For more tips and tricks on travel insurance, we reached out to Alaska Travelgram’s Scott McMurren. Scott’s extensive traveling gives him a unique perspective on what to consider when deciding whether purchasing travel insurance is right for you.
First, it is wise to review and understand the insurance you already have. Scott urges travelers “to inspect the particular terms and conditions of the insurance policy they select. Keep in mind that you may already be covered for some routine issues like medical, car rental and trip interruption insurance through your credit card or your homeowner’s insurance.”
Tip #1: Be familiar with the rewards and benefits of your favorite credit cards
Scott shared a personal story where his Alaska Airlines Visa Card helped him get out of a bind. He writes:
I bumped into a big cement pole underneath Whole Foods in Seattle. The folks at Enterprise were very nice—no handcuffs were involved. My agent at Allstate advised me that because I charged the rental on my Alaska Airlines Visa card—they would pick up my $500 deductible. Which they did.
The simplest way to know what your credit covers is to call the credit card company directly and specifically ask about your travel plan and destination(s). Keep in mind that many credit card companies will not offer you insurance if you purchase insurance from a third party, like a rental car company or a travel company.
A great online resource is NerdWallet. You can compare different travel credit cards to find a card that offers the best rewards, points, miles, cash back, and/or perks that fit your travel needs.
Tip #2: Understand what your homeowners insurance already covers
Scott recalls another incident where his existing coverage saved his shorts:
We had all of our stuff stolen out of our car in Italy. Laptops, backpack, camera gear…the works. Our homeowner’s insurance from Allstate covered everything after the $1,000 deductible. They were easy to work with—and we still have our policy with Allstate.
It is worth reading the fine print on your policy or contacting your insurance agent for more information on what your specific policy does and does not cover.
Tip #3: Know the cancellation policies for your different travel arrangements
Life happens. Sometimes our plans change unexpectedly. When making reservations for hotels and excursions, it is advisable to ask about the cancellation policy. One trick is to make a calendar notification leading up to your trip to remind you about the last day to cancel the reservation to avoid any unwanted charges or lost deposits.
Airline tickets are often non-refundable unless you opt to buy extra insurance at the time of purchase or by paying a change fee. It’s worth mentally calculating how much you are willing to forego if your plans unexpectedly change to determine if the extra fee is worth it to you.
And then there’s every traveler’s fear – a missed connection that throws your whole itinerary off track. Typically, the airlines are good about helping you get another flight if you miss a flight connection. But what about a connection between a flight and a train, or a cruise and a bus? It’s good to know how the travel company you are booking your reservations with handles these sort of unforeseeable travel complications.
Tip #4: Understand your existing medical coverage
Medical accidents are most often what travel insurance is used for. In most cases, Medicare does not cover medical care outside the country. If you are planning to travel abroad, you may want to know what Medicare covers outside the US.
Have you found gaps in your existing coverage? You may want to consider comprehensive travel insurance
If you determine that travel insurance is right for you, Scott recommends a great resource to compare policies available in the market place: INSUREMYTRIP.com. This is a site where you can plug in the value of your trip and you will get some competitive bids from both Allianz and BHTP. Another option is World Nomads. Pay attention to any preexisting clauses in the travel insurance.
Scott notes that “trip cancellation, lost baggage, medical insurance—even emergency evacuation” are covered by these policies. He writes:
Typically, the policy covers cancellation fees if you get sick. It does NOT cover you if you change your mind. There are, however, some policies where you can elect to cancel your trip for ANY reason or NO reason. They just cost a lot more.
If you are going on an expensive or an exotic journey, they may require you to purchase their pre-selected insurance. You may be wise to do so. For example, if you’re going on a safari in Africa, there are some policies that will cover your evacuation on scheduled airlines. There are others that will provide for a chartered medevac jet. That’s more expensive, of course.
In most cases, you’ll find that comprehensive travel insurance for medical, lost luggage and trip interruption/cancellation is more affordable if you purchase it independently. But there are some cases where it makes sense to buy it through your tour operator (for a cruise to Antarctica, for example).
As with most insurance you buy, you hope you don’t have to use it. Often-times, travel insurance is purchased not because of the nominal coverage, but because of the peace of mind it provides the traveler, like Marietta highlighted in last week’s post Should I Buy Travel Insurance?
As with all of our recommendations to our clients, there is no one-size-fits-all plan. Sometimes travel insurance makes sense, sometimes it doesn’t.
Kailie Abascal, CFP®
Associate Financial Planner
Excerpts in this blog post were taken from Scott McMurren’s Alaska Travelgram, posted on February 20th. To see Scott’s full newsletter post, click on the following link: http://www.alaskatravelgram.com/2017/02/20/travel-insurance-know-dont-know/