What Travel Insurance Covers and How Much It Costs

You can get travel insurance from a number of sources: The airline or cruise carrier directly, an independent travel insurance agency, and, sometimes, your credit card. In general, travel insurance costs around 5 percent of your total trip. For a $4,300 trip, for example, I paid $158 for standard travel insurance with Allianz.

Trip cancellation and trip interruption insurance: This reimburses you non-refundable travel costs if your trip is cancelled or seriously delayed due to a natural disaster, illness, or the carrier goes out of business.

Baggage and personal items coverage: If someone steals something from your bag or your luggage is lost or delayed, travel insurance will pay you for your trouble, usually up to about $500 per lost baggage and $100-$300 per baggage delay.

Emergency medical insurance: Just as you wouldn’t want to go without medical insurance in everyday life, when you’re traveling abroad it’s important to stay covered in case of accidents.

Accidental death or dismemberment insurance: If you or a loved one dies on the trip or suffers a life-impairing accident (e.g., losing eyesight), this insurance feature pays out up to about $500,000, depending on the situation.

So Is It Worth It?

As with other insurance policies, buying travel insurance (or not buying it) is a gamble. You don’t want to ever regret not buying the insurance, but you also don’t want to pay for something you don’t need—and, looking at the list above, you might already be covered for some of these items elsewhere (e.g., you already have life insurance that covers death or dismemberment or health insurance that covers emergencies abroad).

Step One: Decide how much is at stake if something goes amiss on your trip. You probably don’t need travel insurance if you got one of those cheap $99 last-minute flights.

Step Two: Figure out if your credit card offers travel insurance. If it does, read the fine print to see if it would cover your insurance needs.

Step Three: Find out how much travel insurance costs for your trip. Use comparison site InsureMyTrip to compare independent agency policies available to you.

Finally, remember that you have to get insurance before your trip starts; it won’t protect you if you get the insurance after an accident happens or your trip is cancelled (that’s like trying to get home insurance after your house has already burned down).

by Melanie Pinola

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