To many people, insurance may seem like a waste of money, especially in today’s economic climate where the dollars are hard to spare. And some people get by without insurance – for years even, taking risks with cancelled flights, truncated holidays, stolen cash and even driving cars in foreign places without insurance on themselves or their vehicles. But is it worth the risk?
A common question plaguing the budget traveler fraternity is whether travel insurance is really worth the money. Some people are afraid of being ripped off by insurance companies. Others traveling with family can’t dream of traveling without it, but find it quite expensive. Travel insurance has its pros and cons, and here’s a brief look at why you should or needn’t buy it on your next weekend trip.
Travel insurance is for emergencies. If your flights are cancelled or you miss them, your insurance can help you get your booking costs back. If you lose your baggage, or if the travel company you’ve booked through goes bankrupt, you may be compensated. Be sure to save the original copy of your airline ticket, hotel booking etc. for filing your claim.
If you contract malaria on holiday or have a gall bladder attack while feasting on Peking Duck on your Chinese vacation, your medical insurance policy may not cover you out of network. That is where your travel insurance company can step in to help with your treatment costs. This can greatly lessen your financial load.
Cancelled trips due to natural disasters, bad weather or faults in cruise ships can also be covered by travel insurance. If a tsunami causes your hotel to close or if an earthquake causes flight cancellations, you can find yourself paying out of pocket. But if you have travel insurance, it can help you meet most of the costs, if not all of it.
Many policies will also provide coverage for stolen, lost or damaged luggage, which can otherwise set you back by hundreds of dollars. Consequently, when you’re buying travel insurance, it’s always a good idea to make sure that your luggage is covered in the policy.
However travel insurance can be costly. Despite its benefits, if you have a smooth holiday you will have spent a small fortune on insurance that you won’t need. Sometimes, the price you pay for insurance may not outweigh the cost of your trip. If your trip costs $3000, you spend $150 on travel insurance and then don’t file a claim you’ve already spent 5 percent of your trip budget. If you hadn’t bought the insurance, you could have spent that money on your holiday instead.
As a result, many people don’t find the cost worthwhile, and take a chance with the weather, illness or lost luggage. After all, if you are reasonably healthy with no existing medical conditions, a truncated weekend holiday to California or cancelled flights from Amsterdam will hardly be a financial blow. In fact at times, travel insurance may be completely unnecessary. You may not need it if you’re on a weekend golfing trip to Florida.
Another problem with travel insurance is that it may not cover everything that you need coverage on. The cheapest insurance usually provides the least cover, and it may not make sense to spend a hundred dollars on coverage that can’t protect you when something goes wrong. Therefore it’s important to read the policy carefully and make sure that the particular issues you want coverage for is covered in it. For instance, if you’re carrying expensive equipment on a policy that only covers $500 worth of it you need to look for another policy.
Sometimes, it may make more sense to purchase insurance at lower rates through your credit card company if you’re paying for your holiday with your credit card. If you’re booking through online travel websites, you’ll find that many of them throw up a trip insurance check-box. You can use these, or you can go to other companies online like Allianz Travel Insurance or Travel Guard and get quotes to compare.
The trick is to shop around as you would any other insurance, so you get the best prices and the most coverage.
Therefore when you plan your next holiday, decide whether you can afford to lose the cost of the trip if you have to cut it short at the last minute. Does the policy cover what you need, can you afford the premium or is there anyone in the group or family you are traveling with liable to be sick on your holiday? Ask yourself these questions, and then decide whether you need travel insurance or not.