Travel Insurance: When Do You Need It?


Is travel insurance worth it? It's always worth considering.

Whether you're planning an international business trip or heading to a family reunion, buying travel insurance can be tricky. Comprehensive travel insurance plans, which you can buy from an insurance company, cruise line, travel agent, car-rental company, airline or tour operator, can include coverage for cancelations, medical costs, lost luggage, emergency evacuations and your travel provider going out of business.

Whether you need travel insurance or not depends on where you are going, how long you’ll be traveling and how much you’re paying to travel. It also depends on how much, or how little, trip insurance—including medical—you may already be getting through credit cards or other means.

“While credit cards offer many benefits, travelers may have a false sense of security, believing they are protected from a variety of situations when they actually aren’t,’’ says Ed Walker, president of the U.S. Travel Insurance Association, a Washington, D.C.-based trade group.

A study commissioned by the association in 2007 reported that 85% of credit cards don’t include trip cancelation coverage, a standard feature of comprehensive travel insurance plans.

That coverage can be important, especially now.

What if your tour operator, cruise line or airline goes out of business? In the current economic heavy weather, it can happen. Remember, last year Aloha Airlines, ATA and Skybus all vanished in a five-day free fall, scrambling the travel plans of tens of thousands of people.

Putting a Price on Peace of Mind
Buying travel insurance can’t stop a business from liquidating—or canceling your flight or losing your luggage, for that matter—but it can increase your compensation if any of those things happens, and it can give you some peace of mind in turbulent times.

It may be worth your while to buy travel insurance for medical coverage, especially if you are traveling internationally. HMOs often don’t cover medical costs incurred outside the U.S. by American travelers; nor does Medicare.  Medical costs can escalate breathtakingly fast, especially if emergency evacuation becomes necessary. Comprehensive travel insurance plans include medical evacuation costs, co-pays and deductibles, as well as hotels and air fare if you need to return home early.

That’s not to say travel insurance is needed for every trip. It’s not.

When You Might Skip Insurance
Say you're laying out $79 to fly United from Denver to Las Vegas, you’re not checking any bags and you plan to return home two days later, after trying your luck in the casinos. You aren’t spending much money for your air, you aren’t going far, you aren’t away from home long, you’re traveling entirely within a developed country, and since you’re carrying it all on, you’re not checking bags that could be lost, damaged or stolen. You may need a lot of luck playing Vegas, but you don’t need travel insurance.

Travel insurance becomes desirable when you have a more complex itinerary. Say you’re traveling through unevenly developed Southeast Asia, you’re planning to be away from home for a month, you’re paying big bucks and you’re taking lots of gear you'll have to check for your flights. Now you may well need that travel insurance gives you.

Prices, types of travel insurance and incidents covered vary widely. It pays to read the fine print. Travel insurance policies generally cost 4 to 7% of a pre-paid trip; seniors may have to pay more.

If you decide to buy travel insurance, consult a travel agent or make full use of Internet tools. A cluster of commercial online outlets provides real-time price information, allowing you to compare packages from among several hundred vendors. Leading sources include,, and

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