Dubai: Anything from an unexpected medical emergency or an abrupt trip cancellation can befall any traveller, and any such an event would not only hamper your travel plans but it can turn out to be very costly for you as well. But is buying travel insurance worth the extra cost? Let’s find out.
The average cost of travel insurance is at least 5 per cent of your trip costs, according to Forbes Advisor's analysis of travel insurance rates recorded worldwide. For example, if you purchased a trip worth Dh5,000, travel insurance policies available to you will likely cost around Dh250.
“Rates can vary substantially depending on the plan purchased. For a Dh5,000 trip, our analysis saw rates as low as Dh154 and as high as Dh437,” said Sophia Sanchez, travel planning manager at a UAE-based European tour operator.
“What you'll pay is based on several factors, such as your total trip cost, the benefits included in the plan and your age. Deciding if travel insurance is worth it depends on whether your trip is refundable, where you're going and how much coverage you get from your trip.”
Deciding if travel insurance is worth it depends on whether your trip is refundable, where you're going and how much coverage you get from your trip
When travel insurance is worth the extra cost
To gauge whether travel insurance is worth the extra cost, travel planners reiterate that the first question you need to ask yourself is whether you’re willing to risk losing money when your plans of going on a trip falls through?
“Travel insurance will reimburse you should an unforeseen event happen before or during your trip. That can include medical expenses, having to cancel your plans, lost baggage or even flight delays,” added Sanchez. “This helps one decide whether or not he or she should opt for travel insurance.
“But when deciding how much to spend on insurance, look at what coverage you may have through the basic policy. You may also want to consider additional insurance if you are concerned about a medical condition that could flare up that may not be covered by your existing health plan.”
Travel experts often recommend that if you’re going to get trip or travel insurance, go for the comprehensive kind. You can even purchase a policy that comes with a ‘cancel for any reason’ safeguard, which is ideal for emergencies. But is a comprehensive plan worth the additional cost?
Comprehensive or basic travel insurance plans?
Basic travel insurance policies are often cheaper than comprehensive policies but may only cover you in a couple of ways. For example, a basic insurance policy might provide some medical cover and personal liability insurance but may not cover you for things like lost luggage or cancellation fees.
On the other hand, a comprehensive travel insurance usually covers delays, cancellation due to sickness or death, lost luggage and some emergency medical costs. The more a travel insurance policy covers, or the higher claim limits it has, the higher the mean premium.
“As to whether or not comprehensive plans are worth the cost, the good news for a policyholder is that he or she has quite a bit of control over the cost of travel insurance, because they can choose what coverage they need or want,” said Dubai-based travel consultant Richa Dev.
“For contrast, if a homeowner needs to insure their house, there aren’t many things they can do to affect the cost, beyond shopping around for the cheapest carrier. With travel insurance, the basic tiers generally have less medical coverage or lower limits to claim than higher tiers.”
As to whether or not comprehensive plans are worth the cost, the good news for a policyholder is that he or she has quite a bit of control over the cost of travel insurance
Know what travel insurance your credit card covers
When it comes to your credit card's travel coverage, it depends a lot on your card’s policies and trip details, but there are some definite benefits. “One way you may be able to rely solely on credit card insurance are for car rentals and checked-in luggage,” added Dev.
“That's because rental car insurance and lost luggage coverage are included for cardholders of certain travel credit cards. Once you confirm the coverage you have by reading your credit card's terms and conditions, you should also check limits to make sure coverage is sufficient.”
For example, you may find your credit card offers lost baggage insurance with a $500 (Dh1,500 to Dh2,000) limit, which may not even be enough to replace your suitcase, let alone your belongings.
If the limits your credit card sets leave you feeling prone to possible travel-related accidents, it may be worth looking into buying a travel insurance policy with a more comprehensive coverage.
• Medical expenses and cover for getting you home if you fall ill abroad
• Personal injury and cover for accidents or damage caused by you
• Cover for lost or damaged items, or even delayed travel baggage
• Cover for cancellation or missed flight departure when travelling
The cheapest policy may not offer best value for money, so it's important to check what the policy includes as well as how much it costs.
“You can check what different policies offer and how much they cost by using an online comparison website, but comparison websites usually only offer general cover,” added Sanchez. “If you have particular needs, it may be better to find an insurer that offers specialist cover.”
While you can buy travel insurance from anywhere, be it an insurance company or a bank, or the traditional route i.e. travel agents, online comparison websites or holiday companies.
“At times, travel insurance might be included as an extra service offered through your bank account or credit card. So, check how much you're paying for this and the kind of cover it offers. For example, cover may be limited as a couple. It might be better to buy a standalone policy,” added Dev.
“Your travel agent may offer you travel insurance as part of a package holiday. You can opt for this if you want to, but you don't have to buy this insurance.”