Imagine you’re sitting on a beach with your partner in Costa Rica. You have a pina colada in one hand and your favorite book in the other. The sun feels warm against your skin and the salty air is refreshing. This is paradise. Suddenly, you receive a text. Your return flight has been cancelled due to bad weather and you are not getting a refund. You’re stranded. And although it is better to be stranded on a beautiful sandy beach rather than a desert island you still have work tomorrow, you have no place to stay, and you are quickly running out of money. What could have prevented this series of unfortunate events?
When booking a trip, many travelers don’t even think about adding travel insurance to their trip, assuming that nothing could possibly go wrong. The reality is, however, that it could and it often does.
To further illustrate the point, we interviewed travel experts as well as experienced travelers about why they think travel insurance is important and to get some of their horror stories and travel fiasco silver linings.
Why is travel insurance important?
Phil Sylvester, World Nomads’ travel safety expert, had advice on why to get travel insurance and what it covers. World Nomads has been in business since 2002 and has covered and worked with many travelers. The company has seen the benefits of travel insurance and has heard its fair share of horror stories from travelers who opted not to get travel insurance.
Sylvester shares his expertise:
“No matter what destination or type of vacation, we recommend travel insurance because you never know what may go wrong, and although travel insurance typically consists of four components:
- medical costs and emergency medical evacuation
- loss or theft of belongings
- trip cancellation and travel delay
- recoup unexpected additional expenses
The most important benefit is the medical costs and medical evacuation (the others are just icing on the cake). First and foremost, you have to think about the value: Buying an insurance policy for a couple of hundred dollars is better than paying $100,000 out-of-pocket for a medical evacuation plus hospital bills.
Even in countries where the medical and hospital system is considered cheap, the bills can run into many thousands of dollars for complex cases. All it takes is a vehicle accident and some serious injuries that need serious treatment.
I understand the reticence some people may have. We often hear the complaint, ‘I've had travel insurance for years, and I've never made a claim. It's a waste of money.’ But few people say that about vehicle insurance or home insurance. The risk in those circumstances is understood. Travel is no different, about 10 percent of our customers make a claim, so extrapolating from that, it's fair to assume 10 percent of all travelers get into some sort of circumstance that requires travel insurance — cancellation, travel delay, lost or stolen luggage, ill health, a terrorist incident, industrial action, or a good old natural disaster.
Travel insurance is for unforeseen circumstances, and sadly those circumstances often have unpredictable outcomes and immeasurable costs associated with them.”
Lora Pope shared a personal account where she wished she had purchased travel insurance beforehand. Pope remarks, “I was traveling in Iceland, and did not buy travel insurance to protect my belongings as it's one of the safest countries in the world, and I figured the risk was so low. But unfortunately, my Airbnb was burgled while I was out, and all my personal belongings were stolen. Because I didn't have travel insurance, nothing was covered. I wish I had it!”
Anthony Bianco, a travel blogger with years of travel experience, said, “For me personally, I don't really care about insurance for lost items etc, even though it's nice to have. What I really do care about is if something happens to me like getting hurt or injured and I need to get back home as soon as possible, or I require treatment in a decent medical facility.”
Lisa Dorenfest had an experience in New Zealand where she was thankful for her medical coverage abroad. She said, “While sailing New Zealand, I required an unplanned outpatient medical procedure. Not a trauma situation, but one that required urgent attention. Without travel insurance, I would have incurred significant expense paying for the procedure locally or trip delays and expenses to fund a trip to the United States where I am covered by a primary insurance plan. I paid upfront and was reimbursed for diagnostics and surgical procedures six months later at the conclusion of the insurer’s due diligence. I was able to renew my insurance the following year without increase in premium.”
Ben Packard, the CEO of Thrifty Points, a site that helps travelers everywhere travel for cheap, says, “Travel insurance is increasingly important these days for a variety of reasons. One of the biggest ones that I've been seeing lately revolves around the creation of new ticket levels. Airlines have started offering options like Basic, Basic Plus, Economy, EconomyFlex (as examples) with the intention of making basic level tickets more accessible to people who don't have a huge budget. The problem is that at the lower levels, there is no way to change, transfer, or cancel a ticket without sacrificing it. Travelers who are trying to save a few dollars on airfare suddenly find themselves with a ticket they can't lose if something, anything comes up. There have even been cases in Canada where airlines aren't allowing tickets to be refunded when the ticket holder dies.
A good travel insurance package covers this, without adding much to the cost of the ticket. Travelers get the benefits of the lowest ticket price and can rest easy knowing that if something comes up, they're covered.”
Brett Holzhauer from FinanceBuzz, shared an experience of how he learned this truth first hand: “A few weeks ago my wife and I were traveling from New Zealand to Australia, and Virgin Australia had to cancel our flight due to weather. Because it was weather-related, Virgin Australia could not offer us any compensation. We did not have travel insurance through the credit card we booked our flights, so we had to pay for an extra hotel night, miss our first hotel night in Australia, pay for an extra day of a rental car, and a few other ancillary out-of-pocket costs. We have never had a flight completely cancelled, so we learned our lesson the hard way.”
Kate Sullivan, from Otis Travel, claims, “For some folks, you don't need separate travel insurance. Many credit cards and a lot of roadside assistance programs offer built-in travel insurance for no extra cost, or at a very low rate. AAA, for example, offers very affordable travel insurance to members.
If you book with an eligible credit card, you may already be covered. Most higher-end credit cards (think things like Preferred, Platinum, Sapphire, etc) offer a range of travel insurance just for using the card to book your tickets — no extra fees! You'll have interruption, cancellation, luggage delay, and trip delay protection built right in.”
Saurabh from Talk Travel, explains that, “Travel insurance provides protection and support in case of any emergency and makes your travel more safe and secure. This could be for anything — health, theft, loss, hired/rental cars etc (depending on the type of insurance you buy).”
