Erin Balon has scores of photos to remember her most recent vacation. She also has some paperwork to remember it.
According to 2014 data gathered by the US Travel Insurance Association, 23% Americans said their travel plans were impacted by unforeseen problems. That’s exactly what happened to Erin.
A three-week motorcycle tour of Africa was delayed because her baggage, containing necessary motorcycle safety gear, arrived late. The good news for her: She had travel insurance.
The most recent figures from the US Travel Insurance Association in 2014 show that 33.4 million Americans were covered by travel protection policies.
For Erin, this marks the second time she has had to make a claim using travel insurance. Her first experience also involved a trip to Africa. She says the process of filing the necessary paperwork and getting reimbursed was surprisingly easy, “They sent me a check. It was really hassle free”.
Insuring herself for two trips, she estimates she has spent less than $400. Since she actually had to file claims, she estimates that having travel insurance saved her more than $5,000. For certain trips, she says insurance is now a must for her, “If I go internationally I always get it. If I am going domestically I don’t buy it.”
Consider travel insurance for trips totaling more than about $450, says Rick Seaney of farecompare.com.
“As long as it’s 10% or less of the total ticket price”. He adds that if you want to lock in a good fare, you can book it first and then shop for travel insurance after you book.
But with car rentals, he cautions, you should know in advance whether you’re already adequately covered by your auto insurance and credit card. That may involve reading some fine print and making some phone calls.
Seaney says the effort is worth it.
“You’re going to sign a waiver and when you do you are on the hook for that car”.
Seaney and other experts say it’s best to make up your mind before you arrive and are offered coverage at the counter, which can be more expensive than the cost of the rental.
“Those people behind the counter get a commission for selling you that.”
The rule of thumb: Doing some research before you travel goes a long way toward helping you rest and relax when the time comes.
Here's more information from Jeff Reeves for USA Today:
Types of Travel Insurance Coverage
The good news is that providers offer a menu of services, from which consumers pick and choose.
Some of the most common options:
•Medical. If you have ever come down with a bad stomach bug and got frustrated locating a gastroenterologist in your hometown, just imagine that search in the jungles of Cambodia. Medical travel insurance can help provide coverage to limit out-of-pocket costs.
•Evacuation. If you're abroad and must deal with a natural disaster or political unrest, getting to a safe place in a strange land is a harrowing experience. It can also be incredibly expensive. Travel insurance can help cover the cost of getting out of harm's way.
•Cancellation. More painful than suffering a last-minute injury that ruins your trip can be the realization that you can't get back the big bucks you paid for travel arrangements or a tour. This kind of travel insurance also covers cancellations due to other problems, including if your tour provider goes bankrupt or an airline delay causes you to miss your event.
•Baggage. Nothing ruins a vacation faster than lost, damaged or stolen luggage. But at least being covered will provide some reimbursement for that new bathing suit you're forced to buy upon arrival.
•Death and dismemberment. Similar to typical life insurance, this option provides your heirs with a payout should you die during your trip.
Should You Buy Travel Insurance?
If you're a worrier, it's difficult to put a price tag on peace of mind. But even the most nervous of travelers should think twice about certain areas of travel insurance, because the benefits are extremely limited or because you may be covered elsewhere.
The easiest one to pass on is death coverage, sometimes referred to as "crash insurance." Plane crashes are so rare that even a small charge for this kind of coverage isn't worth it. Besides, if you're a young parent truly worried about your own mortality, a good term life insurance policy is probably the way to go.
A bit more complicated but worth looking into is the question of whether you are already covered.
Dig into the details of your destination with your health insurer. I was encouraged to learn that my personal CareFirst insurance would cover me at about 60 different hospitals around Antwerp, Belgium. Good to know for when I plan my European tour!
It's also worth exploring any insurance coverage you may have as part of your credit card. American Express is well-known for its perks, for instance, and some premium cards offer coverage for lost luggage or flight cancellations — as long as you swipe your AmEx to pay for the trip, of course.
Then there's the question of just what you're insuring.
For instance, the U.S. Department of Transportation limits lost baggage claims to $3,300 — and when airlines do reimburse you, it always accounts for depreciation. So your skis or golf clubs may be worth covering with travel insurance. But a small bag with a bikini and sandals? Maybe not.
The same is true for medical insurance or evacuation. If you're going bungee jumping, it might be wise to take out some extra insurance — and some providers have a specific clause for "adventure sports." But if your worst risk is not applying enough sunblock at the beach, that's a different story.
How to Buy Travel Insurance
Rates can vary widely. Thankfully, many websites offer easy-to-surf ways to quickly compare coverage and costs.
Two of the big ones to check out are SquareMouth.com and InsureMyTrip.com, which are like online travel sites that aggregate a bunch of different options form third parties and leave it up to you to pick. You can screen for extremely comprehensive coverage, or simply select the areas you're interested in. For example, if you're roughing it in the wilds of South America, you might not fret about cancellations or your luggage, and only want coverage for emergency medical transportation. It's much cheaper to pick and choose custom coverage this way.
Another option is WorldNomads.com, where you can quickly get pricing for a comprehensive package by typing in info about your trip. You don't get to pick and choose your coverage areas or limits. However, as a basic package, the trip insurance is pretty affordable.
Another option, of course, is to buy travel insurance from your travel agent. But keep in mind that these folks often get a commission, increasing the cost to you, and you may be limited to only the options they have instead of the coverage you need.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks.