Last Updated on May 6, 2016 by Jody Halsted
“Do I need travel insurance for my family vacation?”
It’s a question I receive often, and one that doesn't have the same answer for everyone as it has to do with risk, as well as figuring out the coverage you may already have.
Since the question is on the table, lets delve into it piece by piece.
Why You Might Need Travel Insurance for Your Family Vacation
It’s helpful to begin by simply pointing out the purpose of insurance, which is to provide you with a form of protection against a possible risk.
How Much Risk Are You Willing to Take?
This varies from person to person, family to family. What is your threshold? Some families may say $1000, while others say $5000, or $10,000.
Another way to think of it is, “If my family couldn't go on our trip, how would it affect us financially to lose the money we spent?”
That last question puts a bit different spin on it, yes? Would you want to reschedule the trip? Or replace it with something else? If so, travel insurance might be a good idea.
What Does Travel Insurance Cover?
Packaged policies will cost from 4-8% of your trip cost and often include coverage for trip cancellation and delay, interruption (in case you have to return home suddenly), medical costs, and lost or delayed baggage. Additional options include medical overage, medical evacuation coverage, and ‘cancel for any reason’.
It’s important to remember that not all policies are created equal, so thoroughly read the policy details and compare before purchase.
But first… Figure Out the Coverage You Already Have!
You may have quite a bit of travel insurance that you aren't aware of! Do you use a credit card for travel? Homeowners or renters insurance? You likely have a bit of coverage already.
For example, my World MasterCard offers lost or delayed baggage coverage, trip cancellation or curtailment coverage, trip delay and missed connection coverage, accident, medical, hospital, and emergency evacuation coverage when the trip is paid for using this credit card. Travel Assist services are also offered (but are not insurance).
Check your personal insurance coverage for theft and losses away from home. Talk to your insurance agent before leaving home if you travel with expensive electronic equipment. An inexpensive rider on your policy could cover those items for theft during travel.
What Else Do You Need?
If I am planning a trip far in advance, I often want “Cancel for any reason” coverage. While this type of coverage reimburses only 75% of your trip costs, it helped us save our trip last fall when a planned 5 week journey fell apart and became a 10 day jaunt.
Where Should I Buy Travel Insurance?
Trip operators, airlines, cruise companies, even travel agents, offer travel insurance. Often these policies have a mark-up, or the coverage isn’t as good as a third-party insurer. Some may only offer vouchers for future travel as opposed to cash. Be sure to do your homework and compare policies before purchasing any travel insurance.
A quick search for ‘travel insurance’ will give you many (many) options. My personal recommendation is Squaremouth (affiliate), a company that helps you compare travel insurance. After providing necessary information – travel dates, trip cost, ages of travelers, where you are traveling, etc.- Squaremouth returns the best options based on your requirements.
If you look closely you can see that I have requested ‘Cancel for any reason’ as a filter. If I removed it the cost drops and the options change. Be sure to compare policies carefully before you buy.
When Should I Buy Travel Insurance?
You can buy travel insurance any time before you depart on your trip. Personally I buy my insurance just after I secure my flights and car rental. Why? Because you never know what will happen. Maybe the rental company or airline files for bankruptcy and closes its doors. Your money- and possibly your trip- are gone.
Also, most travel insurance policies cover pre-existing conditions that are under control if you buy the policy soon after making that trip payment. Up to 20% of travel insurance claims can be traced to pre-existing conditions, so this may be an important consideration for you. (Be sure to read your policies carefully and look for the coverage you know you need!)
Should You Buy Travel Insurance for Your Family Vacation?
Only you can answer that question. What is your threshold for risk?
Do I buy it? Not all the time. Am I thankful when I do buy it and end up needing it? Always.
For more information on travel insurance, visit the US Travel Insurance Association. To compare prices on travel insurance visit Squaremouth by clicking the image below.