From new models for car insurance to pet coverage, there are countless of types of insurance out there and it's not easy to keep track of which options are actually worth spending money on. In the case of travel insurance, the perk is that you just pay once for it instead of committing to a contract and making ongoing monthly payments. The downside of travel insurance is that like other insurance, you will mostly likely pay money for nothing, as you probably won't use it.
There are two major types of travel insurance: national and international. As the international one also covers medical expensive, this one is generally more expensive. According to the Insurance Information Institute, a typical international travel insurance package will include trip cancellation, travel delay, lost or delayed baggage, medical, dental, emergency evacuation, 24-hour traveler assistance, and accidental death, with some policies including rental car collision and damage coverage. Accordingly, the cost of travel insurance generally ranges from 5% to 7% of the price of the trip.
Consumer reports advise consumers not to buy policies from travel agents as they will most likely charge commissions from the sale of high-priced policies. The recommend an online broker such as InsureMyTrip and they also suggest the consumer should the insurer for a sample copy of the policy. Equally important, you should ask whether all of your particular concerns are covered and ask the representative to locate them for you in the fine print.
Study abroad students or professionals traveling for work can often receive travel insurance through their school or company, and organisations such as USAA, AAA or AARP can offer discounted insurance policies. Check the insurance exclusions and limitations because even at a discounted price, travel coverage may not be worth the cost. For instance, NerdWallet states that stolen baggage isn't covered if you've been “negligent” with it, mental health is frequently excluded, and you can lose coverage after having just one alcoholic drink. Therefore, even in the rare case that you might need the travel insurance, they might find those loopholes in the contract where they can get away with not covering you. Therefore, you invested for nothing.
Director of insurance at the Consumer Federation of America, Bob Hunter, says travel insurance is often not worth the price. “Don't buy insurance that covers small, manageable losses or only a slice of risk,” he explained. Consumer protection laws, in some cases, may help you if you are traveling without insurance or have gaps in coverage.
Here are some more reasons you might not need to buy travel insurance after all.
You are already covered by a different insurance policy. Travel insurance usually overlaps with other policies you have in motion already, such as homeowners, auto, life or health insurance.
You're already covered by your credit card: check the services provided by Visa Signature, World MasterCard, American Express and Discover Escape.
Medical travel insurance is all you need. If you are travelling abroad and your health insurance doesn't cover you, this might be useful so you can get some peace of mind. Just make sure you check the details of your coverage before you travel as Consumer Reports warns that with travel medical insurance, pre-existing conditions may be excluded.
All you want is life insurance. Some people get travel insurance because they are afraid of dying in a airplane travel but if that is the case, this might not be the best deal. “If you're worried about dying in a plane crash,” Hunter explained, “you should get term life insurance rather than flight insurance, because you might die in a car crash.”
You're only worried about lost bags. Consumer Reports advise not to purchase travel insurance just for small losses since it's not worth the high price of travel insurance premium. In some cases, the airline will compensate travelers for lost or damaged bags.