Travel is the ultimate thing on many people’s wish lists. There are more available destinations, more people traveling, and lest I forget, there is more money to be paid. Hotel and resorts reservation prices are going up, even as you are getting more amenities for your money. And the airlines – new fees, increasing cost, without also forgetting that the fee to change flight could sometimes cost as much as the original. Indeed, vacations have achieved a whole new level of expensive.

Yes, travel is expensive without the extra cost of travel insurance. Still, increasingly more persons, as much as 40% of travelers a year, are insured against travel-related losses. Why the bother? Is this just another rip-off or is it worth the cost?

Not every trip needs travel insurance. However, it can be tricky determining which trip needs insurance coverage and which does not, more so as coverage is mostly designed for unplanned interruptions.

As a rule of thumb, every trip into which you’ve invested significant amounts is best insured. What happens when someone (say your child) gets sick and you have to move your trip a little forward? Or, you have an emergency and cannot make it anymore? A no-show could easily become a loss, but if you have a travel insurance, it will soften the hit on your pocket.

Another major coverage offered by travel insurance agencies is health. Ever visited a new country only to react badly to the climate? It could also be that you come down with a new sickness during your trip (caught during the trip or already budding from before the trip) and you have to cancel. It is also worth noting that the quality of medical care in some countries can be questionable. In cases of forced medical evacuation, travel insurance helps to pay for those unexpected medical costs.

For baby boomers, your vacation might have to be cut short due to an aging parent needing emergency medical attention. Adventure sports lover? If you have decided to go hiking, sky-diving, or you are hoping to take part in a professional or athletic event (say operating an aircraft), a travel insurance can provide claims in cases of injury – be sure to confirm that this is included in your coverage. Often, it could just be a case of an unexpected natural disaster: snowstorms, hurricanes, volcanoes, and the likes.

Travel Insurance Protection

Are you protected?

A “default” protection offered by travel insurance is the trip cancellation insurance. Usually, a multitude of reasons is included here, from health to natural disasters. Other conditions for filing claim could be cases of lost baggage search, identity theft, or lost travel documents.

You’ll have to be wary of conditions that could make you lose out on certain benefits. For instance, most insurers give better coverage and waive off exclusions if you buy the insurance almost immediately after you pay for your trip. Likewise, knowledge of an impending disaster or diagnosis of a health condition that could lead to a termination of your vacation could remove some benefits of your travel insurance.

Is travel insurance worth it? I might consider it irrelevant if the cost of my trip (or the loss from a cancellation) is very minimal. I might also be tempted to consider it irrelevant when the vacation is rather short. However, while travel insurance could gulp up as much as 10-20% of the trip cost, the peace of mind that comes with knowing that you covered in case of any emergency is priceless.

NOTE: About one in every six people who buy travel insurance eventually file a claim.

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