Planning a trip involves lots of unknowns and unpredictability including weather, family emergencies, job requirements and more. No one wants to save all year for a vacation only to have to cancel — much less lose every dollar you’ve spent in the process.
That’s where travel insurance comes into play.
But what does travel insurance cover, exactly? Do you need travel insurance for flights? And should you secure multiple policies for different portions of your trip?
That’s what a listener of the Clark Howard Podcast recently asked.
Do I Need Travel Insurance for Flights?
Should I get travel insurance for my flights? And do I need to buy separate trip insurance for each piece of my trip?
That’s what a listener asked on the Aug. 22 podcast episode.
Asked Sue in Wisconsin: “We are planning to book a tour to Ireland. If we pay with our Chase Preferred card for the tour and book airfare separately, does Clark recommend we buy separate travel insurance for the tour portion of our trip?”
Let’s start with the plane tickets first. They’re often the most expensive part of a big trip along with the hotel room(s). Fortunately, the way that airlines are set up now, you probably don’t need coverage for your flights.
“With airfare, you usually don’t need travel insurance. And you notice when you go to book airfare on most any airline, they’re now pushing you to buy insurance for that flight,” Clark says.
“But remember, with airlines now, in most cases, you don’t pay a penalty if you need to cancel. It’s just like you have gift certificate money moving forward.
“So you don’t want to insure an airline ticket unless you look at it as a once-in-a-lifetime trip and you’d never have an opportunity to use the money again.”
Should I Book Separate Travel Insurance Policies for Separate Portions of My Trip?
In most cases, Clark prefers that you buy separate trip insurance policies for each aspect of the trip. Although there may be an occasional exception.
“I would want you to buy separately for each aspect unless a trip policy would easily cover both events,” Clark says. “I like it to be linear. That you have one for the flight, if you buy a policy, and a second definitely for the tour.”
Clark also warned that trip insurance is notorious for finding reasons not to pay out a policy. So you should strongly consider adding a “cancel for any reason” rider to the policy.
“If there was an unexpected event like terrorism or something like that, that would make you not want to take the trip, know that the trip insurance is not going to cover that,” Clark says.
“The only way you cover that is if you add on a rider that includes cancel for any reason. You pay more for the trip insurance if you do that. But the cancel for any reason usually will pay you back 50 to 75%, depending on the policy, of the money you paid in.
“They have to have some amount that you lose. Otherwise, people would just flippantly cancel the trip.
“But I hear from so many people who have reasons the insurance claim is denied. And they lose all the money. But if they paid more for the unexpected, you’d get back, again, 50 to 75% of the money.”
Clark recommends against buying travel insurance for flights in 2023. But he does think it’s a good idea for certain types of trips — especially if you pay extra for the “cancel for any reason” policies.