Don’t forget to pack some trip protection, insurance
Policies provided by credit card carriers can help to absorb some unexpected travel costs
The biggest benefit of purchasing travel insurance is covering medical emergencies far from home.
Nothing can make up for a ruined vacation that was months in the making. But for Southwest Airlines customers whose flights were canceled last weekend, the costs of missed trips and being stranded were calculable. h Southwest offered refunds and travel vouchers, along with apologies, but many travelers had to pay for additional accommodations, meals and car rentals out of pocket. h “There’s always some amount of uncertainty or risk in travel either medically, financially, personal reasons,” Jeremy Murchland, president of Seven Corners travel insurance. “If you can’t afford to lose all the money you’ve invested in your trip, then consider travel insurance.”
Travel insurance and trip protection, provided by credit card carriers, can help absorb some of those unexpected costs.
How does credit card trip protection work?
Independent personal finance expert Matt Granite, known as The Deal Guy on YouTube, recommends that most travelers stick with the trip protection major credit cards provide when they’re used to purchase travel.
“Look through the coverage that you might already have on your credit card,” he said. “A lot of us have great credit cards, and we are (only) using 2% of the features available to us, including lost luggage and all sorts of reimbursement issues.”
Granite recommends using a credit card connected with a hotel or airline because of the added benefits included with those types of cards.
Granite generally does not recommend purchasing separate travel insurance, unless travelers have medical concerns traveling abroad.
Why would I buy travel insurance?
The biggest benefit of purchasing travel insurance is covering medical emergencies far from home.
“I tell people that it’s good to have the insurance to get your money back when you have to cancel (a trip), but it’s really good to have it if you get really hurt or sick some place and need to come back on an air ambulance,” said Daniel Durazo, director of Marketing and Communications for Allianz travel insurance.
What does travel insurance cover?
Jeremy Murchland with Seven Corners said most insurance companies
and policies now include COVID-19 coverage, but advises travelers to look closely at plans for details.
“You want to make sure you understand what type of interruption coverage or quarantine coverage you may have in the event that you travel and come down with COVID,” he said.
While plans vary, other common coverage areas include trip cancellations, interruptions and significant delays as well as medical expenses, lost baggage, theft and change fees.
What is not covered by travel insurance?
There are caps to reimbursements, which can range widely.
“No insurance product is going to give you an unlimited amount of
coverage because there would be no way to figure out how much to charge the consumer,” Durazo said.
He said with significant delays like those Southwest customers experienced, Allianz’s most popular plan would limit daily benefits to $200 per person, per day for up to four days. The total would grow with each traveler included in the policy.
Limitations also depend on the type of travel insurance purchased.
Named-perils insurance is generally cheaper and has more exclusions. It would not compensate travelers who cancel trips because they fear contracting COVID-19 if cases spike at their destination or if the CDC and State Department advise against travel.
As the name implies, cancel-for-any-reason plans offer more flexibility and cost more.
“If you cancel your trip for a reason that’s covered by the policy, you’ll get 100% of your money back for your prepaid nonrefundable trip deposits,” Durazo said. “But if you cancel for another reason, such as ‘I just don’t want to go,’ then you’ll get 80% back of your nonrefundable prepaid deposits so the consumer has a little bit of skin in the game.”
How do I choose?
Granite recommends comparing plans and providers on SquareMouth and InsureMyTrip.
“They are independent, third-party websites that will allow you to see the cost of insurance, side-byside compared to different policies,” he said.
Murchland and Durazo recommend reading terms closely and asking questions. “Insurance is a complicated thing,” Murchland said. “I don’t care if it’s auto, homeowners, what type of insurance it is, we recommend you call in and talk to a licensed agent when you’re buying the insurance so they can answer your questions and make sure you get the right thing.”