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Travel insurance is insuring the possibility that someone who has paid in advance for the costs of a vacation will have to forgo taking the vacation because of unforeseen events. Another possibility is that travelers will arrive at their destinations, but then an occurrence prevents them from continuing on with the rest of the trip. If these people purchased travel insurance, these would be the times when it would not be considered an extraneous expense.

But there are also times when travel insurance would not be the best purchase even though the possibility of having to cancel the trip always exists for everyone. Those times may be if there is a low probability that anything will go wrong. How does one decide?

How to Decide If Travel Insurance is Right

In order to determine if someone is going to purchase travel insurance, vacationers have two choices:

1. They have to decide if they would rather lose the cost of the trip if they have to cancel it completely or shorten it.

2. The other alternative is to go on the trip, not experience any mishaps and incur the cost of the insurance.

Whichever option travelers choose will help them decide whether or not they will purchase travel insurance.

When Travel Insurance May Be Necessary

After deciding which of the two groups they fall under in the above considerations, vacationers can ask themselves a few other questions, also. Sometimes, travel insurance will be an absolute necessity, and those times are when:

• The possibility exists that a trip will need to be cancelled because of an unexpected event at work,
• The destination travelers plan to go to is susceptible to terrorist attacks,
• Passports are lost,
• Medical evacuation becomes necessary,
• The possibility exists that the travel company will go bankrupt before the trip,
• They have the need for emergency assistance in a foreign country where they do not speak the language.

When Travel Insurance Is Unnecessary

The two options described above may lead people to believe that travel insurance will be an extraneous expense for them. But taking a further examination may lead them to conclude that travel insurance actually may not be something they have to purchase. Those instances when it may not essential are when:

• Traveling domestically,
• Traveling on frequent flier miles,
• Tourists will not be staying in a hotel,
• No one has a delicate medical condition,
• Doctor’s offices and hospitals are in abundance,
• Adventurers will, most likely, not have to cancel their trips due to their work schedules,
• Tourists have an active health insurance policy for the United States,
• Voyagers are unconcerned about whether or not their baggage arrives at the destination,
• Missing a connecting flight will not interfere with their plans,
• Tourists are not going to rent a car,
• Travelers already have a life insurance policy and are unconcerned about missing work if they are injured in an accident,
• The final destination is not known to experience disasters related to weather,
• Travelers are unconcerned about losing the money they paid for the trip.

Types of Travel Insurance

Travel insurance turns out not to be just one entity; vacationers have the choice to purchase many different kinds of travel insurance, but some types are more essential than others.

Essential Insurance:

1. Trip Cancellation and Interruption Insurance

This insurance covers the cost of the trip and is considered to be essential when the traveler has expended several thousands of dollars. In the event that something happens to the potential travelers and they are not able to go on their trips, they will be forced to forfeit the large sums of money they have already paid.

They also have one other concern. It has been known to happen that the companies from whom tourists purchased their packages went out of business before they had the chance to take their trips. It presents another great reason to purchase trip cancellation and interruption insurance, and is also the reason not to purchase this insurance from the company where they purchased their travel packages; if the company goes away, so will the insurance.

2. Non-Refundable Insurance

Some tickets can be non-refundable. If travelers want to change their flights, they are forced to pay a fee and it can be as much as $100, if not more. If there is a large possibility that travelers will need to make a change in their travel plans, this insurance will help reduce the costs of purchasing another ticket.

Extraneous Travel Insurance:

1. Flight Insurance

This coverage pays a death benefit in the event that the plane on which the policyholder was a passenger crashes. It is not generally recommended that people purchase this type of insurance, because it is a highly expensive policy. A traveler would be able to purchase a term life insurance policy for lower premiums than they can with flight insurance.

2. Trip Cancellation and Interruption Insurance

This insurance is on the essential list, but can also be extraneous. Some people manage to arrange to purchase airline tickets for prices under $100 round trip. These are the times when trip cancellation and interruption insurance is an extraneous purchase, because the amount of the ticket is not worth the amount that must be spent on the insurance.

The conclusion is that travel insurance will either be essential for some tourists or it will be extraneous to others. Some types of insurance, such as trip cancellation and interruption insurance can even be both essential and extraneous depending upon the circumstances. Carefully examining the risks that travelers may be taking will help them determine which group they belong in, and they can make the best decision for their particular situations.

Bethany Johnson is a freelance writer for a site that provides insurance coverage from all the top insurance companies. She loves everything that is related to personal finance and can’t stand to overpay for anything. She can be found running at the local gym if she is not busy working.

Image: xedos4 / FreeDigitalPhotos.net

A travel agent recently commented on an old post on whether we really need travel insurance. She said:

I highly resent the implication that we are “scamming” the public to steamroll our clients into purchasing insurance.

Our post on the issue of travel insurance was pretty balanced, examining reasons why people might not need that insurance but concluding that it was wise to be insured, so I didn’t think the commenter was taking exception to what we had said on the insurance issue. More likely, she was blowing off steam because of things that others had said in other places. But I thought I’d expand on my response to her.

When I travel, I always buy travel insurance. No exceptions. Ever. Read more »

One of the things that almost all travel agents try to sell you with your ticket is travel insurance, and that hasn’t changed now that many airline tickets are sold online. But do you really need travel insurance or is it just a scam to put more money in agents’ pockets.

Travel insurance is useful for active vacationers.

One of the reasons why travel agents often recommend travel insurance is because they earn a nice commission from every policy they sell, but does that mean that the whole idea is worthless? Not at all. As with most things, it’s about getting the right kind of cover at the right time. This is one time when it pays to read the fine print and see what is covered and what is not. And before you do that, there’s some other fine print you should read, on your household insurance policy. Read more »