Buying Trip Insurance

by: Peter Greenberg, from: AARP, May 20, 2009

I'll be flying to Australia and New Zealand in September and October for 15 days. I'm contemplating getting travel insurance for approximately $350, which is about 6 percent of the tour price. Would you consider travel insurance for this trip?

–Gin, Honolulu

A: The answer to your question is emphatically YES, YES, YES! This is a perfect example of when travel insurance is a GREAT idea.

I always advise people to compare the cost of the trip with the cost of the policy to see if it makes sense. For example, there’s no point paying $25 for a policy to insure a $125 plane ticket to visit your aunt in Milwaukee. That $25 works out to a full 20 percent of the cost of a not-very-expensive ticket.

However, in your case, you’d be paying only 6 percent of the total cost of your trip to protect a VERY significant chunk of change—about $5,800 by my calculations.

Ask yourself, would you be OK writing off that much money if you suddenly had to cancel your trip because of injury, illness, or a death in the family? I think your answer would be “No way!” Furthermore, with travel insurance, you’re also covered if you break your leg on the trip and need emergency medical care or if your bags are lost or stolen. So, even though $350 sounds like a lot of money to shell out on top of an even larger amount, it is a SMALL price to pay for peace of mind, both before and during your trip.

And remember, I advise against buying travel insurance from the tour operator. Go to www.insuremytrip.com to compare different rates and plans.