Travel agents, insurers and consumer experts agree that trip insurance can be worthwhile in the cases of expensive prepaid vacations, and in cases where the health of the traveler or a family member is in doubt.
But make sure the policy your travel agent is selling actually covers the specifics of your trip and situation. Read the fine print!
For example, most trip insurance refund deposits, prepaid tickets and other losses when a trip is canceled, delayed or interrupted. In addition, coverage usually includes baggage protection and emergency medical assistance and evacuation. Many policies also provide reimbursement if:
- the traveler, and sometimes a traveling companion miss a trip due to illness, accident, jury duty or fire at the traveler's home;
- the airline, cruise line, railroad or tour operator goes broke or suffers a labor strike; or
- a terrorist attack has occurred at the point of destination within a certain number of days of the departure.
Be aware of the conditions of coverage in these policies. For example, many policies do not provide coverage:
- for illness due to complications from pregnancy or mental illness;
- for accidents from mountain climbing, motor sports, scuba diving below 130 feet or amateur sporting events;
- if an accident that prevents the traveler from going on the trip is not reported to the insurer within a required period of time;
- when the traveler is called up for military duty;
- when the State Department issues a warning to avoid a certain country;
- when there is a natural disaster or impending natural disaster such as a wildfire, a hurricane, a tornado, etc., unless the airport is closed down or the city has been evacuated.
Policy premiums are partially based on the age of the traveler and can vary the cost of the policy by 5-10%. The cost of trip insurance for a $5,000 trip can vary from $146 to $350.
Read and understand the policy before you purchase it. Be especially aware of the limitations and exclusions written into it. These policies are not comprehensive, all-inclusive policies.