Booking a flight can take a sizable bite out of your wallet, especially when you're venturing to a distant part of the globe. Often, the last thing passengers want to do is fork over even more money to take out flight insurance.
It's important to keep in mind, though, just how many things can derail your travel plans. You or a loved one could fall ill and miss a flight, weather delays may cause you to miss a connection or the airline can simply lose your luggage. Experts say obtaining insurance coverage can sometimes be a good way of alleviating these worries. The key is knowing when you truly need to buy and when you don't.
Worry-Free Cancellations
One of the most common types of travel insurance is trip cancellation/interruption coverage. With this protection, the insurer reimburses you if you need to cancel your entire trip – or simply the return leg of your trip – for an eligible reason. This may include your own illness as well as the infirmity or death of a loved one. It may also cover certain non-medical events that prevent you from getting to the airport on time.
You may not need cancellation coverage for every flight you take. Travel experts suggest it might be a good idea if, for example, you or your spouse are in relatively poor health and want some security for the ticket – or if either of you has elderly parents. This form of flight insurance may also be a good idea for more expensive trips, where the cost to rebook later is prohibitive.
If you do decide to take out a cancellation policy, you can purchase it directly from an insurer or indirectly through a travel agent or tour operator. Keep in mind that travel agents get a commission when customers buy insurance, so be ready for a hard sell.
Here are some other tips to consider when buying coverage:
Before buying a policy, check your credit card benefits. Some traveler-oriented cards, such as the RBC Rewards Visa Preferred and Chase Sapphire Preferred, give card-holders built-in trip cancellation benefits.
Customizing Your Coverage
In some cases, cancellation coverage may be the only type of policy you consider necessary. However, companies like Travelex and Travel Guard offer comprehensive insurance packages that also cover situations such as emergency medical care and lost baggage. If you have health issues, or need the added protection to sleep well at night, the higher premiums might just be worth it.
There's even an insurance option that focuses just on travel delays and missing baggage for those primarily concerned airline snafus. AirCare, a new service from Berkshire Hathaway Travel Protection, charges a flat rate of $25 to help make sure your trip goes smoothly.
Have a lost bag? AirCare will pay $1,000, which you can have deposited into an electronic account. Miss your connection due to a delayed flight? That's worth $500. If you have an important, time-sensitive trip, that cash can help you book a flight on a different airline, or even get to another nearby airport. The financial benefit really helps you manage that risk better, says BHTP chief operating officer Mike Meeks.
When it comes to baggage, the airline does have some liability. However, companies usually set fairly low caps for how much they'll reimburse you – and they generally pay the depreciated value of items, not the full replacement amount. Some credit cards offer lost luggage benefits, and even some homeowners, renters and personal property insurance policies cover valuables lost in transit. (Also check whether your policy requires you to first file with the airline before it will consider a claim for the balance of what you lost) If you're not covered to your satisfaction by benefits you already have, taking out separate coverage may make sense.
Flight Accident Coverage
There's yet another type of coverage called flight accident insurance, which pays you or your loved ones if you're the victim of a plane wreck. Before shelling out any money on one of these policies, though, consider how unlikely it is that something terrible will happen to your flight. By one estimate, the odds of perishing in a commercial airline crash are 11 million to one.
Coverage could be only for death, or the loss of one or both hands, feet or eyes – and probably does not include returning the injured person or his/her body back home.
It's also worth remembering that flight accident insurance is one of the most common travel benefits in the credit card industry, so you may already be covered.
The Bottom Line
If paying for a new flight or lost valuable is prohibitive, obtaining extra insurance might be a good idea. Just make sure you're not already sufficiently covered by your credit card or another . For more information, see The Basics Of Travel Insurance.
At the time of writing, the author did not have holdings in any of the companies mentioned in this article.