Should You Buy Travel Insurance for Your Next Trip?
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What is the main topic discussed in this episode?
and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.
Here's your Money Briefing for Wednesday, August 16th. I'm J.R. Whelan for The Wall Street Journal. A lot of careful planning goes into making travel arrangements. Flights, hotels, restaurant reservations. But things can and sometimes do go wrong.
The pandemic exposed to people just how much is out of our control when we're traveling. So maybe you're supposed to fly from Paris to London, but you're too sick to do that. So you end up having to stay in Paris.
How has travel insurance popularity changed since the pandemic?
Travel insurance, again, depending on your plan, could help you out with those extra hotel costs.
We'll talk to The Wall Street Journal's Ethan Steinberg about what else travel insurance covers after the break.
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
More vacationers are buying travel insurance, but policies can be complex and expensive. WSJ's Ethan Steinberg joins me to help simplify things. So Ethan, how popular has travel insurance become?
Travel insurance is wildly more popular now than it was before the pandemic. The pandemic exposed to people just how much is out of our control when we're traveling. At least that's what travel agents are saying. And data from a few different firms offers insight into this trend.
How much does travel insurance typically cost and what factors affect price?
IntelliTravel, which is an agency that oversees about 70,000 travel advisors across the country, they said that the number of clients who purchased insurance with Allianz, which is their largest travel insurance partner, grew 48% year over year through June. And the revenue bump associated with that rise was about 75%, meaning that people aren't only buying more travel insurance, but they're buying costlier and more comprehensive plans.
48%, that's a big jump.
It is, yes. And that's just year over year. And it kind of grew the year before that as well during the pandemic.
So when somebody buys travel insurance, how much do they expect to pay?
There's a range. It could be anywhere from less than $50 to thousands. And primarily it depends on two things, the total trip cost and the age of the traveler. Of course, the more your trip costs, the more you'll be paying, and that's on average. And the same goes with age. Data from travelinsurance.com, which is a website that allows people to comparison shop between different travel insurance plans, it shows that the range is about 4% to 10% of your total trip cost.
Where can you buy travel insurance — at booking, through agents, or separately?
So if you're making reservations online or through a travel agent, is that where you would buy your insurance or is it a separate purchase?
If you are working with a travel agent, often they will offer you a bunch of different plans that you could choose from. If you are booking your travel yourself, often there's an option to buy travel insurance when you're checking out on your airline's website. But travel agents recommend comparison shopping so you could see which plan fits your trip best in terms of coverage and cost.
What's the main reason people purchase travel insurance?
Travel agents say that medical coverage is the main reason people are buying travel insurance. During the pandemic, when people were getting sick and you didn't know if you were going to catch the virus at any time and you were booking a trip, people wanted to have that safety and sense of security that they'd be able to back out of a trip if they were sick and their doctor said that they couldn't travel. I spoke to a 29-year-old personal finance coach from New York. She was in Mexico last year on vacation with her mom. She was insured, but her mom wasn't. And her mom ended up getting food poisoning, and they had to call a doctor to come to their villa. And the medical bill just for that visit, he didn't prescribe any medicine, just for the visit, it was $635.
But what if you get sick or there's some kind of family emergency before you travel and it affects your ability to travel?
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:01–0:58
2
How has travel insurance popularity changed since the pandemic?
0:58–2:12
3
How much does travel insurance typically cost and what factors affect price?
2:12–3:20
4
Where can you buy travel insurance — at booking, through agents, or separately?
3:20–5:06
5
What medical situations does travel insurance usually cover while traveling?
5:06–6:41
6
When will travel insurance cover cancellations for illness or pre-existing conditions?
6:41–8:44
7
Does travel insurance cover weather-related disruptions, delays, and missed connections?
8:44–9:38
Speakers
3 identifiedMore from WSJ Your Money Briefing
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