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After decades of travel, why I bought travel insurance for the first time
Summer Hull has been covering (and using) travel tips, rewards credit cards and loyalty programs for over a decade. She has flown close to a million miles, often on points and miles and with her family in tow.
August 21, 2020 • 7 min read
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Quick summary
The article explores the decision to purchase trip insurance for a vacation home rental during the pandemic, highlighting new travel risks and changing habits.
It discusses how traditional travel protections from loyalty programs and built-in card benefits may not always cover scenarios like illness, quarantine or hurricanes, especially for nonrefundable home rentals.
The author compares standalone trip insurance policies, noting differences in coverage for COVID-19-related issues and natural disasters.
Flexible cancellation policies from hotels and airlines may reduce the need for extra insurance, but nonrefundable rentals present unique risks.
What to consider
Trip insurance policies vary in how they address COVID-19, with most not covering cancellations due to fear of travel but often covering documented illness or quarantine.
Card-based travel protections may require booking certain trip components, like flights, to activate coverage, and may have lower medical limits than standalone policies.
Home rentals typically have stricter refund policies, making additional insurance more relevant for these bookings.
What you'll miss from the article
A detailed comparison of when to rely on built-in card protections versus when to consider standalone trip insurance for different types of travel.
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I've never really been a trip insurance kind of traveler. That's not to say it isn't valuable, I just haven't had a need -- or a bad enough experience to show me I had an unidentified need. Usually, I've got enough miles, points, loyalty program elite status and built-in credit card perks and travel protections to get me out of most travel jams. And most of my trips usually don't involve huge, nonrefundable cash expenses.
But, 2020 isn't most years.
With shelter in place restrictions now lifted in our area, we are again traveling some, just less frequently and in different ways than what we usually enjoyed before. A few main differences from pre-pandemic and now include fewer flights and fewer hotel stays, but more road trips and vacation home rentals.
Of course, we're still in the midst of an active pandemic, so travel has now brought with it additional health and quarantine risks. Rapid testing has recently become more readily available in our area, so it is becoming a part of our trip-planning process. This probably brings down our overall travel risk posture, but it also increases the chance we end up quarantined just before a planned departure in the event someone in our family tests positive.
So for the first time I can ever remember, we've purchased trip insurance in advance of an upcoming road trip.
Having made a total of one trip insurance purchase in my 39 years, I'm not a travel insurance expert. I can't tell you every situation or nuance of all the various policies (though this guide to trip insurance does a pretty good job). But, what I can do is tell you why I purchased a plan this time around, just in case that helps you think through whether it makes sense in your situation.
The coverage I wanted
This particular trip is to a vacation home rental that costs more than I'm OK just losing out on entirely if something goes wrong. It's a large enough purchase that I want it protected.
The main type of protections I wanted for this trip were protections against hurricanes, quarantines and illness. Everything else was just icing on the cake.
In comparing plans, even just for those two main issues, I saw some differences in whether the company called COVID-19 out as being the same as all other medical ailments, or whether it is called out a bit differently. In all cases I saw, the pandemic itself isn't a qualified reason not to travel. As in, if you decide you don't want to go to your booked trip because of a risk of catching COVID-19, that wouldn't likely be a covered reason for trip insurance to kick-in.
However, if you fall under an official, documented quarantine, or if you (or an eligible family member) becomes ill and can provide documentation that a physician has advised you not to travel due to COVID-19 (or any other illness), then those situations likely would be a covered reason for coverage to kick in on the plans I actively considered.
Additionally, medical expenses incurred on your trip if you become ill while traveling with COVID-19 would also be covered items under the plan I purchased.
Since my trip is planned during hurricane season, I selected a policy that covers not only mandatory evacuations but also other coverages if the area has a hurricane warning issued or similar. The "should I, should I not", debate surrounding traveling somewhere that may get hit by a hurricane is just not a situation I really want to go through again.
I know firsthand credit card trip insurance coverage can work.
But, this time I wanted a bit more coverage for my own peace of mind. Some elements of the built-in credit card insurance I rely on have wording surrounding charging all or a portion of a common carrier fare (like an airline ticket) to card to activate coverage. We're mostly driving, so that won't really apply.
And while the coverage of the home rental itself would fall below the threshold on the credit card policy, the medical limits with the card's policy are much lower, which would matter in the event someone actually got sick.
But, generally speaking, a card's coverage could still be enough for your trip, even in a pandemic. In terms of my main concerns for the trip, for the Chase Saphire Reserve's available coverage, you'll find trip delay and cancellation coverages for a "Named Storm Warning," quarantine and illness. So, I would have had some peace of mind even if I hadn't bought a separate plan.
This is a case where you're really going to have to read the fine print.
With the more flexible than usual change and cancellation policies available from many hotel and airlines, you may not have a need for a significant level of trip protection as you can sometimes cancel or change your plans until the last minute now with minimal to no penalties.
But if you have transitioned your travel strategy to longer-term home rentals, as we largely have for now, then the equation shifts as those bookings usually aren't refundable once you get close-in to travel. In those cases, some bulked up trip protection is smart.
Your credit card's coverages may still be sufficient, but you may decide now is the time to get more serious about considering trip insurance, even if you never have before. For about $150, I was able to purchase the coverage I felt comfortable with for the whole family, and then not worry so much about the what-ifs that have been so omniprevalent this year.
I won't purchase trip insurance for every single trip we are lucky enough to take in the coming months, as some trips are clearly sufficiently protected by my card's built-in coverage. But there's a first time for everything, and 2020 was the year I finally ponied up for a trip insurance policy ... just in case.
Authors note: Because I know it will come up as a question for some, the plan I purchased was an IMG Travel Lite plan. Since I haven't had to actually make use of it yet (and hopefully won't need to make a claim), it's hard for me to say if it truly is the best choice for my situation. But it was one of the more affordable options and it clearly called out the coverage issues that concerned me most.
Photo by stevendocwra/Getty Images
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
