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Does It Pay To Buy Travel Insurance?

Each mention of the oil leak story in the Gulf brings with it a list of all of the tourist related businesses being affected.  The most notable are the oceanfront resorts that have lost up to 50% of their income, even in cases where there is no oil at all on their beach.  Just as millions of Americans prepare to take their summer vacations, this crisis has caused more than a few to change their plans.  But what about those that bought travel insurance?  You know, that coverage you are always told you should buy just in case.  It turns out that most travel insurance policies do not cover an incident such as the oil leak in the Gulf.  Policy holders are being told that this is not a natural disaster and they do not have a valid claim.  Depending on the travel policy that you purchase, it will cost you between 4 and 8 percent of the total cost of the trip. Considering the cost of travel insurance, and the rare occasions when it is collected on, not compensating people for their Gulf Coast vacations has given the industry a black eye.


Major Travel Insurance Brokers:

Travel Guard

CSA Travel Protection

Travel Insurance, What It Covers

There are no standardized coverage when it comes to travel insurance.  Each policy has its own unique benefits, restrictions, and exclusions.  You should read your policy very carefully to be sure that you fully understand what is covered.  The most comprehensive travel insurance is known as any reason cancellation.  This coverage allows you to cancel your trip for any reason.  No need to be sick, have a loved one die, or be the victim of a natural disaster.  This form of travel insurance is the only one that will likely pay off for those that cancel Gulf Coast vacations due to the oil spill. 

Risks that are covered by Travel Insurance

  • Trip cancellation
  • Medical expense
  • Accidental death, injury or disablement benefit
  • Emergency evacuation
  • Overseas funeral expenses
  • Loss, theft or damage to personal property (including travel documents)
  • Delayed or lost baggage
  • Legal assistance

Common Exclusions:

  • pre-existing medical conditions
  • war or terrorism - but some plans may cover this risk
  • injury or illness caused by alcohol or drug use

I found a great resource section at eHow on Travel Insurance for those that would like to get more information.  I have personally never bought travel insurance, but might consider if I went on one of those very expensive trips overseas.  On my trips to Europe, I considered buying travel coverage but didn’t see the value based on the cost.   I might reconsider that today based on all of the issues involved with overseas travel these days (volcanoes, etc…).  

Have you ever purchased travel insurance?  How did it work out for you?  Please use the comments section below to share your story.  Have a great summer!

Helping you make the most of God’s money!

James L. Paris
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