Travel Insurance

Chances are you've seen them—the ads for travel insurance or the box to check (with a hidden "skip" button) to add trip insurance when buying your flight.

Is travel insurance a good deal? Should you buy it? The answer is, of course, as clear as mud: "it depends."

Do I Need It?

The Internet is filled with surprisingly good advice on whether you need travel insurance. A quick Google search on "do I need travel insurance?" turns up several good articles on the first page:

Those pretty much cover the gamut of reasons to buy (or not to buy) travel insurance, so I won't rehash them here.

Here's My Take

What I will do is tell you why and when I, as a frequent traveler who flies anywhere from 50,000 to 100,000 miles a year, buy travel insurance myself.

When I buy travel insurance, I'm NOT looking for what most people think travel insurance is for. I don't really care about delayed baggage or reimbursing my hotels.

Perhaps that's because of my travel style: I don't usually prepay for a lot of things, certainly not big, expensive group tours or cruises. Most of what I book (low-end to mid-range hotels, train tickets, car rentals, and cheap local flights) are things I can easily cancel if need be. I've also been extremely lucky with baggage (and as someone who lived 17 years in Alaska and hauled heavy bags filled with goodies in both directions, I don't share the same aversion to checking bags that many of my fellow frequent travelers do), though I usually at least try to pack a couple changes of clothes in my carry-on in case something does happen. All my travel is leisure, so I'm not worrying about bringing expensive clothes and having to look presentable for meetings.

But in the end, it's because those things are small potatoes compared to the real risks that people should get travel insurance to cover. So my checked bag is delayed and I have to go get a few pairs of socks and underwear—a little bit of a hassle and a few dollars spent. Getting a hundred or five bucks from my travel insurance for my delayed suitcase would be nice, but I've never had it happen and I really don't need it.

What I am concerned about, though, are costs that could well more than bankrupt me.

Ambulances In The Sky Are Expensive

The biggest one is medical evacuation.

Perhaps my sensitivity to that comes from my years in Alaska, where the vast stretches of rural land where neither hospitals nor ambulances nor even roads exist. In many towns and villages around the state, if you need urgent medical attention, your only option is an air ambulance. Even in the big city of Anchorage, with its five major hospitals, I know several people who have been flown to Seattle for treatment that just wasn't available in the state.

The bills I've seen for these flights are staggering: a two-hour-long medevac flight can cost north of $100,000.

And if you don't have something that covers it, you're on the hook for that amount.

Now, I'm not worried about this in most of the United States. The chances of needing an air ambulance flight in the Lower 48 is pretty low: there are hospitals all over the country, and if you need a higher level of care at a better hospital somewhere, there are roads and ambulance services to get you there.

And that brings me to my "when and why": I don't buy travel insurance when traveling domestically, at least outside of rural Alaska and Hawaii. It's when I go overseas that I start looking to cover myself.

I like to think I'm fairly young and more or less healthy. I also have no doubt that there's great healthcare available in pretty much all of the 76 countries I've visited.

But I know that unforeseen things can happen, and there may be a reason, health-insurance-related or otherwise, that it's best to get treated at home. I know two people (one about my age) who had to be evacuated back to the US and whose air ambulance bills stretched north of $200,000 (fortunately, they both had medevac insurance).

I don't want to be faced with the choice of having to pay a huge sum of money to get treated overseas out-of-network or pay a huge sum of money to be evacuated back to the US. So that's the corollary to my "when and why": I buy travel insurance when going overseas, and I make sure it has high limits on medevac coverage.

Other Coverage I Value

Now, medevac coverage comes with many (maybe even most) good, comprehensive trip insurance policies, and those policies usually include other benefits. I'm not going to turn down extra benefits just because I don't prioritize them as reasons to pay for travel insurance. So here are the ones that I've found most beneficial:

  • Car rental collision damage coverage
  • Loss/theft protection
  • Emergency medical insurance

I've been unlucky enough to experience rental car damage in two countries. When I traveled to New Zealand, it was still excluded from coverage by most credit card policies. Of course, it New Zealand where I got a window smashed in. Thankfully, the policy I had bought from Travel Guard stepped up and cut me a check for what I had to pay.

A few years later, I had a bumper smashed in in Cape Town, South Africa. While I had collision coverage on my Travel Guard policy, I had no issues there with my credit card paying me back for that damage. Still, it always feels more secure to have two layers of protection, and so even with credit cards that cover damage, I appreciate the travel insurance policy being there to back me up.

It was that same New Zealand experience that taught me to appreciate theft protection, too. When my window got smashed in, my backpack was stolen, complete with my laptop and passport, among other things. Travel Guard saved the day there, too, and paid me back for every receipt I sent to them—even the temporary passport fee I paid the US consulate in Auckland.

