About a year ago, I traveled to Japan and Indonesia. It was the trip of a lifetime. Even though I have lived in three countries and traveled to many more, I still get nervous about the risk involved in such a major trip. I’m not worried that something awful is going to happen. Instead, I am worried about recovering the cost if something goes wrong. If I get sick, or if if a flight gets cancelled, or if any of a million other things happens I might lose a lot of money. I prefer to budget that up front, so I buy travel insurance. Today, I want to talk about some of the things to look for when buying travel insurance. I also want to talk about whether to buy insurance directly from the company with which you are travelling.
I have had several conversations with the folks at Reviews.com, and they have a particularly useful page on travel insurance. In particular, they lay out a graphic which helps you consider multiple plans side by side. Obviously, you should ask about cost with any travel insurance plan. However, you should also ask:
- Does the plan cover everyone with whom I am travelling, or do they need separate plans?
- What happens if I need medical assistance? Some plans cover evacuation, some cover local medical care, and some do not cover those expenses.
- What reasons does the policy allow for cancelling a trip?
There are, of course, a number of other important questions. However, these questions are an excellent starting place. My rule of thumb: Something will eventually go wrong on one of my trips. I prefer to pay for that in advance by buying travel insurance.
The biggest thing to figure out with travel insurance is who to buy it from. There are at least two major options to consider. The first possibility is using one of the major travel insurance providers that reviews.com covers. This can be a strong option. If you know you have several trips, this might even allow you to cover all of them with one policy. The second option is buying insurance from the company with which you are travelling. Every time you buy an airline ticket, you have the option of buying travel insurance directly from them. This offers one major benefit– it is incredibly convenient. However, this option will very often be more expensive. You don’t have the option of comparison shopping providers, and that can get expensive in a hurry.
The other problem with buying insurance directly from the airline is that it is ultimately provided by a third-party insurer most of the time. That means that however easy it is to buy, once you need to make a claim you will still be dealing with an external vendor. For my money, that means it is better to go ahead and comparison shop to save money. Since there will be hassle when I need to collect, I might as well save money.
Cruise insurance, on the other hand, is a little bit different. You can certainly buy insurance from a third party provider. That is particularly attractive since insurance from the cruise lines is particularly expensive. However, some cruise-line insurance allows you to deal directly with the cruise line. That can be a major convenience when something goes wrong. Obviously, you should check with your cruise line for specifics. The second advantage is that cruise line insurance frequently lets you cancel for any reason. This insurance may not offer full coverage, and it may have other limitations. However, the convenience is incredible when you need to cancel for an uncovered reason.
The final option is to consider any travel insurance provided by your credit card. For example, premium cards such as the Chase Sapphire Reserve frequently provide some sort of supplemental coverage. Unfortunately, there is no single answer about which travel insurance is the best option. The important thing is to ask the question. It is good to have a backup plan when something goes wrong on your big trip.