What are the most important elements to consider in a travel insurance product?
 

Historically, I've always scoffed at travel insurance. I always thought it was a sucker bet of the worst kind - worse than typical insurance products. I have always thought that between regular credit cards, elite status with airlines, and my existing insurance products from home (auto, medical) I didn't need anything else. I wasn't about to spend money just to get "extra" lost-baggage or flight delay cover.

However, we're getting ready to embark on a three-country trip (Jordan, India, Nepal) that includes a lot of different pieces that are a bit outside of our usual comfort level. A few basics about the trip:

- Routing is MCI-MKE-(stop)-ORD-AMM-(stop)-DEL-KTM-(stop)-DEL-(stop)-AMM-ORD-MCI.

- All of the long segments of the trip are on RJ in Crown Class (a J award) using BA Avios. MCI to/from the Chicago area are on $49 each-way paid segments. DEL to/from KTM is on Jet Airways (9W), also a cheap paid ticket (about $120 per person R/T).

- Two people, age 40, good health, carrying U.S. medical insurance. We both have fairly standard PPO plans.

- My main flight-related concern is that DEL-KTM connection. RJ says they will interline to 9W in DEL no problem, but I am half-expecting our bags to get completely lost. We are planning on packing to the 9W baggage limit even through the RJ Crown Class limit is a lot higher.

- The DEL-AMM-ORD-MCI return is all in a single day. None of the connections are insanely tight but this one does concern me a bit.

- Jordan will be a self-drive rental car, 2 nights in Western hotels and 1 in a Wadi Rum camp. Jordan car rentals force you to buy a ton of insurance including LDW. We're doing everything here on our own.

- Nepal will be 2 nights in Thamel city hotels and 3 trekking in smaller villages. Nontechnical, low altitude "teahouse" trek. Does not appear to be any kind of difficult trek, but if we're going to sustain some sort of illness or injury, this would seem like the highest-risk area for it. Everything in Nepal will be guided tours.

- India is Western hotels, mainly Starwoods paid with points. We plan to do a car hire (w/driver) for most of India...maybe a train or two as well. Delhi, Jaipur, Agra mainly. Not likely to do much in the way of guided tours beyond whatever "guiding" we get from the driver.

What are some of the key things I'd look for in travel insurance? Or is my earlier feeling that I shouldn't buy travel insurance at all still a valid idea? The value-adds to me seem to be insurance that provides medical benefits above what my own medical would provide and a strong "next flight out" type of benefit if my flight gets canceled and one of the airlines starts giving me crap about being on an award ticket. A decent baggage benefit if I land in KTM and our packs have disappeared never to be seen again would be nice.

Any other thoughts/advice?

Travel insurance seems focused on three things:
Trip interruption/cancellation
Baggage type coverage
Medical.

The first will provide you little value since much of the costs are points and awards.
The second seems like relatively small amounts of money that you don't need "insurance" for.
The third seems to be where I'd focus.

I'd worry about getting medical that covered evacuation/repatriation and then see the baggage benefits, if any, as bonus.

My thoughts too. The only time I have ever bought insurance for a trip was when traveling to places where medical evacuation (air ambulance, for example) might be needed to access first world medical care.

Getting stuck for a hotel room and a couple of meals is chump change. Medical evacuation can run upwards of $100K quite easily. It's the latter you need and should look at very carefully.

Same thing if you're stuck somewhere for 2-3 weeks because you can't fly. In a pricey city, hotel + meals when you're not mobile can be pricey as well.

the policy you buy will depend on your needs.

Of course medical is #1. It's important to find out the level of coverage and what they cover (like if one of you is needs to fly home, will the other be covered to return with you) and if they only cover life-threatening emergencies, or how they handle even non-life threatening situations. Not all policies and companies are equal in this regard.

Generally medical insurance isn't very costly.

The other thing that I look for depending on circumstance of course, is a cancel-for-any-reason policy. I have bought them a few times when I think there is a potential risk of having to cancel the trip and particularly when the tour requires a non-refundable payment. I had one trip that I had to cancel with $18,000+ refunded from the insurance so depending on circumstance it can be worthwhile. I also paid a very large premium on that policy!

In addition to medical insurance I would also look at the cancellation/interruption insurance quite carefully.

If you miss one of your connections you might be looking at a few thousand dollars for a replacement ticket (depending on what connection you missed). I would say it's worth getting insurance to keep you on your chosen itinerary.

I agree with others that baggage insurance is third on the list. Just don't pack anything too valuable and I'm guessing from your travel plans that you might be able to absorb the replacement costs of a couple of cases and some clothes if the baggage does get waylaid.

Thanks for the feedback.

Next question is what would you expect to pay for this kind of insurance? Clicking through my home/auto insurance site (USAA.com), I'm led to a third-party called Travel Insured International. For about $80 total for both of us, I can buy their top-of-the-line product...$1 million evac/repatriation, $50,000 onsite injury/sickness as primary insurance, $2,500 lost bags, $500 delayed bags, $200/day trip delay, $750 missed connection coverage, plus some other stuff.

Other than the misconnect coverage those levels seem pretty substantial. I see these $24.95 travel insurance ads online but I'm inclined to trust this outfit more since I trust my own insurance company... Anyone know much about them?

ive used insuremytrip.com and have been pretty happy there.

That seems like a good price for a reasonable product. By no means "top of the line", fwiw. I have an annual plan that covers unlimited travel (but limited to 90 days max per trip) for $500 per year. That pays USD 500 for 4 hour delay and actual expenses up to USD 2000 per day for any delays. The catch with some policies is what they define as a delay (and requiring "medical necessity" for medical evacuation payment -- which basically means they never pay if you are at a foreign hospital. My plan pays for medical evacuation upon demand provided that there is an active medical condition, so I can use it to get home with a broken leg for example even though that has no "necessity".

Oh, I don't doubt that there are higher levels of insurance out there...this is just their "top-of-the-line" single-trip product of the three they offer.

The insuremytrip.com site is pretty good...

+1

Same here, although I can only comment on the purchase process, never needed to file a claim.

I've also had excellent service at tripinsurancestore.com. Lots of good info on their website.

For me the most important elements are

• Does it provide coverage for what I think or want it to cover. For example, for medical will it get me to a location of my choosing, or just the local hospital they decide has the ability to care for me, do my flights meet their requirements for trip interruption, etc
• Do I need <<insert type of coverage>> or do I already have it someplace else? Does my homeowners cover theft, does my current medical cover me outside the US, etc.
• Are they primary or secondary
• Is it worth it? No insurance is worth it if you don't ever use it, and if you need it, then it's totally a great deal. But over time you need to figure what all these premiums add up for things like cancelation and luggage protection and if it's worth it for you to keep paying for it. Medical is a totally different issue, one claim can easily pass all the premimus you have paid over the years, but baggage protection becomes a dollar loss at some point to keep buying it

On the is it worth it perspective:
Insurance sellers are in the business to make money, so from a financial perspective insurance is potentially worth it when:
-The cost of a claim is large enough to make an impact to your savings/wealth. For most people travelling, only medical/evacuation coverage meets this. A new ticket home or replacement luggage and clothes isn't cheap, but isn't enough to throw off your retirement savings.
-You are a bigger risk than the insurance company estimates. This is true if you are going to some relatively risky location that they might not be using to price your policy or engaging in risky activities. This is also true for cancellation policies if you know you have a high probability of cancellation. It might also be that you find yourself a particularly attractive target of theft or the like.

You might buy coverage that doesn't meet the above, but then really you are buying peace of mind rather than a good deal.