Top 5 Travel Insurance Myths
There’s a lot of misconceptions around travel insurance. Let’s have a look at 5 common myths surrounding this type of insurance.
1. Is too expensive
2. Isn’t necessary for short trips
3. Isn’t necessary because the airline will refund me if I have to cancel
4. Is only for seniors
5. Covers everything
Travel insurance is too expensive
While the term ‘too expensive’ is subjective, it may help if we actually look at some numbers. I went to www.allianz-assistance.ca and ran a quote for a family of four for a one week trip. Coverage was for $5,000,000 of emergency medical, $2000 towards vehicle return, and $150/day for 10 days of meals and accommodations if you’re delayed for emergency medical reasons. The cost? $50.
I’d suggest that $50 to cover a whole family for a week’s vacation is unlikely to be ‘too expensive’ for most people.
Travel insurance isn’t necessary for short trips
If an event has low probability and low loss, then there’s no need for insurance of any type. If an event has low probability and high loss, then insurance is a perfect solution. (Aside, if an event has both high probability and high loss, then you probably should find something else to do!).
Let’s say a five day vacation to the south has the probability of an emergency of .000005%, with a loss of $20,000. If you’re only going on a one day trip, then your probability is now .000001%, or one fifth, for the same loss of $20,000. Either way having an emergency on a 5 day trip or a 1 day trip is unlikely. It’s the $20,000 emergency medical bill we need to be concerned about, and that should be the motivation for purchasing travel medical insurance.
Additionally, we all know the saying “Most accidents happen close to home.” You don’t need to be far away or travelling for an extended time for the unexpected to occur.
Travel Insurance isn’t necessary because the airline will refund me if I have to cancel
Well, maybe. I’d recommend that you confirm this to be the case, and the exact conditions required for a refund, before you purchase the ticket. However there’s more to travel insurance (actually, much, much more) than just cancelled trip protection. Two other common benefits available with travel insurance are emergency medical coverage while you’re on vacation, and lost baggage protection. These types of benefits protect you from losses due to all manner of things, including medical bills, costs of returning to home, getting your travel companions home, getting your vehicle back to its origin, and many other things. In many circumstances, the cost of your airline ticket is almost incidental to the many other things that can go wrong.
Travel insurance is only for seniors
The belief that travel insurance is only for seniors lies in the idea that seniors may be inherently prone to more medical emergencies. That’s not necessarily the case, particularly since many travel insurance policies will exclude pre-existing conditions. In fact, many of the common emergency medical claims are accident related and have no age bias, for example: incidents such as broken bones and sprains, food poisoning, dehydration and sun stroke, and car and motorcycle accidents. I suspect that riding around the Dominican Republic on a moped with no helmet is more frequently done by younger vacationers than the octogenarians in the crowd.
Travel insurance covers everything
Well, not quite. Travel insurance does not cover the cost of you visiting a doctor during your trip because you wanted a second opinion on a rash you had before you left home. You also can’t expect to be reimbursed for a trip you decided to cancel because you changed your mind.
In fact, it’s more appropriate to be aware of what is covered. The general idea is that travel insurance is intended for sudden, unforeseen circumstances. For specifics, look to your travel insurance policy. Your policy won’t necessarily define everything that isn’t covered, but will clearly define everything that is covered. For example, Trip Cancellation benefits will list covered reasons for cancelling your trips. The general rule of thumb is, if it’s not listed, it’s not covered. As a result, the only way to be clear on what is covered is to read your policy. And that’s exactly what we recommend – always read your policy before you travel. If you’re confused about any benefits or wording, call your travel insurance provider for clarification. That way you’ll know exactly what is covered as well as what isn’t.