Or a whole lot at one time.
In the past week I’ve had two occasions when I’ve been hit with an upsell for insurance.
I’m not talking about travel insurance which I consider a must primarily for the medical coverage and lost items or cancelled flights. I have an annual plan for it. (Read Do I Need Travel Insurance? Top Bloggers from 6 Countries Respond.) I’m talking about various kinds of trip insurance that I’m offered to protect my travel investment from a change of plan or from me doing something stupid. The upsells I’ve experienced recently include…
- When I picked up my rental car they tried to sell me insurance in case I lost my key or needed roadside assistance. The rate was $6/day or $90. I can think of better ways of spending $90.
- When I booked a vacation rental they tried to sell me cancellation insurance at $39 and damage protection at another $59 at checkout. I declined and then they sent me an email encouraging me to protect my vacation. When I clicked through on this both insurances came in at $59.
Now, I’m not anti-insurance. My father was in insurance. I get it. In fact he taught me when insurance makes sense and when it doesn’t – in essence, when to self-insure.
When to Buy Trip Insurance or Any Insurance Upsell
In the cases above, the insurance offerings would have been a waste of money. I’ve never lost keys before so why would I now? I’m already on Kauai (yes watch for the stories starting next week) so chances are I won’t cancel the vacation rental. And I’m certainly not going to wreck the place I rented.
Insurance can protect you but every time you buy it the booking site, tour company or travel agent your purchased it from makes up to 30% commission, sometimes more. These are high margins in the travel space and the reason you get hit so many times to buy.
Know Before You Buy
Before buying additional insurance for any aspect of your travels check to see…
- What your travel insurance already covers. Mine covered me when I canceled my Peru trip. Read The Trip that Was Just Not Meant to Be. The same insurance paid for new glasses when I lost mine on a trail in the UK. Read: Do I Need Travel Insurance? Top Bloggers from 6 Countries Respond. BTW, as a Canadian I use American Express Travel Insurance and a top US blogger I know uses RoamRight Insurance. Popular in Australia is World Nomads. And in the UK and Europe, bloggers I checked with buy through their bank.
- What your car insurance will cover. Some companies allow you to add a rider to your car insurance to cover you in your rental car.
- What your credit card will cover. I’m currently traveling with a US$ credit card. Among other things it gives me “Auto Rental Collision/Loss Damage Insurance at no additional cost for up to 48 consecutive days”.
- What your automobile association or roadside assistance service will cover. My CAA membership (the Canadian equivalent of AAA) covers roadside assistance for my car rental. If you don’t have CAA or AAA you can buy short or long-term roadside assistance from Allstate.
- What your home owners insurance will cover. This is usually limited to the loss of personal items.
Consider Before You Buy
If you’re not covered by any of the above, before you buy trip insurance consider your tolerance for risk and the likelihood of a claim.
- The value of your trip. Are you splurging big time? Is it an expensive tour? To protect your investment you’ll pay about 10-12% of the cost in insurance. You decide whether that is the price of peace of mind for you.
- Your health. How is your health and that of your immediate family. If you have health concerns some form of cancellation insurance is probably a good idea. (I cancelled my Peru trip due to my mother’s health and was reimbursed for my flights by my annual travel insurance plan. In fact, I was reimbursed 100% and I received the airline credit for the trip, less the charge of changing of course.)
- How far in advance of the trip are you booking? The more months between booking your trip and traveling, the greater the chance that something could change. When booking far in advance check the cancellation terms carefully. If they’re not favorable cancellation insurance could be beneficial.
- Your work. What are the chances that you’ll have to change your plans due to an unexpected work commitment. To insure for this requires Cancel for Any Reason coverage which is expensive. If your company could do something like this to you perhaps they’d like to pay for the insurance.
Always Buy Travel Insurance but Don’t Always Buy Trip Insurance
I consider travel insurance to be essential. Here are my recommendations for travel insurance companies for North Americans.
- Americans – Allianz Global Assistance – I can recommend Allianz as I have had three claims through them and all were handled very efficiently. No hassle at all.
- Americans – Roamright – They’re the recommendation of a blogger I respect, Matt Long who blogs at Landlopers.
- Canadians – American Express – I’ve done the research a couple of times and, as a Canadian, The American Express plan is managed by Allianz Global Assistance. You don’t need an American Express card to buy it.