On her travels, Jennifer Melroy had an experience where her car protection abroad was key. She says, “It was a cold winter day in Snæfellsjökull National Park of Iceland, and I hit a patch of black ice and slid into a guard rail. I walked away from the accident without injury, but the car had $1,800 of damage done to it. Thankfully, I had travel insurance on that trip. The insurance reimbursed me for the entire bill. I don't know what I would have done without it.”
Sullivan has observed the importance of travel insurance and shares a client’s travel story. “In general, if our clients are considering travel insurance, I suggest that they check with their credit card first. If they aren't automatically covered, I recommend purchasing additional protection if:
- They're traveling somewhere that could experience political or economic disruptions
- They or a loved one has a medical condition that could disrupt or delay the trip
- It's a trip of a lifetime — something long or very expensive that would be absolutely ruined by a glitch in travel plans
For example, one of our clients booked a major trip to Sri Lanka last spring, which was unfortunately made impossible due to the Easter bombings in that country. There's no way anyone could have predicted the terror attacks, and most travel and tourism companies shut down travel into the country. Thanks to the travel insurance our client had taken out, she was able to get refunds on her hotel and other bookings. And now she is going to Azerbaijan this summer!”
Jared Weitz adds that, “Travel insurance is key when you are adventuring to a remote location, like scuba diving in Thailand or mountaineering in Peru. If you plan to trek in the wilderness or do extreme sports while on vacation, having travel insurance is key for medical reasons. If something goes wrong and you injure yourself in a remote location, covering medical expenses can be very costly. Comprehensive travel insurance will help you avoid the out-of-pocket expenses that come with an international hospital visit or other unforeseen expenses. Most medical insurance will cover reasonable hospital costs abroad, but if you run into a serious problem or need quick medical aid in a small town, having travel insurance is going to save you in the event something unfortunate happens”
Kalve Rudoloph, from Auto Insurance EZ, shared his experience during his trip to Indonesia: “Earlier this fall, while working abroad in Indonesia, I was cooking dinner using some of the pretty blunt knives at my Airbnb. As I was chopping some ginger for a stir fry, my knife slipped and took off a considerable chunk of my left index finger. After an hour, the bleeding was still quite intense, and I realized I needed to seek medical attention. Again, thanks to my travelers insurance, this was totally stress-free. I went to a local clinic, got my hand expertly bandaged, and was scheduled for three more visits over the next two weeks. By the end, the cost of doctors, nurses and medication ran me over $650. I sent my documentation in and within two weeks had the money deposited into my account.
I can’t say enough how important it is to be covered. Though I’ve only experienced, luckily, minor emergencies, the chance of anything more serious happening is just as high. Knowing if anything happens, I will have funds to be medivaced home, have my bills paid, and not end up in colossal debt—priceless.”
Mitch Glass, a travel blogger with years of international travel experiences says, “Many people forego travel insurance, thinking that if they're careful, nothing bad will happen to them on vacation. This is a bad move. The thing about travel is, there are many things outside your control—crazy taxi drivers, tainted food, faulty equipment...the list goes on. It doesn't matter how careful you are. Accidents happen. I've had to use travel insurance four times during my travels. A minor motorcycle accident, a lung infection, a (misdiagnosed) blood clot, and a wicked stomach infection from a sip of bad water that put me out of commission for an entire month. All in all, it's saved me several thousand dollars in medical bills.”
Jolene Huitron, from Huitron Travel Group, shared her clients experiences: “A couple were going on a cruise leaving from New York. They live about 45 minutes from the port. I insisted they get travel insurance and they refused. On the way to the port (already running late due to traffic), they got a flat tire. They missed the ship and were out the money for the cruise.
Another situation involved a family of four. They were planning on driving down to Orlando for a Disney vacation. I insisted on travel insurance but they refused saying that they were driving and that it would be fine. Their van broke down on the drive. Not only did it take two days to fix, but they also spent all their vacation money on the repairs.”
Pre-existing medical issues
Anthony Bianco from the Travel Tart, an expert travel blog, says, “In regards to pre-existing conditions, it's always best to upfront and honest about them because if you don't declare them and then have to make a claim, you most likely won't be covered. A lot of the time, pre-existing conditions can be covered at no additional cost, or for a slightly increased cost depending on what the condition is. It's all about risk based on hard data on what actually happens to travellers — this is how premiums are calculated. The higher the risk, the higher the premium.
These days, people are now living old enough to have pre-existing conditions. When you start getting past 50, statistically speaking, this is when things start to go wrong physically. Some of those conditions include previous history of heart attack, an existing cancer, etc. The bottom line is to declare everything that you know of, which means you're being upfront and transparent.”
Brad Emery, CEO of Aimviva Travel Club, shared his personal experience: “I went to the famous Bumrungrad hospital in Bangkok to have some lumps removed. It turned out that one lump was not just an aesthetic issue — I had an umbilical hernia.
The doctor prodded it, and I passed out with the pain. When I came to, he explained that I couldn’t leave the hospital and asked whether I had insurance. Fortunately, I did. I had an annual plan that came with a card, and the company had direct billing with Bumrungrad. Through this experience, I had to pay $5,000 USD. Later, I had a nice smiley scar on my navel and wasn’t allowed in the pool all holiday. I didn’t even have to put it on a credit card as the insurer paid the hospital directly.”
Should I get travel insurance?
On your next vacation, consider travel insurance. Travel insurance covers a large variety of different accidents and situations that could occur on your next trip and can help plan for the unforseeable. If nothing else, travel insurance provides you with peace of mind so you can lay on the beach, drink a pina colada, and read your favorite book knowing that you're covered and that everything is going to be just fine.