Is Flight Insurance Really Worth It?

Imagine saving up all year to take the family on a Disney cruise, only to have your flight canceled and the cruise take off without you — wah wah. While there may be nothing to help make the kids feel better (ice cream’s worth a shot), there is a solution to help take the sting out of the financial loss — flight insurance.  

But do you really need it for every trip? Probably not. Let’s dive into the details and help you understand when you may want flight insurance and how it can help protect you and your family when you travel. Fasten your seat belts.

What Is Flight Insurance?

Simply put, flight insurance reimburses you for any nasty losses related to air travel. This typically includes coverage for trip cancellations, interruptions, delays, baggage loss and delays, medical emergencies, and emergency transportation. And some can even add on additional rental car damage benefits and accidental death and dismemberment provisions. Flight insurance typically has to be purchased within 15 days after booking your trip.

What Does Flight Insurance Cover?

Trip Cancellations

What happens if there’s a sudden family emergency or some other unforeseen event and you have to cancel the trip? Trip cancellation coverage will help reimburse covered prepaid expenses as listed in the policy. Covered reasons typically include:

It’s important to understand that the “covered reasons” listed in your policy are very specific. Cancellation due to illness may require proof of a doctor’s visit and advice. And a family member’s illness may have to be life-threatening to be covered. Some plans, however, may offer a Cancel for Any Reason option at additional cost.

Flight Cancellations

Trip Interruption and Trip Delay coverage are similar to Trip Cancellation. If your trip is interrupted or delayed for, again, a covered reason, you’ll be reimbursed for prepaid or additional expenses up to a specified benefit. 

Say your flight’s cancelled and the tour left without you. Trip interruptions include covered reasons like lost travel documents or natural disasters. Reasons covered by Trip Delay include weather delays that cause overnight stays or additional travel to catch up with a cruise.

Lost Baggage

Technology has reduced the amount of lost and mishandled luggage that can come with air travel. And according to a study by SITA, an air transportation technology company, less than 6 bags per thousand were mishandled — and only 3% of those were actually lost. The maximum an airline will pay for a lost bag is $3,500. 

The airline may reimburse you for expenses as a result of baggage delay, like purchasing some new clothes. The airline won’t, however, reimburse you for stolen luggage. 

Flight Insurance Baggage Loss and Delay will reimburse you for lost, delayed, or stolen baggage during the entire time that you are traveling, not just during your departure and return flights. Baggage Loss and Delay coverage will only reimburse to the extent that the airline does not.

Injury or Illness

The cost of a medical emergency while traveling can be staggering. Domestic health insurance may only provide partial coverage while traveling overseas, and in some cases like Medicare, no coverage. The Medical Emergency Benefit covers expenses that come up throughout your trip, including departure and return flights, up to the limits in the policy.

Medical evacuations typically start at $25,000 and can be as high as $250,000. Emergency Transportation Coverage provides for emergency evacuation, medical repatriation, transport to bedside, and return of dependents. Medical Evacuation transports you if local facilities cannot treat you. 

This provision is especially valuable if you’re traveling to remote or undeveloped areas. The Medical Repatriation benefit pays to bring you back to your primary residence. The Transport to Bedside benefit will arrange to pay for one family member to stay with you. 

And lastly, the Return of Dependents benefit pays to transport minors traveling with you back to their primary residence. Many polices provide a 24/7 medical assistance service to help you arrange for treatment.

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How Much Does Flight Insurance Cost?

The cost of flight insurance is based on the cost of your trip, your departure and destination locations, the number and age of covered travelers, and the policy provisions. Three of the best-selling companies that offer flight/travel insurance are Allianz Global Assistance, Generali Global Assistance and Seven Corners. 

To give you an idea of the insurance costs and coverage you're looking at, here are quotes from each of these companies under the scenario that a family of four is flying to Miami to board their Disney Cruise. With a total cost of the vacation assumed to be $7,200, these are the results:

It's important to understand that the insurance cost will change based on the benefits that you choose. If you're going on a cruise, it’s likely you won’t need to rent a car. If the cruise only goes to domestic destinations, you may not need medical coverage. 

You'll want to check with your insurance carrier or professional agent regarding coverage if the trip itinerary takes you to Puerto Rico and the US Virgin Islands. And when it comes to the Cancel for Any Reason provision, it adds more cost, but it definitely provides more benefit flexibility.

So when it comes to finding the right option for you, it's all about taking a close look at the costs and concerns that may come up with your travel. If the risks are high, then adding a few hundred extra bucks to the cost may be totally worth it.

When Should You Buy Flight Insurance?

Well, here are a few times when it's worth looking into flight insurance:

• If you’re traveling internationally: If your health coverage doesn’t extend to international travel, like Medicare, you should consider flight insurance. An illness or injury can be financially devastating without any coverage. The medical assistance service will help you navigate an unfamiliar health system.
• If your prepaid expenses are significant: Say you’ve already paid for a cruise. A cancelled or delayed flight could mean missing a portion, or all of, the cruise.
• If you have family members who require hospitalization or care: Imagine if an aging parent required hospitalization and you had to return home.

Is Flight Insurance Worth It?

Laurie Shuss, of Dream Vacations Travel Agency in Bonita Springs, Florida, has been a travel professional for 15 years. She often recommends flight insurance to her clients. 

“Travel insurance is an absolute must if you are traveling outside of the United States. If a trip is expensive, out of the country, or you have aging parents at home it is imperative that you have coverage.”

She even shared a story about when one of her clients was traveling on a Caribbean cruise with her family and elderly mother. “The mother became ill and ended up in the ship's infirmary for several days until they reached a port where she could be transported to a local hospital and then flown home. The total bill reached more than $50,000 in out-of-pocket expenses. The guest was able to file a claim with the insurance company and recoup most of those expenses.”

As is the case with many types of insurance, the best thing that can happen is you don’t need to use it. Flight insurance can provide valuable protection from travel mishaps and even disasters for a pretty modest cost. Look into coverages that you may already have, like the credit card that you used to purchase the ticket. And if you have any preexisting medical conditions, be sure to ask what’s covered. 

Laurie advises, “Read the policy carefully so you understand the coverage you are purchasing. Make sure it defines exactly who is covered, including family members, and medical conditions.” 

Finally, talk to your local agent or health insurance company about what’s covered when you are traveling.

Your Local Independent Insurance Agent Can Help You Make a Smart Choice

Independent insurance agents are total pros at matching the most appropriate policy to your needs. Shopping around for insurance policies can be tricky, confusing, and time-consuming, and an independent insurance agent's role is to simplify the process.

They’re also there to help make sure you understand your coverage and walk you through any issues that may come up. That’s especially important to know when you are traveling. Safe (and prepared) travels to you.