diligence, as there are tons of exclusions on policies. This is why I personally prefer to look on a comparison site to quickly compare options and read up on the fine prints (without the pressure of the sales pitch!)
I recently applied for the Chase Sapphire Reserve card, and I was pleasantly surprised to find that it includes excellent travel insurance. Trip delay and cancellation/interruption, baggage loss or delay, car rental, emergency medical and dental, emergency evacuation, etc. I think this card is worth keeping for this benefit alone.
I don’t have the Chase Sapphire Reserve card, but I was able to pull up a list of its benefits here: https://www.chase.com/card-benefits/sapphirereserve/travel. The travel interruption, baggage, car rental, travel accident coverage are fairly standard in terms of travel benefits. However, the emergency medical/dental and evacuation aren’t as common, so that’s definitely a new perk (and I hope other cards follow). I actually didn’t even realize that they offer the added benefits, so thanks for pointing it out!
Granted, I’d probably get higher coverage than the card’s max medical coverage of $2,500, but it should cover the run-of-the mill office visits. 🙂
I never did, until I should have. A month long family trip to Europe we had been planning and for a year was cancelled just 4 days before due to a family emergency. Some parts were able to be reimbursed but we still lost close to $6K. After that experience I don’t mind at all an extra $100 or so to know that won’t happen again. I usually use squaremouth.com to look at a variety of options.
Thanks for sharing, and I’m sorry for hear that your family trip got cancelled. The loss of the vacation and the cost from unexpected cancellation really stings. Travel insurance isn’t something most people care to think about until it happens to them, which is why I wanted to cover this topic. Thanks for sharing the above resource. I’ve not heard of the site before, but I’m putting it on my list for when I’m shopping for travel insurance – thanks!
Hopefully, you were (or will be) able to make up that trip to Europe!
Yes, I “triple-insured” a recent trip to Tonga. I used an award ticket, paid a few dollars for insurance on that, purchased year-long travel insurance from a major company (for 5 upcoming international trips), and used a credit card with trip delay/trip interruption insurance. As I got stranded on an outer island of Tonga, I missed my award ticket flight back to the U.S. As the next award ticket flight was more than three weeks off (even after negotiation with the airlines), I had to buy a business class ticket back. My out-of-pocket expenses were nearly $5K. I’m still negotiating with two of the the three insurance companies (after more than a month back) and probably will not get all of my expenses reimbursed but hope for at least around half. The major expense was my return ticket which was capped at $2.5K by one of the companies and not reimbursable at all by the others. I suppose I was very luck and didn’t need emergency evacuation or medical bills and will at least get something more than my premium back. The “free” insurance from my credit card had lots of fine print and I’m not sure what if anything they will pay, they were very challenging to deal with. The insurance with the airline ticket paid a pittance (additional accommodation/expenses limited to $150/night and nothing else), but they were very quick. While the major insurance company was very helpful on the phone (they spent nearly an hour trying unsuccessfully helping rearrange my travel plans), they have yet to respond about the status of my claim a month after they got all the info they needed. So, my recommendation is to figure out exactly what sort of insurance you need and make sure you are getting it.
You actually have an interesting use case, as I always wonder about how travel insurance associated with a credit would treat an “award” ticket. Most T&C have disclaimers that the trip must be purchased on the card, so if taxes and fees are paid, does that constitute that the requirements have been met?
I never had a need to file for travel insurance claim (and hope I never have to), but I’ve definitely read a mix of anecdotal experiences about how that can go smoothly, or it can be a less-than-pleasant experience to go through the process and wait for the reimbursement. It seems your may be the latter.
Thanks for sharing and good luck!
When it’s all sorted out, I’ll try to share my story. But yes, my credit card did indeed state that it would cover some portion of the travel since some of the points used for the award ticket came from the card and the taxes and fees were paid by the card — per the fine print that came along with the card. Interestingly, the trip delay and trip interruption portions of the credit card-based insurance get handled by different insurance companies.