Planning a big vacation? How to understand travel insurance.

After years of waiting and delaying, many retirees are planning to go on vacation in the winter months.

Booking in advance can be a great way to get the lowest prices, but how can you protect your travel budget? Travel insurance is part of the solution and there are a variety of travel booking options that can mean less risk if you change your mind.

Those who had travel plans for 2020 and 2021 booked before the pandemic will only know the disappointment of not being able to travel until, sometimes, this year, or 2023.

Whether you buy travel insurance depends on how much risk you want to avoid, the size of your trip, and your willingness to pay for travel insurance.

If a traveler is spending $5,500 on a trip for two, they’re buying travel insurance, says Megan Moncrief, chief marketing officer of SquareMouth.com, a travel insurance website. Total dollar travel costs have been “steady,” but have fallen slightly since the pandemic.

“Travel insurance has grown in popularity and demand,” says Moncrief. Travelers want to save money “but they want extra security.”

Travel insurance typically costs 4% to 10% of the total cost of the trip, according to Moncrief, and insurance policies vary so it’s best to consider your needs carefully.

Read: When to buy travel insurance and when to skip

Air travel has reached a new level this year, according to the Transportation Security Administration’s performance compared to Aug. 16, 2019 is the same date for 2020, 2021, and 2022. The numbers for 2022 are 1.99 million compared to 2.25 million travelers for 2019. In 2021, 1.61 million travelers passed through TSA while in 2020, only 566,000 were seen.

The cruise industry has been making a comeback but slowly. More than 75% of cruise ship members have returned to work, and nearly 100% are expected to be on the job by August 2022, according to the Cruise Lines International Association, a trade association. Some trips are running at full capacity while others are gradually increasing from the 50% restrictions that were in place during the pandemic.

Janet, who is in her mid-70s, has booked a long-awaited cruise to Norway in 2019, and she and her husband have not yet taken the trip, in part, because they did not want to go abroad this year.

Their first trip was scheduled for June 2020. That year, “cruises killed everything,” says Janet, so they rebooked their trip for 2021. The cruise company said the couple would receive their full refund or a voucher for 2021 and a 125% cruise credit. They can use the extra credit to upgrade their home or use it toward the cost of a cruise. “We took 125% and recalculated to 2021.”

However, in 2021 he did not want to travel. Since he had two years to use the vouchers, he decided to change it to 2022. Still hesitant to go abroad for fear of missing out if he has COVID-19, he booked 2023 at 125%.

They bought travel insurance from a third-party insurance company because their trip included pre-flight and in-flight travel. Insurance cost them $1,400 on a $20,000 trip, about 7% of the total, and the money was important to them. Janet said: “We just wanted to be safe.

Since they canceled their trip, the insurance company paid them all the money to buy the insurance. Currently, he has a voucher to travel in 2023, and needs to reassess whether he can purchase insurance for the entire trip.

Although the pair still have two years to sail, they are determined to go in 2023. “I want to go next year,” says Janet. He said: “Let’s go.” We still have our health.”

For their travel insurance from another insurance company, the couple decided on a “premium” insurance policy, they say, because they wanted to protect the cost of their trip and get solid coverage. escape protection. “We knew we wanted to keep (that) in case we wanted to be sent home,” he said.

What’s happening now is that travelers are buying travel insurance, medical care, and travel delay insurance, Moncrief says. A cancellation refund provides you with a pre-paid and non-refundable refund if your trip is canceled due to illness, injury or death and inclement weather, the need to work or if you are laid off. Flight delay refunds the cost of food and accommodation if your flight is delayed.

However, if you want to publish information that allows you to cancel for reasons such as fear of contracting COVID-19, experts recommend that you purchase an add-on that includes “cancellation for any reason.

“If you’re ‘frightened, unwell (to travel), or the border is closed,'” you generally won’t be covered by travel insurance that covers you for trip cancellations, travel interruptions, or medical care. “Covid-related concerns are not covered by cancellation insurance,” says Moncrief. for whatever reason it is very common.”

It usually increases the cost of insurance by about 40%. Additionally, “cancellation for any reason” refunds up to 75% of your trip.

Travel insurance often includes trip cancellation and post-departure benefits, says Syed Rizvi, head of specialty insurance, Nationwide. “The high cost is a deterrent to travel,” he says.

His estimate of the cost of travel insurance is 2% to 4% of the cost of the trip. Cancellation of the trip includes a refund of the pre-paid, non-refundable fee if you cancel your trip for any reason. Post-departure benefits include medical, relocation, lost baggage, and flight delay. It is possible to buy separate travel insurance but not all companies offer it separately.

When you buy travel insurance, you’re often buying what’s known as secondary insurance or “supplementary insurance,” which means the insurance is secondary to any other insurance you already have, experts say.

This means that the travel insurance company will look at the other insurance that you have first, the insurance that can cover, for example, medical. However, if Medicare is your primary health insurance, it does not cover you when you travel outside the US. However, if you have a difference in Medicare or an additional plan, it can reimburse foreign travel by 80%, for example, with a $500 deductible. . When planning a trip abroad, it’s a good idea to check your existing medical coverage when choosing the type of travel insurance you need. Also, check your credit card to see what type of travel insurance, if any, it includes. Cards with higher coverage usually have higher annual fees.

When you buy emergency medical care, it means that the travel insurance company is the first to pay or reimburse the benefits, rather than turning to other health care you may have, says Daniel Durazo, director of external communications at Allianz Partners USA. .

With post-departure benefits, the amount of coverage required varies. “It’s a personal decision,” says Erma Crock, director of product management, product management, and underwriting for Nationwide Specialty.

Consider your health, what kind of trip you’re taking and how difficult it is, if you’re on Medicare, and if you’re traveling only in the US or internationally and on cruises that include US and international ports. “It depends on where you’re going and the journey you’re on,” says Crock. He said: “Many travel insurance policies take into account the needs of the average person.”

For example, many have $1 million in evacuation costs and $250,000 to $500,000 in medical expenses, he says. Check the fine print to see what each plan you are considering includes. Some withdrawal options can be limited, so decide if you need more support before you buy.

If you want to make sure you’re covered before you leave for your trip, buy travel insurance within 10 to 14 days of paying your premium, says Crock, or buy it when you’re paying. to be sure you will be covered. to

How will you know if your deposit/refund will be refunded or not? Allianz Partners USA’s Durazo said: “Before you invest in a vacation deposit, make sure you pay close attention or ask what the rules say about withholding and refunding your money.” “Since the start of the epidemic, many travel companies have shown greater transparency in non-refundable payments, especially online bookings, to ensure that the terms of the reservation are in the right place so that customers will not miss them at the time of departure.”

If you see a good price for travel in December, January or February, booking can save you money later on.

If you are worried that you might change your mind, the money can be refunded until a certain date in the fall, then the cancellation penalties will start. Instead of booking online, talk to someone over the phone, either a travel company representative or an independent travel consultant who can explain your options to you. Another way to save money is to buy a return trip that will cost you less but keep your money for a refund until a specified date. Not everyone buys travel insurance but those who like its protection.

“When it happens, you wish you had it,” says SquareMouth.com’s Moncrief.