Travel insurance is almost always a waste of money. You will likely be paying for a product that in reality may offer you almost no trip protection anyway. One of the questions that I am asked the most is regarding travel insurance. This is a tricky topic without a simple answer and as with any type of insurance, whether that is home insurance or even health insurance, the company providing your policy will likely not payout for a claim easily.
When insurance companies pay out claims, they lose money. One single claim can amount to more than you will ever pay an insurance company in revenue. Therefore, the profit that an insurance company makes, and sometimes this is a substantial profit, are from customers who don’t make a claim. A customer could essentially be paying to protect themselves or their property for many years, and receive nothing in return, except the peace of mind.
When flights are canceled and your trip gets thrown into doubt, what protection do you have? Photo: … [+]
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Therefore, if you don’t expect to make an insurance claim, and whether that is for health or property damage, we all hope that we never have to, the question has to be asked whether paying for insurance over the long run is a waste of money.
Now, for your health or home, it is a very different story, and likely always prudent to have insurance. However, when it comes to travel insurance, it could be the case that you are actually paying for nothing.
The reality of the situation when it comes to travel insurance is that the provider will almost always find a way to not payout when your trip goes wrong. For example, if your flight to and from your home airport is canceled, then with many insurance providers you may receive some money back, but likely not all the money you actually paid for your trip, let alone your valuable vacation time.
Certain credit cars can offer travel and medical insurance benefits. (Photo Illustration by Karol … [+]
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But what happens if your trip is not point-to-point and involves a connection or even a multi-destination booking. Well, at that point, with many insurance providers, they are first and foremost going to rarely payout on a claim. Flying to and from your home airport will generally be covered if your flight is canceled but if you book anything beyond point-to-point then you will likely not be covered for flight cancelations. In addition to this, strikes, weather and other extenuating circumstances will be other attempts for an insurance company to not payout. This poses the question of whether insurance may really be worth purchasing.
That being said, many credit cards not only offer fantastic rewards points redemption schemes, and other perks such as airport lounge access, but some come with travel insurance included. This can be more than useful, and make up for paying an annual card fee on some cards.
Here are some of the credit cards that offer insurance on your travels, but this is by no means exhaustive.
Chase Sapphire Preferred Card
This card comes with trip cancelation and interruption protection of up to $10,000 per trip. This covers family personal illness as well for family traveling with you. Additionally there is trip delay protection of up to $500 for delays of over 12 hours for food and overnight accommodation, in addition to lost luggage and baggage delay protection of up to $100/day.
Chase Sapphire Reserve
This card offers the same protection as the Chase Sapphire Preferred card, but with additional cover, which also includes $2,500 for emergency medical or dental fees, which can come in very useful.
American Express Platinum
The Amex platinum card offers much the same benefits as Chase Sapphire cards do. Baggage loss and damage, trip cancelation and interruption and even medical expenses are covered, and can vary slightly per region, but certainly make the annual card fee worth if you travel a lot and may need to make a claim.