By Christopher Elliott
Mark Graham is planning a trip to Sicily and France with his wife this summer. He’s still working out some of the details, but one thing he is sure of: getting travel insurance. Graham can’t imagine traveling without it.
“We feel better knowing we have the safety of insurance,” says Graham, a retired telecommunications worker.
And who can blame him? The pandemic made travel insurance a must-have item for many travelers, including people like Graham, who fit the “must be insured” profile (retired, overseas travel, cruising). Others who are planning their 2023 trips may still be on the fence. I can help you decide.
It’s going to be another interesting year for travel, experts say.
“Between flight disruptions, weather issues and unexpected medical emergencies, travel is unpredictable and will continue to be so in 2023,” says Carol Mueller, a vice president at Berkshire Hathaway Travel Protection.
It’s natural for people to think about travel insurance. But what should they do? Graham’s concerns are common. For example, what if there’s another COVID-19 outbreak or the war in Ukraine affects his cruise? He’s also worried about a possible trip disruption or medical emergency. Those are issues that a standard travel insurance policy can address. But there are so many choices.
“Travelers are more interested in purchasing travel insurance than ever,” says Karisa Cernera, a director at Redpoint Travel Protection, a travel insurance company. “But choosing a travel protection plan can be overwhelming.”
What kind of insurance is available for your 2023 trip?
If you’re planning to spend more than $5,000 on a trip and you have prepaid, nonrefundable expenses like airfare and a hotel, you need some kind of insurance.
Here are your options:
• Most standard travel insurance policies cover “named” perils such as trip cancellation, delays, medical emergencies, medical evacuation, interruptions and lost luggage. They cost between 5% and 7% of your nonrefundable, prepaid trip expenses.
• A “cancel for any reason” policy covers all of the above — plus, you can cancel your trip for any reason and get anywhere between 50% and 75% of your money back. A “cancel for any reason” policy costs between 9% and 12% of the cost of your trip.
• You may also have coverage through your homeowner’s or renter’s insurance, auto insurance or credit card. You’re already paying for them, so you may be able to skip a separate policy.
Before you buy anything, you owe it to yourself to check the type of insurance you already have. It may be enough. That’s what Anand Kumar, a program manager, discovered when he booked a Baltic cruise.
“I concluded that my credit card provides reasonable travel insurance as well as other benefits, so long as I booked my trip with the card,” he says.
Why should you buy travel insurance in 2023?
Do you need a travel insurance policy? That depends on who you are — and your circumstances. Here’s a checklist. If any of these apply, you may need a policy.
Peace of mind. That’s the No. 1 reason people buy insurance. “They want assurances that if the worst happens, they’re covered,” says Dan Richards, CEO of Global Rescue, a company that provides medical, security, evacuation and travel risk management services. That’s top of mind for 2023, with a war and instability continuing to threaten many vacations.
Medical coverage. That’s a lesson Francesca Owens, a travel coach who moderates Travel the Inside Out Facebook group, learned while traveling internationally. She says she “stupidly” skipped insurance and had to pay cash to settle her hospital bills in Prague. Now she insists that her clients always get insurance. “If they won’t buy insurance, I won’t work with them,” she says.
Trip interruption and travel delay benefits. Last summer’s airline disruptions made travelers think about ways of avoiding the chaos. “Travelers want security,” explains Terry Boynton, president of Yonder Travel Insurance. “They want to know that if the travel industry is still not fully stable in 2023, travel insurance will help foot the bill for trip interruptions, travel delays, and lost or delayed baggage.”
Cancellation protection. If you can’t afford to lose the money you paid toward your trip, then you might want to splurge for a more expensive “cancel for any reason” policy, say experts like Melissa Beers, co-owner of MyJourneyBeginsTravel.com. Anything else can be a headache when you file a claim, and there’s no guarantee you’ll be covered. “Generally, you have to back it up with medical information and other proof before a travel insurance company will pay the claim,” she says. But do the math before you buy one: You may be spending more than you would get if you file a claim.
How do I know what kind of insurance I need?
Which policy is right for you? That isn’t easy to answer, because each traveler is different.
If you’re a 20-something adventure seeker, you’ll need a policy like Redpoint’s Ripcord policies, which include rescue. If you’re retired, you’ll want a comprehensive policy. For example, Graham has decided to buy a policy through Seven Corners, which he found after extensive research. It covers the basics, “and it has a good reputation for claims,” he says.
Consulting with a travel professional can help. But don’t rely on a travel agent. Instead, conduct independent research online. (I publish a free guide on travel insurance that may help.)
Geoffrey Millstone, a travel adviser with Clarksburg Travel, says travel insurance has changed since the pandemic. Regular “named perils” policies have new rules that make claims more tedious, and lately travel insurance companies have been slower because of this summer’s travel disruptions. He warns that you have to read the fine print carefully.
“Cancel for any reason policies work, but they can take between 60 and 90 days to process the claim,” he adds.
Whether or not you buy travel insurance for your 2023 trip, travelers say you should at least consider it. Ross Copas, an industrial electrician from Tweed, Canada, says he had a close call on a recent polar cruise that reminded him of the importance of insurance.
“There were a few anxious days before we were tested for COVID and boarded the ship,” he remembers. “We had not bought cruise cancellation coverage for that cruise and were looking at losing a significant amount of money if we tested positive.”
Most major travel insurance policies cover COVID-19 but require you to be hospitalized. There’s a workaround. You can also buy travel insurance through a company like Covac Global, a membership program that specializes in covering infectious diseases like COVID-19 and medical evacuation without hospitalization requirements.
Fortunately, Copas tested negative. But he learned an important lesson: Always consider your travel insurance options before you book your trip. He says he won’t make that mistake next time.
Avoid these mistakes
Buying the cheapest policy
Dan Skilken, president of tripinsurance.com, sees this mistake every day. People will go to a travel insurance comparison site and buy the cheapest insurance. “The cheapest plan is not necessarily the best value,” he warns. “Consider the plan with better coverage that addresses the risks that you are the most concerned about.”
Waiting too long
Many insurance policies exclude medical conditions for which you have received treatment or have sought medical advice within six months before your insurance starts, says Neville Mehra, chief marketing officer for Genki, which sells travel health insurance. “If a condition arises before your insurance begins, then it will normally be excluded,” he says. “If you have insurance, it may be covered.”
Failing to consider alternatives
There are less-expensive ways to insure your trip, says Laura Heidt, the insurance desk manager at Brownell Travel. “If you don’t care about insuring your trip costs and are only interested in the medical coverage, good policies can cost as little as $50,” she says. Heidt also recommends an air medical transport membership like Medjet, which evacuates you in case of a medical emergency.
Christopher Elliott (chriselliots.com) is the founder of Elliott Advocacy (elliott.org), a nonprofit that empowers consumers to solve their problems and helps those who can’t.