Trip Insurance–Is it Worth It?

Things are slowly starting to open up, despite the Covid variants. We restless souls are once again thinking about traveling. Several of my friends have asked about travel insurance, so I decided to update this post that I originally wrote oh so long ago, in 2019.

Is Trip Insurance worth it? Here’s the Cliffs Note version: It all depends. For some, trip insurance is definitely worth it. But there are caveats. Know what you need, know what you are buying, choose a reputable company, consider other options.

Know What You Need
Medicare does not cover you when you are out of the USA, so for some people, the main reason for buying trip insurance is to get medical coverage. We are fortunate enough to have a very generous medicare supplement, which DOES cover us for emergency services wherever we are in the world. So, for that reason, I chose the AIG policy that offered minimal medical and dental coverage, and the medical coverage was secondary. (That means they will pay after other insurance has paid first. So, you need to submit to your primary carrier, and then whatever isn’t covered, you would submit to the secondary carrier.) If your health plan has a high deductible, and high out of pocket maximum, then you may want or need more generous travel insurance benefits.

For some people, “cancel for any reason” protection may make sense. This might be true for someone still in the work force, who may have to change vacation plans because of work responsibilities.

In the past, before Covid, our main concern had been trip cancellation for health reasons (either ours or a family member), or trip interruption. Remember when the volcano in Iceland erupted and people were unable to continue with their original travel plans? That’s the sort of thing that worries me.

You can get plans that offer trip interruption at 100% of the cost of the trip (the amount you are insuring) or 150% of the cost of the trip. Why would you want to purchase coverage for more than the cost of the trip? Well, if your trip is interrupted, you may have to stay in another country longer than planned or you may have to change flight arrangements (which could be very expensive).

What about Covid? Different travel companies have different policies. If a trip has been canceled by the tour company, most are offering the travelers a choice of either a refund or of rebooking with some kind of bonus. It is wise to check the tour company’s policy before submitting your deposit.

What if YOU cancel? Again, check the tour company or airline/hotel/Booking site for their policy. We are frequent travelers with Overseas Adventure Travel. They will allow travelers to rebook without any change fees up to 24 hours before the original departure.

But what if you are not on a group tour? What if you are traveling on your own, driving to hotels that allow you to cancel within a day or two of arrival? You may not need any trip insurance at all.

Know What You are Buying
I have used Insuremytrip.com to compare various travel insurance options. There are other companies, such as Squaremouth.com, but I’ve had good luck with Insuremytrip, so they are the only company that I have had experience with.
Others may be more comfortable using an insurance agent to find the plan that best meets their needs. If you DO decide to do it on your own, be sure to download the complete policy and read it carefully so that you know exactly what you are getting.
Things to look out for: Pre-Existing condition exclusion clauses, what qualifies as a covered reason for trip cancellation, what level of coverage is offered for things that are important to YOU and is that coverage primary or secondary?
For example, I never check anything valuable when I travel, so I don’t care about the level of coverage for lost luggage. The airlines offer some coverage for delayed or lost luggage, and the airline is usually considered primary.
If you are uncomfortable purchasing a plan from the internet, you can speak with a representative for Insuremytrip.com. They are not paid commissions, so they do not have a financial interest in your choice of plan. That may be true of similar companies.

Choose a Reputable Company
Take the time to read the reviews. Insuremytrip, for example, includes Better Business Bureau ratings, AM Best ratings, years in business, and reviews by users for each of the companies offered, and allows you to do a side by side comparison of the plans. You can also do a google search.

Other Options
Check your credit card for any coverage they might offer. You need to read the booklet that they give you when you first enroll, or compare the benefits of the various companies on line.
I had never considered the Chase Sapphire Reserve card, because of its $550 annual fee. Then I read a post from a fellow traveler who explained that Chase reimburses you up to $300 for any travel expenses you incur during the year. They also offer trip interruption and cancellation insurance, up to $10,000 per person and $20,000 per occurrence, with a $40,000 per year maximum. To us, that coverage is easily worth the remaining $250 per year charge.
Some of my friends swear by one of the premium American Express cards. It is also possible that Citibank has something competitive, but I have had no experience with either.
You may also consider purchasing the insurance that your tour group offers. I always take a look, but so far, have been able to find more attractive options. That may change as we get older.
If the thought of doing all that research gives you a massive headache, you can always choose an agent who is knowledgeable about trip insurance and can help you find the coverage that best meets your needs. If you don’t already have an agent, Dan Drennan was highly recommended by a traveler on a travel forum, and rightfully so. I’ve had positive experiences with Dan and am pleased to share his phone number with you: 402-343-3621.

Tips for Filing a Claim
Sadly, in 2019, on our trip to Australia, we had the opportunity to investigate in great detail how Trip Interruption Coverage works. We were pleased (and quite frankly, amazed) by the speed with which we were reimbursed for our expenses.
Here are some suggestions to help you navigate the claim process, should the need arise.

  • Notify the insurance company as soon as you realize you will be submitting a claim. They can email you the claim form, tell you what to include when you submit your claim and provide moral support. The medical team at AIG Travel Guard was wonderful. Although I didn’t need their help, it was nice to know they were available, if I wanted them to check up on me and my husband.
  • Keep ALL receipts. I immediately bought a spiral bound notebook and scotch tape, so that I could enter every receipt, by day, into the notebook, with notations indicating what the expense was for. It is very easy to lose small pieces of paper, like taxi receipts.
  • If you can, pay everything with one credit card. It makes documentation much easier. If you are in a foreign country, your credit card statement will have a record of the currency exchange rate for that item. You simply match the receipt against the credit card charge, and you save the claim examiner that extra task, which brings me to the next point.
  • Make it as easy as possible for the claim examiner to pay the claim. A claim for trip interruption is far more complicated than one for trip cancellation, so more information was needed to process our claim.
  • I created a “claim package”, with a cover letter and a table of contents. I explained what was being provided and identified the attached exhibits. I also created a spreadsheet showing what I expected to collect. It took me a day to get everything organized, but I didn’t have any back and forth with either insurance company.
This will give you an idea of the paperwork I submitted. Can you see why I wanted to help the claim examiner out?

Let’s hope we are all safely traveling again, real soon. Happy trails!