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As a frequent traveler, I’ve always balked at purchasing travel insurance because I’ve been confused by the different policies and whether it actually has any value. However, recently I embarked on a mission to research the topic and find out which policies were actually worth it. To start off, I commissioned Princeton Survey Research Associates International to conduct a study to find out if I was alone and see whether or not people think it’s worth it, and the results were very interesting.
In all, only about half of the respondents said they had a pretty good idea of what travel insurance covers while 49% admitted to being unsure of what travel insurance covers.
Only 21% of people purchase travel insurance (only 7% of them purchase it regularly) with an astounding 78% of people responding that they either never purchase travel insurance or take a trip where it is offered.
Of the people that do purchase travel insurance, the main reason they buy it when going on airline trips or cruises was trip cancellation by a long shot, with 52% of respondents picking that as their main reason. Medical coverage was the main reason for another 27% of travelers while 20% claimed another reason.
In all, only 37% of people surveyed said they felt that travel insurance was worth the cost. Nearly half – 47% – said travel insurance wasn’t worth the cost, while 16% had no opinion.
That’s a lot of numbers to throw out there, but the main conclusion I draw is that, in fact, even people who purchase travel insurance don’t know exactly what they are buying and what it will cover.
Although we’ve all learned to be a little leery of the offers of “Trip Protection” and “Cancellation Protection” add-ons we see when purchasing airline tickets through airlines or online travel agencies these days, as well as the “Travel Accident” and “Travel Emergency Assistance” many credit cards offer as part of their benefits suite, travel insurance is different than these forms of coverage.
Whereas just buying a refundable plane ticket might be your best bet if you think you might cancel a trip, more extensive travel insurance can be extraordinarily prudent and valuable in certain situations, such as taking expensive non-refundable trips, or traveling to international destinations where medical care might be limited and if something happens evacuation may be required.
That said, it’s also extremely important to educate yourself on what exactly your travel insurance plan will cover and what it won’t – the same as with those travel accident and emergency benefits that come with your credit cards.
For instance, though most consumers claimed trip cancellation as the main reason they purchase travel insurance, what and when you can cancel depends on your plan, and it’s often much more complicated than just changing your mind and deciding not to take a trip.
Likewise the medical coverage, it’s important to know whether evacuation or transportation is included in your plan, what medical expenses are covered and what exclusions there are.
In short – there’s a lot of fine print!
However, as more and more mainstream travelers venture farther afield to corners of the globe that were once inaccessible, more and more of us are going to be considering travel insurance and it’s important to know what’s out there.
As a follow up to this survey, I am going to cover the basics of travel insurance including a rundown of the various kinds of plans that currently exist, what they cover, what to look for in an insurance plan, and the kinds of coverage many of the top travel credit cards out there offer, so stay tuned for future posts, and if you have questions you’d like answered, please feel free to comment below.
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The American Express Platinum card has some of the best perks out there: cardholders enjoy the best domestic lounge access (Delta SkyClubs, Centurion Lounges, and Priority Pass), a $200 annual airline fee credit as well as up to $200 in Uber credits, and mid-tier elite status at SPG, Marriott, and Hilton. Combined with the 60,000 point welcome offer -- worth $1,140 based on TPG's valuations -- this card is a no-brainer for frequent travelers. Here are 5 reasons you should consider this card, as well as how you can figure out if the $550 annual fee makes sense for you.