How does travel insurance work?

[FPDocMatt]

How does travel insurance work? Do I need it?

Looks like it's for people who get caught in rush hour traffic on the way to the airport, or lose their luggage. Is that right? Surely it's not for people who just decide to cancel their trip on a whim; no insurance company would stay in business if that were the case. So I presume you have to furnish some sort of proof that the mishap was unavoidable...?

Sounds like a reasonable purchase, and I'm happy to make it. Just would like to know more.

Thanks!

 

[diversteve]

Or people who get their trip cancelled due to a hurricane or other natural phenomenon. I buy it when traveling anywhere in/thru the Hurricane belt during the season.
Or get injured/fall ill prior to their planned trip.

Other reasons why you may want to consider it: U.S. DIVE TRAVEL: Best Travel Insurance Plans.

If you're a DAN member they sell it.

 

[boulderjohn]

I have mixed feelings about it.

In travel insurance, you pay a percentage (IMO, a high one) of your total costs so that you will be reimbursed in case of a need to cancel.

In reality, if something comes up, you may be surprised at how much you can recover without insurance. I had to cancel a thoroughly planned trip to the Bahamas last year because of a health reason. I had no travel insurance. I got back every dime I had spent or committed to except a $500 deposit on some lodging. In that case, the deposit is still in effect, so when I am ready to rebook the trip, I will recover that money as well. I will have lost nothing. If I had had travel insurance, I would have lost the cost of the travel insurance, which would have been considerable.

I think there is something to be said for playing the law of averages as well by considering all the trips of your lifetime instead of the specific approaching trip. I have taken a lot of dive trips in my life. I have never taken out travel insurance, and the trip mentioned above was the only time I have ever had to cancel. (Oh, there have been little trips for which I never would have considered insurance and which also cost me nothing.) So let's say I have a worst case scenario and have to cancel a trip that costs me thousands of dollars, unlikely as that may be. Well, I have already saved several times that much money already by not buying travel insurance in the trips of the past, and I will save several times that amount by not buying it in the future.

On the other hand, if you don't take a lot of trips and you have a particularly expensive one for which you are sure you won't get the money back in case of cancellation, then it might make sense.

 

[Damselfish]

Whether it's a "reasonable purchase" is subject to debate. Some people believe in buying it all the time but I'm with boulderjohn. For a trip that's expensive or high risk, where it will be difficult to recover much of it, then I will consider it. But for most run of the mill trips I'd rather self insure. I've saved a lot so far by not buying travel insurance - it's not cheap and I suspect the insurance companies are making plenty of money on it.

Note that some policies include some medical coverage that may be useful depending on how (if) your regular coverage works out of the country. And believe it or not, you can buy insurance that covers cancellations "for any reason." You really need to read the details of what various policies include and cost and decide what makes sense in your circumstances.

 

[slingshot]

For me, "travel insurance" entails three parts, of which your question is directed at the first, reimbursement for the cost of travel if the trip is interrupted or canceled, for various reasons including personal illness, missed flights, or bad weather. I try to plan my flights for enough time to connect, but you could in theory consider the small risk of missing a trip due to a mechanical, a broken leg or a hurricane. The latter would be a reason, in my mind, for some coverage being worthwhile if you are traveling during storm season in the Caribbean. Interestingly, there are websites that can allow you to look up how often a hurricane has passed within a selected destination within a particular time period, if you wanted to see what your historic risk might be. I bought such insurance for a vacation last year, and didn't need it, but a TS passed us on my last day and ended up forming Hurricane Irene. Generally however, I self insure. You should however consider two other parts of dive travel insurance: dive medical and dive gear. Dive medical has been described in detail elsewhere, and you may not need any more input, but consider whether your insurance is primary or secondary, and how would it pay if you needed a chamber ride in a foreign country. My own insurance will pay if I need a chamber ride, they say. I just have to submit a receipt and a copy of my medical record! Of course, I'd be on the hook for what could be many thousands if I got bent, and would have to find a way of covering it in the field. Lastly, dive gear (by which I mostly refer to cameras and other electronics) may very well not be covered by your personal property insurance. In my research, I have found that some "dive accident" insurance only covers gear damaged in a medical dive emergency, not from being dropped to the deck or flooded. Even dedicated dive gear insurance usually doesn't cover gear "lost" eg dropped overboard or abandoned on a dive, there has to be a piece left to prove it was damaged. So, insurance is complicated. Personally, I mostly self insure for travel costs, I buy additional medical coverage to cover high end costs like hospitalization and evacuation, and I buy dedicated gear equipment because I have a video setup that would be too difficult for me to replace if I flood it out.