The Usefulness of Travel Insurance

Posted by: Michael S. | Jan 02,2008


Do you intend on doing any traveling in 2008?  Hey, maybe make that a reason to pay down your debt this year.  It’s often better to have a goal in mind, rather than just paying off debt for the sake of it.  Travel is one of the top reasons people try to make room on their credit cards.  Of course, just putting that debt right back onto your credit card isn’t the best way to go, but if it means the difference between a fantastic vacation and sitting on your couch, you can justify the expense.  

There was a recent article by Gene talking about the need for credit monitoring if credit cards already have built-in fraud protection.  The verdict was that credit monitoring covers things that credit cards do not.  The same sort of question can be asked of travel insurance.  Most credit cards have some kind of travel protection built into the cards.  Some are better than others, such as those offered by Discover.  If so, is travel insurance necessary?

First, what’s travel insurance?  Basically, travel insurance protects you if something goes wrong when you’re out of the country.  This can involve reimbursement for plane travel and hotel reservations due to poor weather.  It will also potentially cover medical expenses, theft, and other problems that arise while traveling.  Is it worth it?  Like all forms of insurance, it’s a “just in case” policy.  There’s no telling if it will be needed, though if you’re visiting a more dangerous environment, it’s recommended more than if you’re just visiting a neighboring state.  

Credit card travel insurance can cover some of the above, but not all.  For example, the Discover card provides passport replacement insurance, ticket replacement due to illness or emergency, legal referrals if you run into trouble with the law, evacuation assistance, and more.  This is the most thorough possible coverage via a credit card, so don’t assume your Visa or other card has this type of travel insurance in place.  

The answer?  I would say get yourself a Discover card if you’re a very heavy traveler. It’s the best protection you can get with a credit card.  Otherwise, check your current card to see what sort of travel protection the card provides.  If you’re going on an extensive trip to a variety of locales, travel insurance may be necessary, but in the age of credit card travel protection it is not nearly as necessary as it once was.  

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