AP NEWS

ON THE MONEY: Is trip insurance worth the expense?

December 16, 2018

Recently, my wife and I made an airline reservation to Long Island to visit my daughter and our son-in-law. Since we made the reservation in late September, we thought it would be a good idea to purchase trip insurance through the insurance carrier provided by the airline.

As it happened, Barbara developed a severe chest cold with congestion, so we cancelled the trip. I have already submitted a claim for the $625 cost of the tickets and expect to be reimbursed. The premium for the coverage was only $46, which seemed like a bargain at the time. (It would have been if I had paid cash for the ticket).

I have now discovered that I paid for coverage that I did not need, since my CapitalOne Quicksilver card provides up to $1,500 of coverage for trip insurance cancellation protection for sickness or injury prior to the travel date. Death of a traveler or family member prior to the travel date is also covered.

To be reimbursed for the cost of the ticket, I had to submit a letter from our physician, stating that he had seen my wife prior to the date I cancelled the reservation, along with a receipt for the cost of the ticket. The same requirement would apply had I elected to file a claim through my credit card.

Take another scenario: assume that you and your spouse are planning a 14-day river cruise down the Rhine on one of longboats that are widely advertised. We will further assume that the cost of your trip, including business class airfare will set you back $26,000. In this case, would trip insurance protection make sense?

I went online and did some shopping and discovered that the premium for comprehensive coverage for a trip with these attributes would be $1,747. The covered items were: $26,000 for the cost of the trip, $32,500 for trip interruption, coverage for baggage loss or delay, travel delay, medical coverage up to $50,000 while on the trip, life insurance for the flight, medical evacuation, rental car losses and identity theft resolution, among others.

For an extra cost, you can even obtain a “Cancellation for any reason” benefit.

The trip interruption benefit was quite broad and included 20 specific contingencies, including your loss of a job, acts of terrorism while on the trip, loss of your passport and other desirable benefits.

A premium of $3,284 would provide much higher coverage limits, and depending on your uneasiness over foreign travel, could make sense. For my tastes, paying $1,747 for the enumerated coverages seemed to be plenty.

So, is trip insurance worth it? First things first, check out the protection provided by your credit card. Some premium cards provide up to $5,000 of coverage for the contingencies I mentioned: sickness, injury, or death of a loved one (or a traveler) prior to the departure date. I had experience in 2017 with CapitalOne, when my rental car was virtually destroyed in a hail storm, and I was very satisfied with their resolution of the matter. I had not elected coverage through the rental car company, and the combination of AllState and CapitalOne carried the day quite nicely.

If you are planning on travelling out of the United States, I recommend that you investigate the various trip insurance coverage packages that are available. As usual, it will pay you to shop.

One site, insuremytrip.com, offered coverage through more than 25 different companies, all of whom were rated 95 percent to 98 percent by insureds. You also can tailor your specific coverage to meet your needs.