1. Don’t ‘opt-in’ on booking sites
It looks easy, but skip the checkbox for travel insurance on booking sites like Orbitz, Expedia, or cruise line sites.
- You won’t read the policy details because you are focused on something else.
- The language used to sell the policy will not explain everything fully
- It’s likely that you won’t have access to a range of plans or potentially necessary upgrades either.
Rule #1: You’ll have more focus, selection, and ability to purchase upgrades if you use a travel insurance comparison engine instead.
2. Avoid insuring refundable trip costs
Some trip costs are refundable and some aren’t.
Because travel insurance only lets you recover nonrefundable cash losses, these costs should not be included in your travel insurance coverage because it’s unnecessary and simply raises the price of your premium.
If your flight is cancelled, for example, but the airline offers you a full cost voucher for future travel, that loss is considered to be recovered and travel insurance has no obligation to provide further reimbursement.
Rule #2: Only cover the trip costs that are non-refundable and pre-paid.
3. Avoid multi-millions in evacuation coverage
Many travel insurance policies offer several million dollars of evacuation coverage, but it’s too much. It is rare for an evacuation to cost more than a couple hundred thousand (and that’s for extreme cases).
To be fair, evacuations are expensive exercises and not something a traveler wants to put on their credit card, but there’s no benefit to being over-insured either. It only serves to unnecessarily raise the price of your travel insurance premium.
Rule #3: Avoid over-insuring your emergency medical evacuations ($250,000 to $500,000 is adequate)
4. Don’t buy car rental coverage unless you really need it
Many travel insurance plans include car rental coverage as an optional upgrade, but it’s very likely that you don’t need it.
Automobile insurance companies often cover their members’ rental cars with the same coverage they have back home.
Warning: rental coverage through your auto insurance provider doesn’t usually include ‘loss of use’ fees imposed by the rental agency while the vehicle is being repaired. If you think about this, it makes sense. Back home, you’d have a spouse or friend drive you around while your car is fixed or you’d get a rental for a few days. Check with your automobile insurance company to understand your coverage for rental cars.
It’s also likely that your credit card will have rental car protection too if you use the credit card to rent the vehicle. Many credit card agreements also cover ‘loss of use’ charges and have coverage for vehicles up to $30,000 or $50,000.
Rule #4: Avoid car rental coverage – use your auto insurance or credit card instead.
See Credit Card Travel Protection vs. Travel Insurance for more details.
5. Avoid ‘cancel for any reason’ unless you really need it
Many travelers assume they need ‘cancel for any reason’ simply because they don’t understand the covered reasons for trip cancellation in their policy.
‘Cancel for any reason’ is an upgrade option (meaning it costs extra) that lets travelers cancel a trip without explanation for 50%-100% of their insured trip costs.
The covered reasons for trip cancellation provide coverage for a number of cancellation reasons, including terrorism, traffic accidents, job loss, hurricanes, and more.
Each travel insurance company and plan has their own list of covered reasons, so by spending a little time with your policy – use the free look review period – most travelers will find that their trip cancellation worries are covered.
Rule #5: Don’t buy ‘cancel for any reason’ unless it’s necessary.
See Is ‘Cancel for any reason’ worth it? for more details.
A recap of the 5 rules for saving money
- Don’t buy from a travel supplier: you’ll have more selection and upgrades if you use a travel insurance comparison engine.
- Don’t insure refundable costs: only cover the trip costs that are not otherwise refundable.
- Don’t over-insure your emergency medical evacuations: choose the coverage amount based on destination and distance.
- Don’t buy car rental coverage: use your auto insurance or credit card protections instead.
- Don’t buy ‘cancel for any reason’ unless it’s necessary.