I've thankfully never needed medical attention in the combined year or so I've spent overseas, but while my health care plan at home does include global coverage, it's limited and subject to large deductibles and coinsurance amounts. Since hospitals in Bahrain or Bolivia or Bangladesh won't bill my insurance company, I'd have to front everything myself and then worry about how much—or even if—I'll get reimbursed by my health insurance at home. Travel insurance usually makes that process much more seamless.

What I Do

If I'm going to be spending a lot of time overseas or making multiple trips out of the country, I usually buy an annual policy. For someone in my age range, it's a couple hundred bucks a year or so, and I just chalk it up to the cost of being a travel addict. If (like this year) I'm mostly sticking closer to home, I'll buy a single-trip policy—my recent week in Algeria cost me all of $70 to cover, and I don't have any other overseas travel planned.

As for who: so far, I've only had experience with one company: Travel Guard. They're one of the biggest travel insurance providers out there (and part of a huge insurer, AIG) and at the time I last looked, they were one of the only vendors offering an annual plan that included a good medevac coverage limit (I aim for $500,000). I'll admit I haven't had personal experience with other options, since they didn't have the coverage mix I was looking for, but I can absolutely testify that I've gotten my money's worth out of my Travel Guard policies over the years.

Other Options Worth Considering

The other major player in this space is Allianz, which is the largest travel insurance writer out there. Like I said, I've never had the opportunity to use them, but one of my colleagues at AutoSlash, Rachel, said she had a claim paid out with them and had a good experience. Not to say that other offerings aren't just as good, but you have two experienced travelers here who can vouch for those two companies.

I'm intrigued by one thing I didn't notice until I started writing this post: the American Express Platinum Card includes medical evacuation coverage, as long as you arrange it through their Premium Global Assist Hotline (they'll apparently determine if you actually need it, but if you do, they'll cover it and there's no specific dollar limit). I actually do carry a Platinum Card and have for years, so I may have been buying an annual policy I didn't need. This may be worth some extra research!

One other product I've looked at in the past is GeoBlue Travel Insurance, which is a franchise of the Blue Cross Blue Shield network. It's a little different from most travel insurance in that it focuses only on medevac coverage and extending your health care to overseas providers, but it seems to do those two things pretty well, and when I checked, the premium was about half that of other travel insurance options. The reason I haven't bought it is that it only works outside of the country, and I usually spend a fair bit of each summer in rural Alaska, and I want medical evacuation coverage there.

It's also worth pointing out that most of these insurers will only cover you for a medical flight to the nearest "medically acceptable" facility (and only if a doctor deems it necessary). "Medically acceptable" means "capable of treating your condition," not "who you feel comfortable operating on you" or "works with your insurance" or "close to family who can support you during your stay." I came across a recommendation for Medjet, which apparently offers no-questions-asked transport to the hospital of your choice. It's a good bit more expensive than most other travel insurance policies, but it might be worth looking into.

What About My Bags?

I don't prioritize baggage delay and emergency cancellation coverage enough to pay for, but there are credit cards that include those benefits for free. I'll admit I haven't done a ton of research on that topic myself, and I question whether some of the sources online (like this one) are free of bias, but if you have a mid- or high-end card, it's worth checking the benefits brochure to see what might come with it.

I'd still suggest carrying a spare pair of underwear in your carry-on, though—I once helped a friend try in vain to find clothes that fit when his bag got sent to Timbuktu. Even a credit card offering hundreds of dollars can't make clothes appear out of thin air…

Where To Buy It

When you click that "accept" button on the Expedia or Priceline or United Airlines checkout page, as much as 25% of your premium goes to that site. I always buy my policies directly from the vendor (in my case, Travel Guard), since I can review all of the coverage options and make sure I pick a package that fits my needs. If you have questions or more complicated needs, you might want to find an agent who specializes in travel insurance.

If you do end up deciding to buy a policy, we'd be grateful for your support in helping AutoSlash continue our mission of providing expert travel advice and saving people as much money as possible on their car rentals for free. You can use the following links that get us a very small spiff (not 25%!) and still let you buy directly from the vendors for the best prices:

(I promise that I never let any of AutoSlash's affiliate relationships affect what I write about.)

In Summary

When to buy travel insurance:

  • When you're fronting a significant amount of non-refundable money for a trip
  • When you're traveling in areas where top-quality medical coverage isn't readily available

When to buy travel insurance:

  • When you're fronting a significant amount of non-refundable money for a trip
  • When you're traveling in areas where top-quality medical coverage isn't readily available

When to maybe buy travel insurance:

  • When you want help with the hassle and cost of medical care outside of your home country
  • When you want an extra layer of protection for rental car damage
  • If you really value the help and money it can provide when your travel doesn't go smoothly
  • If you're traveling with valuables that would be painful to replace if stolen

When not to bother with travel insurance:

  • When you're on a cheap domestic trip

Where to buy what we at AutoSlash have had good experiences with:

And of course, it goes without saying that if you want to save money on your rental car rates, you can click here for a quote—it's 100% free!

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