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Do I need Travel Insurance?

Trip insurance is one of those extra expense type things. If you purchased it and don’t use it then you may feel it’s a waste of money, if you don’t purchase it and something happens then you kick yourself for not getting it. Over the past year I have had more and more people start to add trip insurance to their itineraries because of the peace of mind it brings.

With Covid-19 there are new considerations to take into account when purchasing trip insurance. What happens if the place I am going closes to tourists? What if the hotel where I am staying goes out of business? What happens if I can’t get to my destination because the airline cancelled all it’s flights for that day? What happens if I catch the virus?

Now more than ever it is imperative that you consider travel insurance when you travel, but there are many options to choose from when doing this. I hope this week’s newsletter will give you some insights on what to expect and what options are out there.

The first thing is to consider if you want basic insurance or cancel for any reason insurance. Cancel for any reason insurance is just that. You can be having a bad hair day and decide you just don’t want to leave the house and this insurance will cover you. With basic insurance, you have a list of qualifying reasons under which you can cancel and get a refund…usually 100% cash refund. If you don’t fall under one of those reasons then you can qualify under the cancel for any reason and get about a 75% refund in the form of a future travel credit instead of cash. You will also pay more for a cancel for any reason insurance policy.

So, what happens if you get sick and your doctor will write you a note? The basic insurance should cover that (again, check to see what is covered). However, insurance companies are no longer covering Covid-19 as a medical excuse to cancel. This means if you have a trip and you cancel because you have Covid-19, if you don’t have cancel for any reason insurance then the insurance won’t cover you. I have heard that insurance companies are looking at adding Covid-19 as an insured reason but that it will be a more expensive policy.

Here are some other reasons that are typically covered if you need to cancel. If you are a key employee and are required to work, if someone in your immediate family becomes sick and you need to stay home, you have legal proceedings you have to go to (ex: jury duty), your home becomes uninhabitable (ex: a hurricane or tornado comes through), traffic accident, you lose your job, mandatory evacuation, or military duty. These vary from policy to policy so be sure to read the policy to see what is covered.

A lot of policies also have trip interruption coverage. If you have a connecting flight somewhere and your first plane is late and you miss the connection, this part of the insurance can pay for getting you on the next flight or even a hotel for the night. It will also help cover things like extra meals or clothing if you can’t get to your suitcase because it went on without you.

I feel the most important part of the insurance is the medical coverage it offers, especially if you are going out of country. Your credit cards may offer travel insurance as an incentive or you may have medical insurance that is top of the line. If you think either of these will protect you if something happens when you are overseas, you may be in for a surprise. I am not saying you will need to get other insurance, but I am definitely saying that you need to contact your credit card or insurance supplier and find out what they will and will not cover. Some medical insurances won’t even cover you if you go over the state line; if you go overseas and get hurt you can be guaranteed that they won’t cover you for that.

So, how valuable is having travel Insurance if you are going out of country? Imagine that you just got off your ship and you are walking down the street when a car comes out of nowhere and hits you. You are taken to the hospital and they decide you have some serious injuries and you need to be medi-lifted back to the United States. You are informed that the cost will be $20,000 for the medi-lift and you have to pay it ahead of time. You pull out your travel insurance policy and call the number on it to recap what the doctors just told you. About five minutes after you get off the phone the nurse comes in and tells you that your helicopter is waiting on the roof and that everything has been taken care of by the insurance company.

The last thing I want to mention is that even though you may think that you are in top physical shape and there is no way you would miss your vacation because of illness or something like that, consider other people. You may be perfectly fine to go on your vacation and then you get a call that a loved one is sick or in the hospital and you need to change your plans to be with them. Things outside of your control can happen and it is better to be prepared for them and not need to use the insurance than to not have it and need it. Do you really want to risk losing that $10,000 you paid for your vacation because you didn’t want to pay an extra $300 for an insurance policy?