The question came up at the dental office, of all places. A patient checking out mentioned she'd bought a trip policy for a long weekend at the coast, and on the drive home I started wondering if we were being careless by never buying one. That night I pulled the trip envelope out of the kitchen drawer, laid our last three receipts on the table and asked myself what, exactly, we'd have lost if any of those trips had fallen apart.
For most of what we do, the answer is not much. Here's how I worked through it, with the usual note that I check people in at a dentist's office and I'm not anybody's insurance advisor. Read your own policies.
A travel insurance policy mostly protects money you've already paid and can't get back. The two big pieces are:
- Trip cancellation: pays back prepaid, nonrefundable costs if you have to cancel before you leave for a reason the policy lists, like a covered illness, a death in the family, or certain weather and evacuation situations.
- Trip interruption: pays back the unused part of the trip, and sometimes the extra cost of getting home, if you have to cut it short for a covered reason.
Most policies also bundle in some travel medical coverage, baggage coverage and help lines. Some sell an upgrade called "cancel for any reason," which does what it sounds like but costs noticeably more, usually only pays back part of the trip cost, and generally has to be bought within a short window after your first deposit. Policies in general seem to run somewhere around five to ten percent of the trip cost, depending on your ages and what's covered.
Look at what we've paid up front so far this year. The Wilmington trip had nothing prepaid at all, because we slept on my brother's couch. The Myrtle Beach motel in April was $79 a night plus tax, and the reservation could be cancelled for free up to the day before. Jones Lake was a $28 tent site. The rest of our money on any trip is gas, food and admission, which we spend as we go. If we don't go, we don't spend it.
So on a typical $250 weekend, the amount we'd actually lose if we had to cancel the night before is often zero, and at worst one night's room. Paying even $20 to protect that would be paying to insure money that isn't really at risk.
What our own coverage already handles
The other half of a trip policy is the stuff that happens once you're on the road, and a lot of that we already carry:
Health. We're both on Wes's employer plan. I called the member services number on the back of the card and asked what happens if one of us gets sick a few states away. The short version was that true emergencies are treated as emergencies wherever you are, and urgent care away from home has its own rules, so you call and ask before you assume. Since we stay inside the Carolinas, Georgia and Tennessee, we're not dealing with foreign hospitals.
The car. Our CR-V is on our regular auto policy, which goes with us whether we're in Maxton or Myrtle Beach. If something breaks, that's a repair bill, not a travel insurance thing.
Our stuff. We don't travel with much worth stealing. Our agent told me homeowners coverage generally extends to personal belongings away from home, subject to the deductible, which is higher than anything in our duffel bags is worth.
When we would buy one
There are a few situations where I can see us saying yes:
A bigger prepaid rental, like a beach cottage where the rent is paid in full weeks ahead and the cancellation rules are strict. That's real money we couldn't get back.
Anything booked during hurricane season on the coast. Here's the part I didn't know: many policies only cover storm cancellations if you bought the policy before the storm was named. Once it has a name, it's a "known event," and buying coverage then doesn't help with that storm. So if we ever do book something on the Outer Banks in late summer, the time to decide is the day we book, not the day we see a spiral on the weather map.
And a trip where the cancellation policy says nonrefundable in small print. Wes jokes that I read rental agreements like they're mystery novels, which is fair, but it's my job to read fine print all day and I'm not about to stop on weekends.
For now, our rule is simple. If we'd lose less than about $100 by cancelling, we skip the policy and keep that money in the trip account for gas. If it's more than that, I'll sit down and price it out.
