Blog Article

How to Determine When You Need Trip Insurance

How to Determine When You Need Trip Insurance - A lot goes into planning a trip

By Geoff Curran, Wealth Advisor CPA/ABV, CFA®, CFP®
Published On 11/27/2018

A lot goes into planning a great trip – choosing flights and hotels, making sure you have all the necessities, finding a house sitter, etc. Personally, I’m never able to relax and enjoy the trip until I’m on the flight to my destination. I’m always worried something might go wrong, and some unforeseen circumstance may force me to cancel all or part of the trip.

By the time you get to the airport, you’ve usually spent a good chunk of money that’s not refundable. If you have to cancel last minute, you miss out on the trip you’ve been looking forward to for months, and you lose the money you spent so far.

When my clients tell me about the bucket list of trips they’re planning, I often counsel them to consider insuring their trip. In addition to refunding your flight costs, travel insurance can also cover the following:

  • Trip interruption
  • Emergency medical
  • Emergency medical transportation
  • Baggage loss and damage
  • Baggage delay
  • Rental car damage protection
  • Coverage for work-related emergencies
  • Missed flight connection
  • 24-hour assistance

It’s very reassuring to know you have this coverage in place if anything goes wrong before or during your trip.

Recently, a client had been looking forward to a 10-day Caribbean cruise, and had already paid for the cruise and the flights for their family of four. Three days before leaving, their 11-year-old son came down with pneumonia, so the family decided to cancel the trip. Thankfully, they’d purchased trip insurance, which cost only $150 per person. After filing a claim and providing a doctor’s note, the family was reimbursed for the trip costs and can use that money to take a trip at a later time. The important end to this story is that their son recovered fully and is doing better than ever!

You probably don’t need trip insurance for every trip. In some cases, the cost of the trip insurance may be more than the trip itself!

We use these guidelines when recommending our clients consider trip insurance:

  • The trip cost is greater than $2,500 per person.
  • Your trip is longer than a week.
  • For trips outside the United States, as there are more variables that could cause your trip to be interrupted or canceled.
  • When you’re traveling with children as their ailments are often out of your control.

We recommend the cost of this insurance policy be kept below 5% of your insured trip cost.

Many credit cards also provide comprehensive travel insurance as a cardholder benefit. Make sure to check if your current credit card provides this coverage before buying a separate policy. For example, the Chase Sapphire Preferred credit card provides this comprehensive coverage.

If you’re planning a trip, get in touch with your get in touch with your Merriman Advisor to help determine whether you need trip insurance, and where best to apply for the coverage.


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By Geoff Curran, Wealth Advisor CPA/ABV, CFA®, CFP®

Geoff has always enjoyed talking with people about finance, learning about their investments, financial strategy, and business sense. His interest only deepened with time, and what began as a hobby has now become a life-long passion, with an unparalleled passion for continuing education that makes him an expert in many subjects from traditional taxes and investments to business succession planning and executive compensation negotiations.

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