Why travel insurance can save the day

When Katie Kubitskey made plans to attend a friend’s destination wedding in Izmir, Turkey, last summer, she never imagined she’d need travel insurance.

After all, Kubitskey, a marketing manager from Louisville, had lived in Turkey for two years, and as a part-time travel adviser, she was something of an expert on the region. What could possibly go wrong?

You can probably guess what happened next. A bomb went off at the Istanbul airport, leading to second thoughts about her trip. Fortunately, Kubitskey had purchased a travel insurance policy that covered her. After she canceled her trip, she received a full reimbursement of her non-refundable airfare and hotel expenses.

“If we didn’t have insurance, our family of four would have lost tens of thousands of dollars,” she says.

As you start to plan your summer travel, you might want to think about insurance. More Americans are doing it. More than 33.4 million people bought insurance policies in 2014, the most recent year for which statistics are available, according to the U.S. Travel Insurance Association, a trade group. The number of people covered increased about 18% from 2012.

Travel insurance isn’t for everyone. Sometimes, you can’t buy coverage for your trip, or the likelihood of filing a claim is so low that you’d just be wasting your money. But insurance can save the day.

“Travelers often think insurance is just a scam,” says Erin Logsdon, a Southborough, Mass., travel agent who specializes in Caribbean and Europe travel. “The truth is that accidents can happen anywhere, and many claims are due to unforeseen circumstances.”

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Remember when astronaut Buzz Aldrin had a health scare when he visited the South Pole last December? He was rescued, at least in part, by his Seven Corners travel insurance policy, which flew a nurse to New Zealand to oversee his care and covered the cost of his medical evacuation. Travel insurance can cover the sometimes considerable expense of getting you home when you fall ill.

Five myths about medical evacuations
Insurance can also cover an unexpected cancellation or trip interruption. When a blizzard hit New York last winter, Kristen Montag’s airline canceled her return flight to Minnesota. She had to spend an extra night in Manhattan.

“Good thing I had purchased the Allianz travel insurance when I booked the flight,” says Montag, who works for a non-profit organization in Minneapolis. “I made a claim, submitted my receipts, and Allianz reimbursed the cost of my extra night in the city, saving me about $225.”

A reliable policy can cover something completely unexpected. For example, just before Nancye Van Brunt’s recent three-week trip to England, her husband lost his vision.

“We were not in a position to go on this trip,” says Van Brunt, a retired costumer from Cincinnati. “Our travel insurance ended up paying for almost everything. What this meant was that we were able to afford another trip.”

Situations such as these are the reason travel professionals always recommend insurance. Greg Geronemus, the co-CEO of smarTours, a New York-based tour operator, says about 70% of his clients buy insurance.

“Despite these high levels of participation, there are a lot of misconceptions about travel insurance, and even seasoned travelers underestimate the scope of different scenarios that it covers,” he says.

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Basically, the travel insurance myths come down to this: Many travel protection policies cover far more than trip cancellation. They extend to medical emergencies and coverage overseas, trip interruption, baggage delay or loss, and they come with a 24/7 team to assist you.

Of course, there’s a reason travel insurance is so popular, if not necessary. Travel companies have become a lot less understanding and generous when their customers have to cancel. In some instances, the tightening of their cancellation policies has led to an uptick in insurance sales, which benefits the company. Cruise lines are the biggest offenders in that department.

Regardless of the reasons, you’ll want to consider a travel insurance policy for your summer trip. Otherwise, you could end up in this column.

What travel insurance doesn’t cover

Insurance won’t cover everything. The standard “named exclusion” policy has a few notable exceptions:

• Pre-existing medical conditions. Though some policies offer a waiver for medical conditions, you have to make sure you meet all of its conditions. Otherwise, canceling a trip because your bad back acted up will be unsuccessful.

• Changing your mind. Don’t want to take the vacation? Most insurance won’t cover you, but you can always go for a more expensive “cancel for any reason” policy, which would.

• Psychological or nervous disorders. If you can’t board a flight because you’re afraid of flying, you generally can’t file a successful claim.

• Partying too hard. If you had a little too much to drink the night before your return flight and missed it, don’t bother filing a claim. Intoxication is not a covered circumstance.

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org.

  • Dutchess

    A good credit card with travel insurance can be a passive way of protecting your trips. My friend and I were planning on traveling to Europe in June. He collapsed on the softball field from an undiagnosed heart condition and wasn’t able to take his portion of the vacation. His credit card’s travel protection/insurance reimbursed him for his original flights and the airline reimbursed him the miles he used for upgrading.

  • LDVinVA

    We generally rely on the credit card travel insurance only for trips within the USA since, at least on our card, there is no medical coverage.

  • Bob Davis

    We always buy it mainly for the medical. We successfully used a polity about 9 years ago where my wife was hospitalized. They paid the extra travel costs and the $2K co-pay at the hospital.

  • Joe Wojnowski

    My wife and I always buy Travel Insurance when traveling outside the US. Same reason as Bob Davis mentions – Medical and Medical Evacuation coverage. Haven’t had the need to use it yet, but that’s actually a good thing.

  • jim6555

    One rule that I have for myself and family is never purchase travel insurance through the travel provider (airline, cruise line, etc.). These policies are usually more expensive and offer fewer benefits than policies purchased through reputable online sites or from brick and mortar travel agents.

  • joycexyz

    Travel insurance is no more of a scam than any other insurance. You buy homeowners’ insurance, but are you annoyed that you don’t get to make a claim? Ditto, auto insurance. I can’t think of any sane person who hopes for a house fire or auto accident to reap the benefits. Insurance is for the unexpected. Be happy when you don’t have to make a claim.

  • Carchar

    I never leave the U.S. without it, and I also insure prepaid U.S. tours. When flying here to visit family, I figure I’ll “eat” the change fees. Only had to do that once so far, when I couldn’t fly out of Boston when they had had several feet of snow. I couldn’t get to Boston by car, as planned, to visit family, so I had to switch my flight to my home airport of Newark. At least the new flight turned out to be cheaper than the old one, but change fees added to that.

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