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You don’t see them much anymore but airports used to have machines for purchasing flight insurance. They made me nervous because you don’t want to think about a negative outcome right before boarding the plane.

Factors to Consider with Travel Insurance

However, there are times you should consider purchasing travel insurance to avoid missing the trip of a lifetime because of an emergency and losing your money. Without hard and fast rules on when to insure your trip, use these factors in your consideration.

Risk Tolerance

I wouldn’t recommend buying travel insurance for an inexpensive trip. Only you can decide the price point where it becomes expensive. For me, I’m willing to risk a few hundred dollars versus paying a high-percentage premium for insurance.

When booking a tour in Europe a few years ago, my mom was not ready to lose $3,000 per person so she bought travel insurance.

Cancellation Policy

It’s important to understand the cancellation policies of vendors involved with the trip before you make the purchase or deposit. We like to take cruise vacations which often involves not only the cruise line but also airline flights and a pre-cruise hotel. Each of these providers has their own cancellation policy.

Most cruise lines and tour companies offer at least partial refunds but the percentage declines the closer to the trip date. Cruise lines usually won’t refund any amount within 14 days of the sailing.

Airlines almost never give the money back for refundable tickets but do allow changes for a $150 change fee per ticket.

Personal Concerns

There are many personal circumstances that may result in travel plan changes. If you or someone close to you is in poor health than buying a policy with cancellation coverage for illness of yourself or a close family member should be strongly considered.

The same goes if you have work or any other obligations that would require modifying trip plans. Policies that allow for these contingencies typically require purchase within a certain number of days of booking travel.

Geographic Region

Although the unexpected disease outbreak (SARS in 2003 and H1N1 in 2009) can disrupt travel to countries generally considered safe, sometimes travelers purposefully visit geographic areas with concerns. You might want to mitigate the risk of traveling to locations with poor sanitation or where communicable diseases are common by insuring the trip.

Another geographic concern may relate to violence or stability of the government. Keep in mind it may be difficult to find insurers for travel to countries listed on the State Department travel warning list. Unforeseen events affect people’s travel plans all the time. It might not be possible to save your vacation or trip, but with travel insurance you can avoid significant financial loss. Review these factors and decide if it makes sense for you.

Have you ever purchased travel insurance?

Creative Commons License photo credit: Telstar Logistics

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11 comments comments closed

  1. One way to mitigate the need for travel insurance is go with Southwest, which always lets you cancel your flight for full credit. Once, I needed to change my flight by a day, and about 24 hours before my flight was scheduled to take off, I changed my ticket for just $30, the difference in cost between the tickets. I wouldn’t have done it for $150, but I loved the flexibility.

  2. Daniel, that is one of the best things about Southwest for flights. Unfortunately, they only fly domestically but I think that will be changing with the acquisition of Air Tran.

  3. I buy travel medical coverage whenever I travel out of the US. Partially this is because I am allergic to things that are “normal” for other people. Something I eat or come in contact with can cause a disaster, or my life. I carry safeguards to that, but I also purchase this policy as primary insurance so there is no dispute who is paying. They are first, then whatever my regular insurance will cover if there is any remainder. We have not found this to be “outrageous” considering my allergies, and what could happen if someone had to “make sure of payment” before the treated me. For 8 days in Scotland, it was $72.00 for my husband and myself — and that peace of mind was worth every cent.

  4. We bought insurance once. We were going to China so it was a big trip for us. We did check the cancellation policy, especially if H1N1 was covered. The trip went just fine. But I was glad we bought insurance. I felt so much safer.

  5. Johannah, medical expenses are a big concern when traveling. Many people don’t realize their health insurance may not cover expenses outside the U.S.

  6. Aloysa, I can see buying travel insurance for such a big trip. The only time I flew overseas we did have it.