When Should I Buy Family Travel Insurance?

Some people purchase family travel insurance religiously for each trip, while others have never considered it, and I often get questions about whether trip insurance is a good idea or not. Because we tend to travel independently and rarely cancel, we use trip insurance only infrequently, and I have thought long and hard about when it is appropriate for us and when it is not. Here are my tips to help you decide whether travel insurance makes sense for your family vacation.

Road from Santa Fe to Taos

What Would Happen if You Canceled?
If you purchased deeply discounted airfares and your hotel rooms are can be canceled without penalty, you might want to forgo travel insurance and "self insure." Over the long run, the rare times when you pay out of pocket for a different airline ticket or a last minute cancellation may add up to less money than purchasing trip insurance for each trip.

On the other hand, if you've just booked a non-refundable all-inclusive cruise or resort package, you stand to lose a lot of money, and travel insurance might be a great choice.

Questions to Ask Yourself

• What is the refund policy on the airfare and hotels you've booked?
• How much money would you lose if you canceled the trip before leaving home?
• How much money would you lose if you had to book a different return ticket due to illness?

How Likely are you to Cancel?
In our years of frequent traveling, we've only canceled a handful of trips, but every family's situation is different.

Questions to Ask Yourself

• Does someone in your family have a medical condition?
• Does a parent's work situation makes cancellation likely?
• Are there other circumstances (e.g. potential job loss) that could cause you to cancel or return home early?

Do You Need Medical Insurance?
Your home medical insurance may not give you the coverage you need while you are traveling abroad. Check your policy carefully to understand your coverage and limitations when you are traveling.

Questions to Ask Yourself

• Do you have medical insurance?
• Does your medical insurance cover you at your destination? (note that cruise ships with a foreign flag are sometimes considered foreign territory)
• Will your medical insurance pay a foreign provider directly, or are you expected to pay and then get reimbursed?
• Will your medical insurance cover the activities you plan to do (e.g. sports)
• Are you visiting a destination where evacuation insurance is important (e.g. a remote or undeveloped area)

Lost Baggage
The standard coverage, should an airline lose your bag, is very low - and of course it doesn't cover you at all if your luggage is stolen out of a hotel room or rental car. Still, lost baggage insurance may or may not be a good choice for your family.

Questions to Ask Yourself

• Does your homeowners insurance cover items stolen or lost from your luggage?
• Does the credit card you charged your tickets on cover lost luggage?
• Are you bringing anything expensive on your trip (e.g Golf clubs? Camera Gear? Medical Equipment?)

Other Tips
If you do decide to buy travel insurance, make sure that you thoroughly research the insurance company. Insurance sold by the same company you booked your cruise with, for example, probably won't help you if the cruise line files for bankruptcy. In other cases, unscrupulous or unknowing travel agents might sell you travel insurance that isn't travel insurance at all. Just as with everything else, if the price seems too good to be true, it probably is.

Filed Under: budget travel-insurance travel-tips

5 comments | Posted on March 2, 2009 | Save to del.icio.us

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