Planning a vacation is supposed to be fun, which means many travelers neglect to consider travel insurance. After all, why would you spend your time thinking about the possibility of travel mishaps when you could be selecting itineraries, mapping out walking tours, or deciding which tropical drinks you’ll be enjoying on the beach?
But just like any other plans, vacations can go seriously awry, leaving you with a stressful situation rather than a relaxing respite. If you are out all of the money you spent on the vacation and forced to spend additional funds to get home, you may decide never to leave home again.
If you are traveling sometime this year, you might want to consider protecting yourself financially in case of vacation disaster with one of these options:
Travel Insurance Through Your Credit Card
If you purchase your travel using a credit card, you will often be offered some sort of travel insurance as a perk of using the card. Credit cards offer insurance on anything from rental car collision to trip cancellation to fatal travel accidents to lost luggage.
However, the insurance offered by credit cards should be considered a secondary form of travel insurance, since there are many rules, exclusions, and coverage holes in the average credit card travel insurance package. And the most common need for travel insurance—covering a cancellation due to illness or family emergency—is only covered by 15% of credit cards.
In addition, credit cards do not offer medical or evacuation coverage. For those traveling abroad or on a cruise, this is an important exclusion to note. If you were to fall ill or be injured outside of the United States, you could potentially be on the hook for your medical care and emergency flight back home.
This offers you a refund for the price of the trip should you be unable to take it. Generally, cancellation insurance costs 5%-10% of the price of the trip.
For travelers taking a structured vacation—like a cruise or a tour—the company will often offer a cancellation waiver. Waiver prices vary from company to company, but they are generally much lower than cancellation insurance. The waiver is similar to cancellation insurance, but it has a number of restrictions, including a prohibition on canceling your trip at the last minute. Unfortunately, that is when most vacations need to be cancelled.
The typical timeframe for canceling a cruise for a full refund is more than 75 days before the ship sails. After that point, you could lose up to 75% of your purchase price—or the entire purchase price if you cancel within two weeks of the sail date.
Adding 5%-10% to the price of your trip could help you rest easy that your vacation won’t be an expensive empty room on a cruise ship.
Personal Effects Coverage
This is one type of travel insurance that most vacationers probably don’t need. Often, your renter’s or homeowner’s insurance will cover the loss of your possessions, no matter where those possessions happen to be in the world.
However, if you’re traveling with a great deal of expensive photography equipment, sports gear, or your heirloom jewelry, it might be worth your while to purchase an endorsement to your existing homeowner’s policy to cover those items while you are traveling. The endorsement will cost you less than a travel-specific personal effects insurance policy, and it will protect your valuables just as well.
Travel Medical Insurance
In many cases, your medical insurance will cover some or even all of any medical emergency you have while away from home. However, each policy is different, and it’s a good idea to go over your policy and figure out what is and is not covered. For instance, you may be covered for an extended stay in a foreign hospital, but you might have to pay upfront and be reimbursed.
It’s generally a good idea to purchase travel medical insurance any time you are traveling abroad or are planning an active vacation.
What Will You Need to Relax on Vacation?
The odds that something catastrophic will happen to you on vacation are pretty low. But minor problems can be expected, and only you know how badly such minor problems will affect your budget. Additionally, it’s up to you to decide how much insurance is necessary to bridge the gap between the coverage you already have and the reassurance you need to be able to enjoy your vacation without worrying.