Imagine it. For months you’ve been looking forward to your getaway! A true “trip of a lifetime”. But two days before you’re scheduled to leave, your spouse is in a car accident. They’ll be OK but have multiple broken bones and there’s no chance of travel. Now you’re not only worried about your spouse, but out the thousands of dollars you paid in advance for your vacation. All because you didn’t consider travel insurance.
It’s a more common scenario than you might think! My mom experienced this when I was a teen. Newly divorced, she’d saved for months to take us on a lovely, warm-weather cruise. Two days before departure my grandmother broke her hip. The stress of coordinating my grandmother’s care was compounded by the financial devastation of the trip money lost! And it was the first time we became aware of the value of protecting our travel investments.
NOTE: This post was updated to reflect our new COVID-19 World on 4/23/2020. See details below.
Today we’re talking about three times when you should consider purchasing supplemental travel insurance.
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Trip Cancellation Coverage
We typically self-insure our trips but there are three occasions when purchasing supplemental travel insurance can make sense:
- Cruises (often pricey and fully pre-paid)
- Package tours (same as above)
- Any time you encounter significant pre-paid services with a no-refund cancellation policy. These may include all-inclusive resorts, private charters, some in-home rental lodgings, special event tickets, etc.
Cost to insure depends on the coverage variables selected but typically runs about 2.5-10% of the total insurable amount. For example, a trip with $10,000 in non-refundable expenses may cost $250-1,000 to insure.
With most flights, you can get a refund or credit applied as long as you cancel before your flight departs. The same is true for major hotel chains. If the carrier or hotel group is one you use often, it’s easy to self-insure as you’ll likely be traveling with them again at some point.
Because our primary concern is canceling due to our own sickness/injury or that of a family member, we typically focus only on this form of coverage. Our costs have been at the lower end of the percentage shown above, usually 2.5-4% of the insured amount. It’s well worth it to us for the peace of mind it gives knowing we have elderly parents at home.
While covered in part by many credit cards, if you’re concerned with baggage loss/delay, travel delay, rental car or medical/dental protection while traveling, you may wish to investigate that coverage as well.
My Favorite Travel Insurance Resource
Insure My Trip is an insurance aggregator that allows you to easily compare the features and prices of a variety of plans. NOTE: Your plan typically must be purchased BEFORE the date that your trip becomes non-refundable. So, if there’s no refund for canceling less than 90 days out, you’ll want to have your policy in place prior to that deadline.
Insure My Trip has a self-guided questionnaire that will ask you:
- Your county of travel or first stop if visiting multiple locations
- Your age and state/country of residence
- The dates of your travel
- The amount you want to insure and your first deposit date
Next, they’ll display all the policies for you to consider. You can sort by provider, price or overall rating. For special circumstances, you can choose to display only policies that meet certain criteria such as:
- Cancellation for work reasons
- Cancellation for any reason
- A pre-existing condition waiver
From there you can select, compare and purchase your individual plan. Many have a 7 to 14-day grace period where you can review all the terms and fine-print before being financially committed to the policy.
While no one is traveling as I write this (4/23/2020), I highly recommend “cancel for any reason coverage” for any costly pre-paid, travel scheduled post-pandemic. Cancel for any reason coverage is more expensive and usually has a few additional stipulations:
- It typically must be purchased within 14-21 days of your initial deposit.
- You may be required to insure not only the non-refundable portion of your trip but the other services you use that may be refundable (hotels, airfare, etc.). Be sure to clarify this at time of purchase.
- If you cancel, to receive credit, the cancellation typically needs to be made 2-3 days prior to your trip departure date.
- You will not receive a FULL refund. Typically reimbursements are for 50-75% of your non-refundable costs.
It is more expensive coverage (typically about 40% more than standard trip cancellation coverage) but can still be well worth it if your trips run into the tens of thousands of dollars (some cruises, pre-paid safaris, etc.). Going forward be sure to check the fine print on insurance for: COVID-19, general pandemic and default/bankruptcy of provider exclusions. All will be critical to determining your reimbursement coverage in this situation.
Extended Medical Coverage
For extended medical coverage, check out this post about Global Guardian’s Air Ambulance Card. This is the supplemental policy we’ve used on more adventurous trips to far-flung locales. Their product:
- Applies worldwide and in the US when you are 150+ miles from home.
- Has NO pre-existing condition exclusion.
- Has NO “medical necessity” requirement.
- Will transport to any facility you choose, NOT “the nearest appropriate facility”.
- Has NO claim forms or deductibles. The annual fee is all you pay.
The family plan covers two adults ages 16-75 AND five dependents under age 25 for just $385 per year. Medical, trip insurance plans and credit card coverage do not offer these benefits! Read the fine print.
Happy travels and until next time…keep cultivating a simple, stylish and satisfying life!