provided by Carolyn C. Rogers, CFRE
Wealth Services, Sanibel Captiva Trust Company
As many of you anxiously get back to normal and enjoy traveling again, the fact of the matter is that it’s a different world. Travel has become increasingly risky and expensive. Inflation, the cost of fuel and increasing demand are raising the price of airfares, lodging, rental cars, cruises, and just about every aspect of travel. Likewise, COVID-19 has added protocol risks while you’re at your destinations or en route. So many travelers are asking if purchasing travel insurance is a good way to protect their investment if the unexpected occurs.
Generally, travel insurance covers trip cancellation and pre-paid reservations like airfare, lodging, cruise fares and other advanced bookings; it also covers inconveniences during your travel such as lost luggage, missed connections, and trip delays; and finally, it can cover most medical expenses while traveling.
Keep in mind that many credit cards offer travel-related benefits that can cover you if your flight is delayed or cancelled, if your rental car is damaged, or if your luggage is lost during travel. American Express, Chase, Capital One, and Bank of America travel cards all offer varying levels of protection that could serve as an alternative to trip cancellation insurance. However, if you become sick or injured during your trip, travel credit cards typically do not provide coverage and your health insurance policies will generally offer medical coverage anywhere within the U.S. It is important to investigate what coverages these resources provide and under what conditions or exclusions.
The argument in favor of buying travel insurance becomes stronger when traveling to international destinations. Medicare is not likely to cover you abroad, and even if you do have private health coverage that covers you outside the U.S., foreign doctors are not likely to accept the coverage and can demand payment up-front. It is also important to note that emergency medical transportation or evacuation is usually not covered by other medical policies and must be purchased separately. Depending on where you are, emergency transportation – such as a Medevac helicopter or a private plane — can cost well more than $100,000 to get you back home. Finally, international travel insurance can help when dealing with medical emergencies overseas, as they understand how things work and how to speak the language ~ literally!
So, do you need travel insurance? The answer depends on your budget, your destination, and your specific situation, including any pre-existing medical conditions. Most travel insurance companies offer several different policies from which to choose, with varying levels of coverage and prices. You can also buy policies that cover a single trip, multiple trips, or coverage for the entire year. Many well-known insurance companies offer these policies, and often you can get coverage through your cruise company, your travel agent, or online travel booking engines when you make the reservations.
As an extra note of caution for international travelers, stay vigilant and be aware of scams. The latest involves the use of foreign ATMs and foreign hand-held credit card readers used at many retail locations. In both cases, your transaction will give you the choice of Dynamic Currency Conversion (DCC) which you should always decline. DCC allows the merchant or ATM operator to offer their own currency exchange rate which can be more than 10% higher than current exchange rates set by banks. To compound the scam, many foreign ATMs set exorbitantly high minimum withdrawals at $500 or higher for foreigners, which subjects more of your money to higher fees and higher exchange rates and leaves you with more foreign currency than you really need. To best protect yourself overseas, be sure to carry travel credit cards that do not charge foreign transaction fees, and always decline DCC coverage when offered.
Travel is a valuable gift to yourself. Just be prepared, safe and enjoy!
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