Scott McCartney, writing for the Wall Street Journal and syndicated on Recordonline.com, writes about some real-life travel situations where insurance may, or may not, be needed.
From the article:
“Michael Beriss received lots of cooperation from his airline and hotel when he had to cancel a trip to the Caribbean at the last minute last year. His son came down with high fever 12 hours before the family’s flight was scheduled to leave. The diagnosis: strep throat.
“I have never purchased travel insurance because the premiums look too high relative to the risks,” he said. “Of course, my first thought was that I had made a mistake by not purchasing insurance.”
Instead, his airline agreed to a full refund after he sent a letter from his son’s doctor. The hotel also waived a cancellation fee. “We did not lose any money from the last-minute cancellation, though we were disappointed to miss the trip,” Mr. Beriss wrote. “Given the policy of the airlines and hotels, I really don’t believe travel insurance is appropriate.”
It should be noted that airlines and hotels aren’t always as generous as they were to Mr. Beriss; often a change in plans means penalty fees and a credit towards future flights, not a refund. That’s one reason some people prefer travel insurance, and travel insurance does offer other benefits”
Mr. Beriss was very fortunate to be able to work with the travel providers to get refunds. This is oftentimes not the case, and travelers end up losing the non-refundable, pre-paid costs.
Also from the article:
“Travel agent Steve Danishek from Seattle, whom I’ve known for many years as a wise voice on travel issues, pointed out that the cost of a medical evacuation can be huge. “My mother, now deceased, wasn’t worried about the possibility of losing the $3,000 cost of a Panama Canal cruise and didn’t purchase insurance, but was stung by the $31,000 cost of the air ambulance from Panama City to Seattle for her broken hip,” Mr. Danishek said. “
In this case, the smaller potential loss of a few thousand dollars did not concern the traveler. Oftentimes, a traveler will think a small potential loss, $1000 for example, is not worth insuring. When insuring for less than $1000, it costs you are larger percentage in premium.
For example: A $500 trip costs $45 to insure, which is 9% of the total trip cost. However, a $1,000 trip costs $74 to insure, which is 7.4% of the total trip cost. A $2,000 trip costs $140, which is 7% of the total trip cost.
Despite this, the medical evacuation in the example above cost $31,000, an expense that travel insurance would have covered.
The article also mentions ski trips and an example of a $15,000 Air Ambulance claim by an injured insured. It is important to note that many policies exclude injuries suffered during dangerous sports or activities. You can, however, opt for hazardous sport coverage with many plans. This costs a little more, but will provide coverage for that skiing accident.
Related Links
Article from WSJ Online
Medjet Assist provides emergency medical evacuation coverage
