Travel insurance: is it worthwhile?

Although the term travel insurance can include coverage for a traveller taking a holiday, it can also refer to coverage of the trip itself. Possible coverage under travel insurance can include:

• medical coverage for emergencies, accidents, injuries, and sudden illnesses while travelling (sometimes but not always including pre-existing conditions);
  
• additional coverage for dangerous or adventurous activities, such as rock climbing or jet skiing;
  
• personal liability and legal coverage for lawsuits incurred while abroad;
  
• lost or stolen possessions, including travel documentation such as passports and tickets as well as cameras and laptops;
  
• trip cancellation or curtailment, should something unavoidable happen to cut the holiday short, such as an approaching hurricane or a fire or other emergency at home;
  
• financial protection should the travel carrier declare bankruptcy; and
  
• 24-hour emergency assistance.

All of this coverage, of course, carries a price tag, which can easily reach several hundred dollars per trip, although this can be reduced for frequent travellers with the purchase of annual multi-trip insurance. Does one really need all this coverage? The answer is—perhaps.

Most people carry insurance of various sorts, including life insurance, home or renter’s insurance, and auto and driving liability. Some of this existing coverage will stretch to include travelling, either overseas or during a domestic journey; however, some of it halts at the international border, and only a reading of the fine print or a meeting with one’s insurance agent can identify which is which.

Before opening the wallet to invest in coverage to fill in potential gaps, it’s wise to consider that many credit cards include some sort of travel insurance as part of their rewards programmes, particularly gold, platinum, and other “prestige” cards such as American Express or Diner’s Club, with the higher-dollar cards carrying more extensive travel coverage. Again, the details of this coverage should be perused and compared to other existing policies, to identify any shortfalls prior to making an expensive and possibly unnecessary purchase.

It’s also wise to remember that, in the field of insurance, more is not necessarily better. Adding rental car liability atop one’s own auto insurance can lead, not to additional coverage, but to two insurance companies wrangling over which is responsible for any accidents that occur.

When considering a la carte policies for gaps in one’s coverage, take a long slow look at what coverage one is more likely to need. Health or medical insurance may be a wise investment for visiting countries without subsidized health care, such as the United States, where treatment can be excellent but frantically expensive (and be certain to check for coverage for pre-existing conditions, if any). If the holiday includes something dangerous, such as an excursion to Mount Kilimanjaro or swimming with the sharks off Mexico, consider a rider for medical evacuation, not often needed but prohibitively expensive when it is.

Certain misfortunes are generally not covered by travel insurance or any other policy, including drink- or drug-related incidents or anything of a criminal nature, even if performed in play. Losses or thefts of possessions caused by carelessness, such as leaving a passport in plain view or forgetting to lock the rental car, are also not likely to be honoured.

Article correct at its author date: May 2007. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

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