Travel Insurance–Should You Get It?

Dear Mr. Miller:

I have a question about travel insurance.  I am traveling to Europe late this year and I am so confused as to what to purchase and how much to pay.  I hope you publish this question because I know a lot of people are interested in this subject.

Careful Explorer

Past Articles on Subject
Purpose of Travel Insurance
Wants & Needs
Must Haves
Emergency Evacuation Insurance
Notice Required
Younger Travelers Need This Too
Read and Compare
Our Areas of Expertise

Dear Explorer:

Past Articles on Subject:  I have written about this topic extensively in the past.  Back in 2016 my wife had a 5 night stay in a Buenos Aires hospital with double pneumonia. That event gave rise to a number of articles with a number of “parts.”  Type the following in the search box “Don’t Leave Home Without Them” and “Don’t Leave Home Without It”  Or search within the category “Insurance.” Here’s a link to one of them to get you started. 

Purpose of Travel Insurance:  This is probably the number one question I get from people, so it is certainly on the radar for most.  I have also seen it covered in a number of recent YouTube videos by travel/cruise vloggers.  In most cases I disagree with their emphasis on trip cancelation/interruption insurance.  While potentially important, it is not the end all and be all that they seem to think.  For some reason, most consider travel insurance to be for the purpose of making you whole if a disaster occurs and covering even the most insignificant of costs.   It isn’t and was never intended to be.

Travel insurance’s purpose, and that of any insurance coverage, is to prevent financial disaster such that without it you would have to downgrade your life style.  That is why I typically say, if you can’t afford to lose the amount paid for your trip, then you probably should not be taking the trip in the first place.  You might shed a few tears over the $5000 or $10,000 0r whatever that you paid, but it won’t force you to move into a smaller house or delay your retirement (because you were going to spend it anyways).

Wants & Needs:  Following that logic and breaking things down into must haves, needs, and wants, the baggage loss, trip delay, stolen property, etc. coverages are nice but they are wants, not needs or must haves.  They will be there in the typical travel insurance package but the amount of coverage vs a different package should not be a factor in your decision as to which to purchase.  Trip Cancelation/Interruption which pays for the cost of the trip and its components for which you paid and are unable to obtain a refund are maybe, at best, needs.

Must Haves:  But here’s the Must haves:  Medical coverage and Emergency Evacuation Insurance.  Many medical insurance policies, including most Medigap plans (subject to very limited exceptions)  do not cover one outside of the USA. For Medigap, the ones that do are limited to $50,000.  You have to check before you travel.  The same can be said for Medicare Advantage Policies as well as employer provided and individual insurance.

Think about my wife.  We were in for somewhere around $15,000 US, and that was 2016.  And that was in a country where medical care is not expensive.  Of course, the USA leads the pack on expensive care, but Switzerland, Germany, Norway, and many of the other western European nations are close behind (Argentina, where we were, is way down the list).  So let’s triple that cost to $45,000 US in 2024 if you are in one of the more expensive countries when disaster strikes. And that didn’t even include the potential (thankfully, not necessary) Med-jet to get her (and me) back to the USA.  They quoted $20,000 US at the time.  If uninsured, would $45,000 + $20,000 tend to put a dent in your retirement nest egg?

Emergency Evacuation Insurance: covers the cost to get from wherever you are being treated to a more appropriate facility, if necessary.  And many policies include getting you home (even if it requires a specially equipped private jet with medical personnel aboard to care for you) to continue your treatment.  Most people want to come home as soon as they can.

Notice Required:  An important caveat on this coverage—you have to notify the insurer prior to obtaining any services for which you are going to claim reimbursement, i.e. before you take that ambulance.  Otherwise, they typically are not going to cover any services rendered prior to receiving notice!  And keep your notes.  Our insurer tried to get out of the claim by telling me I hadn’t notified them. I guess they didn’t know I was an attorney.  Of course, I had my notes, I had the claim number, which happened to be in the handwriting of the treating physician on the cruise ship and was recorded prior to anyone even calling for the ambulance.  And she was willing to testify.  That plus the fact that this insurance company makes a big deal that they record all of their calls and I was willing to subpoena their records if necessary brought them quickly back to reality.

Younger Travelers Need This Too:  Many younger travelers, and me included many years ago, do not purchase this insurance on the basis that they are young and healthy.  Don’t be fooled.  We are not talking about the probability of a disaster occurring, only the possibility.  No matter how healthy you are, the possibility is still there.  Appendicitis, trip and fall causing a broken leg, or worse, etc.  All of these things can occur.  The lower probability is figured into the premium you have to pay.  Generally, the younger you are, the lower the premium.  So don’t try to save a few hundred dollars at the risk of losing half your net worth.  It is, obviously, a false economy.

Read and Compare:  My last caveat is you have to read at least the summary of the policy, not just the headlines.  What are the dollar limits of coverage?  Does it cover pre-existing conditions that flare up causing the emergency?  What are the triggering events?  Sure, sudden illness/accident are typical but what of financial insolvency of the cruise line, etc?  Will that trigger the trip cancelation/interruption?  All of these things are factors.  But don’t get too stressed.  There are two sites that do a pretty good job of comparing one policy to another.  I can’t link them because they are super protective any time anyone does that and last time they sent me their standard letter of potential law suit.  I had to explain that my link was trying to send them business, not be smudge their name.  They are Insure My Trip and Squaremouth.

Our Areas of Expertise:  If we can assist you in any of our areas of expertise, Estate Planning, Estate Settlement/Probate, Medi-Cal Benefits, VA Benefits, please give us a call at 760-436-8832 and safe travels.