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Let's Talk About Travel Insurance

April 9, 2014 at 11:08 AM | by | ()

Chances are, if you've booked a flight online you've seen some sort of advertisement for a little reassurance called travel insurance. Protection from expenses and changes caused by stuff like natural disasters, political upheavals, and even lost luggage is a temptation, for sure. Still, we must ask the question: is travel insurance worth it?

For some perspective, we look to a recent travel issue where insurance would have helped. Our trip to Christmas Island didn't go as planned due to a cyclone that hit the region just days before our arrival. Our original itinerary was to continue on to the Cocos Islands, just about 90 minutes further into the the Indian Ocean. Alas, that cyclone knocked out the refueling capabilities of Christmas Island Airport, in turn eliminating our ability to enjoy the Cocos atoll. We were stranded.

A forced vacation on a tropical island doesn't sound all that bad, right? Well, we had prepaid our hotel in the Cocos Islands and, since our travel plans were cancelled within a few hours of the intended arrival, we risked losing the money for the three nights' worth of ocean-side bungalow accommodation. Had we taken the option for travel insurance before typing in our credit card details, it would have been less stressful (not to mention a less expensive mistake). For just about $45 AUD and filling out a claim form, we would have kept our money despite the cancelled accommodations, and enjoyed our marooning a bit more.

What have we learned?

1. Buy the insurance
If the option for a little assurance falls within your budget, just add the insurance to your itinerary to save you unnecessary stress, phone calls, and added work if something were to happen. We're crossing our fingers nothing does happen, but consider your destination and flexibility of plans. The more remote/rare the place and the less flexible the plans, the greater your chances of needing that insurance.

2. Know before you go
Read the conditions of your accommodation and flights to see if there is an option for late cancellation or refunds as a whole. If you miss your flights for one reason or another, you may be able to get your money back. It's best to know everything before you click "confirm."

3. Use a credit card with travel insurance
Most travel-themed credit cards come with purchase protection, so if you use a card like Chase Sapphire on travel-related purchases, the fine print may make insurance claims as easy as placing a call to customer service to file a claim and have the charge reversed. As with #2, read that fine print before you make assumptions.

4. It's always worth an ask
If you don't opt for insurance and have no other way of protecting your travel, it never hurts to ask the hotelier or the airline what they can do. Often times, a credit for future travel or stays might be offered out of goodwill or, on rare occasions, you might be able to get a portion of your charge back to you. Just remember to put aside the frustrations that led to this point and ask nicely.

Obviously, we still enjoyed our trip to Christmas Island and soaked up enough sun for two islands, but losing the cash on cancelled accommodation stings worse than a sunburn.

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