Is travel insurance worth it?

We’re asked that question almost everyday and the answer I always provide is “yes, but it depends on what you are most concerned about and your own tolerance for financial risk”.

One of the most popular types of travel insurance is trip cancellation coverage – coverage that is designed to reimburse a traveler in the event they have to cancel their trip due to one of the covered reasons listed in the policy.  This coverage is only sold as part of a package of travel insurance and is not available by itself.  It also is probably the most expensive components found in a travel insurance package.

Travel (including trip or cruise) insurance is just like any other insurance product – it replaces a small know loss, the premium, for the guarantee that you will be reimbursed for an unforeseen, insurable loss which is usually much larger, the benefit.  Most consumer advocates recommend only insuring those potential losses which might be financially painful or impossible to endure.  So for the $200 airline ticket toFloridayou probably would want to save your money however, the once in a lifetime cruise for $15,000 you might want to buy insurance.

In addition two of the highest areas of potential loss must be considered; medical expenses and emergency medical evacuation expense.  Many health insurance plans reduce or eliminate coverage outside your coverage area and Medicare doesn’t provide coverage outside the USA except in extremely limited circumstances.  Travel insurance can help augment or supplant your own coverage.  That’s especially true for emergency medical evacuation coverage where a worse case scenario for a private air evacuation from Europe to the east coast of theUSAcould easily exceed $100,000.  Add to this the fact that emergency medical evacuation coverage is usually only found in travel insurance policies.

So the best advice we can give is for the traveler to evaluate their financial risks first and then talk with a travel insurance expert to determine whether or not insurance is advisable and which plan is the best fit for their trip.

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