Q – We are going to be leaving for the Seychelles in six months on a trip booked through GoWay, a company we are working with for the first time. They wish to sell us insurance but before committing, we are wondering what your take is on that subject. We are First Class but definitely not deluxe travelers (don’t know if my terminology is correct) and we’re recently retired from Wells Fargo and ready to do likely two major international trips a year. Do agents make commission on this stuff and do you usually recommend travel insurance to our clients?
A – Our team has strong opinions on this one and we can easily ramble on about travel insurance. So let us summarize our response by offering
TEN THINGS YOU NEED TO KNOW ABOUT TRAVEL INSURANCE
01 – Each time anyone sells you insurance they are earning a commission that is built into the price.
02 _ Travel insurance is expensive – the cost on many policies is now between 8-10%. If your insurance is 7% or less of the total value of the trip you have gotten an insurance “deal”.
03 – Do not compare policies or look for “deals”. Insurance companies are never on your side. But some have a reputation to maintain and they do not want to lose the business of multi-billion travel agency groups. Your travel consultant should know, from personal experience, which insurer is best for you. If you are using a travel advisor for the first time, test them by asking them to summarize why they recommend a specific company or policy for your specific trip.
04 – As a general rule, avoid supplier-issued insurance. You will normally get better coverage and stronger advocacy from an independent policy. There are many exceptions to this rule and they include AMA Waterways, Tauck Tours, and Disney Cruises and Land Tours.
05 – One advantage of a private versus supplier travel insurance policy is that private policies are age-based, so if you are under 65, you may get far more reasonable premiums than travelers in their seventies or eighties. Supplier issued policies are not age-based so the fees for more mature travelers are figured into the total premium cost.
06 – Check with your home insurance agent to determine your level of insurance when you travel internationally. It’s probably worthless but do check.
07 – If you have Medicare or work-related insurance, we are less likely to recommend the absolute need to take out insurance for travel in the United States.
08 – Unless you are a Bernie Sanders supporter, you likely feel that insurance companies are entitled to make all the money they can. Yes, 8-10% of your total trip cost is rather obscene, but that should not prevent you from insuring travel to Asia, Africa, South America, Antarctica, and southern Europe. If you are traveling in Northern Europe hope that you get sick in Scandinavia. We would never recommend that you travel anywhere outside the United States, with the exception of Canada, without carrying some form of trip cancellation and medical coverage. And remember, they are not at all the same thing.
09 – Do not ever book travel insurance on the internet. If you have a claim, your travel consultant can be your advocate if a claim is unjustly denied.
10 – The single biggest financial hit you can get while traveling overseas is medical evacuation by helicopter or medical aircraft. Do make note of how much coverage you receive for this eventuality. If you receive less than $50,000 in medical evacuation coverage, walk away from the policy.