With the unofficial start of summer coming up on Memorial Day, summer travel will also begin.
Since travel decreased in 2020, travellers are eager to escape from daily life to tropical destinations or go sightseeing in the world’s oldest cities.
However, travel prices have gone up dramatically in the last few months, making it unaffordable for travellers to take trips.
The average cost that an American traveller spends on a vacation is $1814 as of 2021. With inflation at a high of 8.5%, travellers should expect to pay more for everything including airfare, lodging, transportation, and food.
Because of this, travellers are reassessing which trips are worth taking and adjusting itineraries to cut costs such as using public transportation or opting for vacation rentals instead of hotels to avoid high expenses.
Consider extra protection
High costs also bring concern for refunds in the case of unexpected expenses.
Flight cancellations, health emergencies and lost bags are some of the most common unexpected costs that you could incur while travelling.
Depending on what kind of trip you are taking, consider travel insurance to give yourself peace of mind.
What is travel insurance?
Travel insurance is a type of insurance policy that protects any money spent on domestic or international travel. Airlines and travel agencies offer travel insurance as an add-on to booking, but it may be worth seeking out your own policy.
Another way to get your next trip covered is to check your credit card perks, especially if you have a travel credit card because they offer travel insurance and discounts. Additionally, if you’re a frequent traveller, read the fine print on your credit card to see if you can take advantage of any travel-related perks.
The pros and cons of travel insurance
While you could opt for travel insurance through airlines or your credit card, this will only cover you for travel-related expenses and you often have to meet certain criteria before the airline or credit card company will compensate you for any loss or cancellations.
Having your own policy will also cover you in the case of medical emergencies while travelling, which is a benefit that airlines do not cover.
Your current medical plan also does not offer this as a benefit if travelling abroad. In the United States, your health insurance will not cover you for an emergency abroad, leaving you with a large bill. However, one exception to this is Medicare Supplement plans, but be sure to check with your broker to be sure you have a plan with this benefit.
Cost and benefits of travel insurance
Costs of travel insurance can vary based on the amount of coverage, where you are travelling to and for how long, and your age. Travel insurance costs on average $95 and falls into three categories: basic, middle-tier, and comprehensive coverage.
Basic coverage will cover you for lost baggage or trip cancellation, but you may have to pay a deductible for unexpected medical expenses. Middle-tier coverage offers this same benefit, but with health insurance included. Finally, comprehensive coverage will offer the lowest out of pocket expense for unexpected travel expenses but is generally the most expensive option.
Travel insurance is especially valuable if you are travelling out of the United States or plan to go on a trip where you will do something that could put you in danger of injuries, such as diving, hiking, biking, ziplining, or bungee jumping. Having extra coverage will ensure you can get proper medical treatment in the case of an accident. While this is unlikely to happen, it is better to be prepared.
In the case of lost bags or flight cancellations, having multiple connecting flights can be unpredictable, so having extra coverage for this may be worth purchasing if you are concerned about delays or loss of property.
Travel insurance in 2022
Since the COVID-19 pandemic, travel insurance sales have increased by 53%. With unexpected cancellations, border closures, and a limited number of flights, travellers are being extra cautious. Additionally, with increased prices, travellers now want to ensure they can enjoy their trip without the added stress of an unexpected expense.
Travel insurance companies are now including extra coverage for COVID-19 testing and cancelled trips due to border closures. Before the pandemic, these benefits were excluded as part of the coverage, so this additional coverage is proven to be a valuable benefit to travellers.
Considering travel insurance? Contact me today for a free quote.