Should I purchase travel insurance?

“Travel is more than the seeing of sights, it is a change that goes on,
deep and permanent, in the ideas of living.”
 Miriam Beard

As a travel agent, we encouraged travel insurance. It was a source of revenue for the office and it increased our totals, which helped us make our goals. But more then that, it made our lives easier if our clients canceled their trip at the last minute, due to illness or other reasons. And then there are the cases where the company canceled, due to bankruptcy. Sometimes insurance will help with that also, but only if the insurance is purchased by a company other then the one you booked with, which now is bankrupt. Also, some insurance policies do not cover bankruptcies, so that is something to think about also.

Oahu, Hawaii

I remember a case that happened to a client of mine, and it was just after 9/11, when many companies were having problems. I had clients who had purchased a cruise of Hawaii. The cruise was with a company that had been in business for many years, a company that we considered reliable. However, in the aftermath of 9/11, many reliable companies had financial problems, and this was one of them. The couple had paid me all in cash, something I had advised them against, but they didn't believe in credit cards, did not have any, and wanted to pay a little each week until it was paid for. They were celebrating their 50^th anniversary, and going to Hawaii had been a dream of theirs.

Kauai

When I got the call that the company was canceling all cruises, it was only 2 weeks from their date. I dreaded calling them to tell them. They had not purchased any insurance. We had several other clients that were sailing with the same company, but they had all purchased insurance with Access America which AAA recommended, so they were covered. These clients were our only uncovered clients. When I told them, they were heartbroken.

Their story did have a somewhat happy ending, only because I worked for a company like AAA. The company that had gone bankrupt was considered one of our preferred companies, and when the higher ups learned that one of our customers was going to lose all their money, they said that they would personally refund their money, and deal with the companies bankruptcies people to get refunded. They gave my couple back their money, and I was able to find them a different cruise company that was within the same month, and we booked them on it. It wasn't exactly the cruise they wanted, and it did cost them more money, because we were booking last minute, but they went to Hawaii for their 50^th anniversary. Id assisted them in getting a AAA Visa card and insisted that they pay for the new cruise with the card. They could pay it off immediately, but the initial payment was on the new charge card.

Tip: Never pay for your travel with cash. Always pay with a credit card. If you do not get what you paid for, you have recourse with the credit card company for a refund. My daughter had an airline go bankrupt the night before her flight to England. She had paid with a credit card, so she was able to call them and they gave her a refund on the flight. That did not help her get to England, but she was out less money.

So, do you need insurance?  I have to say that when I travel I don't always have travel insurance. It depends on the trip, and the cost of it. If I am spending a lot of money, and I will lose it all if I cancel, then I purchase insurance. When I am doing independent travel and the only real upfront cost is the airfare, then I sometimes insure that, and sometimes I don't, depending on how expensive it was. Independent travel means that I have made reservations at hotels and such, but usually those can be canceled right up to the last minute, so no need to insure those. However, if I have booked a tour or a cruise, I purchase the insurance. We are getting older, and could have health issues come up. Also, my mother is 94 years old, and she could certainly have health issues that would cause us to cancel.

 

 

The other thing to think about is that most travel insurance also comes with Trip Interruption, lost baggage coverage and assistance getting you home if you have to leave your destination before you planned. I have had experience with those issues, and travel insurance can be a life saver.  I have had clients that were on a tour and got seriously ill. Getting home on their own would have been terribly expensive, because the last minute tickets to return would have been very high. The insurance took care of that.

Taken from the ferry in Greece

And I personally have used the Trip Interruption portion of travel insurance. We went to Greece in 2007. We left San Diego on a flight to Atlanta. As we approached Atlanta the pilot came on and told us that we were being diverted to Birmingham because of weather conditions. We spent several hours on the ground in Birmingham before finally flying to Atlanta. We arrived in Atlanta around 10PM, but our flight to Athens, Greece had departed at 4PM. Weather had been okay when they departed, but because we were one of nine flights diverted to Birmingham, we did not get permission to fly to Atlanta until it was too late to connect. It was not the airlines fault, so we were on our own. We had to get a hotel for the night in Atlanta, and we were lucky enough to get re-booked to Athens the next day, not everyone was able to get on flights the next day, some had to wait several days. But we lost our first night hotel in Athens. And we had a 3 day cruise booked for our second day in Greece, and when we landed in Athens that day, it was 10AM, and our cruise ship departed at 10AM, so we missed getting on the ship. We took a bus directly to the port and managed to get a ferry to Mykonos, which was its first port, and we boarded it there.

Me in front of the Colisseum
Athens

I had called Access America from the Atlanta airport when I realized that we had not only missed our flight but that we would also miss boarding the ship. They told me to keep all receipts – for hotels (the one in Atlanta and the one in Athens we didn't make it to), all food we ate, anything we had to buy (toothpaste, etc. because we didn't have our luggage in Atlanta), the bus fare, taxi fares, anything we paid money on from the minute we were delayed. I did that, and when I returned from our trip I sent all those receipts with a claim form to the insurance, and within 2 weeks, I was reimbursed for every penny, well over $500. The insurance was certainly a good buy for that trip. *

So, when deciding whether to buy insurance or not, think about the cost of the trip, how much of it would be refundable if you canceled last minute, and can you afford to forfeit that amount if you can't take the trip, for whatever reason? Also, think about the other benefits of insurance, medical coverage, lost baggage, trip assist and trip interruption. They can all be of great benefit, depending on circumstances.


*You can read more about our trip to Greece by going to Trip Reports for Trips we have taken which is in the side column.