The pros and cons of purchasing travel insurance

Carnival Cruise Sep 2011 - Legend

The Carnival Cruise ship Triumph will from now on be associated with travel nightmares. Image: Fifth World Art/Flickr/CC BY

The recent nightmare suffered by passengers aboard the Carnival cruise ship Triumph has put a spotlight back on travel insurance. When is it a good idea to insure your travels, and when is it a waste of your resources?

Buying ‘peace of mind’ with travel insurance

Like any kind of insurance, it is a safeguard against the unexpected. Insurance never pays off unless something goes terribly wrong, which is not something anybody wants to bet on. However, life being the risky venture it is, sometimes it is better to be safe than sorry.

Thomas Nulty, former president of corporate travel agent Navigant International, said that people who purchase travel insurance are “buying peace of mind.”

Trip cut short or cancelled

Travel insurance can be a god send if, for some unforeseen reason, travel plans need to be cancelled or cut short at the last moment. Insured travelers can generally be reimbursed for any expenditures already paid if the cancellation is for a legitimate reason covered in the policy.

Inclement weather, natural disasters and political unrest are upsetting travel plans at an increasing pace in our troubled world. According to the U.S. Travel Insurance Association, since 2010, about 12.5 percent of all adult U.S. travelers had to cancel or truncate their travels due to such factors. Less than a third of those travelers had travel insurance policies.

When to buy, when not to buy, that is the question

The general consensus among travel insurance providers is that travel insurance is a probably a good idea when going overseas, booking a cruise or when enough money is at stake to make the purchase prudent. According to Pam Seagle, owner of Travel Leaders in High Point, N.C., that cut-off point is $1,000.

However, according to MarketWatch, “If you’re flying domestically on a discount carrier, your investment might not be worth the extra cost to cover a cancellation, delay or interruption.”

The cost of travel insurance

The cost of a travel insurance policy varies, but it can be quite reasonable. CBS affiliate WCCO in Minneapolis, Minn., priced insurance on a $1,800 trip with $5,000 coverage for medical expenses and $15,000 of emergency evacuation. That, says WCCO, can be had for just $59.

Seagle says her company bases travel insurance rates on the age of the travelers and the cost of the trip. For a family of four, she says, the cost is generally around $200. She added that the cost is “well worth” the peace of mind that Nulty said is the true value of buying travel insurance in the first place.

Disappearing luggage

Another benefit of travel insurance is that it generally covers any luggage lost by airlines. Who hasn’t dealt with that nightmare a time or two?




Previous Article

« Debate continues over state income taxes, sales taxes


No one likes taxes, but do like to have the benefits they provide. There’s been an ongoing tug of war over whether state income taxes are better than sales taxes, with a mixed bag of things for and against both methods of getting the public to pony up. State income taxes [...]

Next Article

Debt rate falls for young adults, but not a good sign »

college fund

A recent study found that, in the last decade, the debt rate has decreased dramatically for American young adults. While that sounds encouraging on the surface, in fact it reveals a troubling economic trend. The reason for the decline is that the bulk of young adults just have too few [...]