Travel Insurance

Why Your Trip Participants Should Have It (and Not)

When you book a winter vacation you will be offered travel insurance. Even though this insurance is "optional," it is likely that you will be required to sign a waiver in which you personally accept full financial responsibility if you elect not to purchase it.

What is Travel Insurance?

All insurance is a means of protecting yourself against the cost of risks you cannot afford to pay yourself. Travel involves two big-dollar risks for which insurance may be worthwhile: (1) protection against cancellation penalties and, (2) for emergency medical evacuation.

Do you need insurance for a ski trip? The answer is yes, as much as you need it for any other travel.

Insurance That You Definitely Do Need

Trip Cancellation Insurance
Almost every travel supplier has "fine print" penalties for canceling trip arrangements. Cancellation penalties typically become steeper as the departure date nears.

Of particular relevance are non-refundable airfares. The airlines are enforcing more strict rules with greater vigilance. The readily obtained doctor's certificate is no longer sufficient evidence. You have to be in the hospital, or dead, to obtain a refund.

Particularly, during holidays and periods of high demand canceled lodging arrangements can be an even bigger risk.

Contrary to common belief, several of the most common reasons for canceling a trip are almost never covered by insurance. You may receive some sympathy, but no compensation, when you cancel due to a change of mind, a change in financial circumstances, or because of business obligations. These reasons simply are not covered in most policies. In addition, pre-existing medical conditions may be excluded.

Emergency Medical Evacuation
What happens if you have a severe accident or become ill in an area lacking adequate medical facilities? You may have to be evacuated to a distant medical facility. Even evacuation to nearby facilities can be very expensive if a helicopter is needed. You can suffer a heavy monetary cost, perhaps several thousands of dollars' worth, not covered by your regular medical insurance.

If you travel overseas this risk is even higher. A broken bone can involve extending your stay, while the rest of your traveling party returns home. As a minimum, returning on a later scheduled flight will be an extra cost. In addition, it may require a long ambulance transfer and purchasing more than one seat. Stretcher cases require purchasing several seats plus an attendant's cost.

top ^

Insurance That You May Not Need

With most travel insurance plans, the cost for all benefits is linked to the cancellation component, increasing with the cost of the trip. Many travel insurance policies include benefits for medical, accident, theft, delay/overbooking, and airline flight accidents. Often these are "bundled" together with the key components. If you have to pay extra for them, it may not be worth the money. You probably do not need them.

Medical Costs
Most travelers are covered by their own health insurance for medical costs, even if incurred away from home, even overseas. It is wise to check with your medical insurance provider.

Even if your medical insurance does cover overseas exposure, just as at home the deductible and co-insurance clauses in typical plans can amount to a lot of money and often the maximum amount of coverage is limited. Short-term, supplemental vacation insurance can pay for losses which exceed the coverage provided by annual medical policies.

Baggage & Personal Effects Insurance
If you really need property insurance, you need it year-round, not just when you travel. It is likely that your homeowner's or tenant's insurance covers loss, theft, or damage to your personal effects, even when you travel.

Again, after the deductible has been met, you may receive little, if any, reimbursement. Supplemental Vacation Insurance can pay for losses which exceed the liability of homeowner or tenant policies.

Delays and Overbooking
The costs of delay or overbooking may be covered by the airlines, and are a relatively minor expenditure if not. Airline flight insurance is a grossly overpriced type of accident insurance that preys upon people's fear of flying.

top ^