AIG to offer travel insurance for Expedia customers, but should you buy it?

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AIG is teaming up with popular booking site Expedia to offer travel insurance worldwide.

But do you know when you should buy travel insurance and when you shouldn’t?

New player in travel insurance industry

You may remember the name AIG from when it had a dramatic near-total collapse during the 2008-2009 financial meltdown. But now the veteran insurer is slowly getting back into the game with a new insurance initiative.

Reuters reports AIG will offer travel insurance when customers are booking flights, hotels, travel packages and cruises on Expedia’s namesake site, as well as on other sites it own like CheapTickets, Orbitz and Travelocity.

The Expedia deal actually marks the second recent move in the travel insurance field for AIG. In October, it reached an agreement with United Airlines to sell booking insurance to its customers.

Keep the following pointers in mind if you’re thinking about buying travel insurance:

When do you need it?

Money expert Clark Howard has long said that travel insurance policies should always be purchased when you are taking a cruise, a tour or traveling on a trip that requires prepayment of thousands of dollars.

When don’t you need it?

Say you’re grabbing a $49 one-way fare from a cheap carrier like Southwest. It wouldn’t make sense to buy a trip insurance policy on such a cheap fare.

Incidentally, you can score that $49 Southwest deal on our sister site,!

What kind of coverage does travel insurance offer?

Policies are designed to protect consumers by giving them refunds in the event of illness to the traveler or immediate family member, or to provide a refund in the case of company, tour operator or airline default.


But here’s the thing: You’ve got to read the policy carefully to see what it covers and what it excludes. If you don’t have time to read through the entire trip insurance document, at least read through the “Summary of Coverages” section.

How much does it cost?

You should expect your policy to run you about 5% of the total cost of a trip, Clark says. You can comparison shop for a trip insurance policy that suits your needs at Be sure to pay special attention to any exclusions!

Know who you shouldn’t buy a policy from

Always purchase a policy independent of the cruise, tour or vacation planner. Never purchase the trip protection plan from the trip organizer. They are designed to protect only the company and not the consumer.

Bad weather isn’t a shoe-in when you want to file a claim

When it comes to the issue of weather, coverage will vary widely by policy issuer. Depending on the trip policy you buy, it may help you with weather or it may not.

“You really have to survey the marketplace to see if your particular weather circumstance will be covered,” Clark says. “A lot of the insurance policies offer false hope on that front. That’s why you have to read the policy before you buy it.”

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