Profitt Report: Do you need travel insurance for your summer vacation?

Photo credit: MGN

You can buy insurance for your car, your home and your vacations. If you’ve ever booked a trip, chances are, you’ve come across travel insurance. The point of any kind of insurance is trying to plan for and expect the unexpected. However, before you buy a trip insurance policy, you need to make sure it contains the coverage you’re looking for.

If you’ve already purchased the plane tickets, a hotel room and transportation, the idea of shelling out more money for travel insurance might not sound appealing. However, travel agent John Schmitt said you’d be surprised at how affordable it could be.

“It’s surprisingly very affordable, insurance is generally about seven percent of the cost of the trip,” he said.

He’s president of Bay City, Frankenmuth and Grand Hill Travel. Here’s how trip insurance works: if my trip costs $2,000, my trip insurance is $140. However, that number isn’t true for everyone.

“It’s age-based, so the trigger point if you're under 60-[years-old], seven percent is a good number. If you're over 60-[years-old], then it might skew a little higher, maybe nine or 10 percent,” Schmitt said.

Next, what does that insurance cover? For starters, not just you but emergencies you might need to attend to back home, such as sick parents or kids.

“Most travelers think when they buy insurance they're just going to cover themselves but extended family members are and family members are included in that,” he said.

Another good question to ask before you buy travel insurance, what doesn’t it cover? This is where you need to do your research because different policies have different variables.

Let’s say you’re worried about getting sick and cancelling the trip. Whether you’re reimbursed will depend on the illness.

“If somebody is ill when they buy the insurance or they have been ill for the last 120 days when they buy the insurance, then that would not be a covered reason,” Schmitt said.

Though, you might be able to buy a waiver for that condition. Another thing to pay attention to: weather. Let’s say it looks like storms are predicted for the week of your vacation.

“You could say, ‘I don't want myself in the middle of bad weather,’ you could cancel but that technically in the regular policy is not a covered reason,” Schmitt said.

However, there’s something called cancel any time insurance. Schmitt said that means for any reason, any time, you can cancel your trip and get most of your money back. It is more expensive than typical insurance.

“It’s a 30 percent bump, so a $200 policy would be $260 and that allows you to say, ‘you know what? I don't want to go,’ and you get 80 percent of your money back,” Schmitt said.

If you’re cancelling for a reason normally covered within a typical policy, then you get 100 percent of your money back.

Clearly, there are plenty of options so before you buy, make sure you figure out exactly why you want this insurance.

“Know what the options are and make the wise decision in what might be suitable for you,” Schmitt said.

Also, check your health insurance if you’re traveling overseas: each carrier will have different coverage options when out of the country. Consumer Reports takes a look at travel insurance here and here.

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