If you’ve ever lost your luggage, there’s a good chance that it ended up in Scottsboro, Alabama. The small Southern town is home to Unclaimed Baggage, a 40,000-square-foot warehouse stocked with items that airlines failed to reunite with their owners, all for sale to the thousands of yearly visitors who walk its aisles and shop the orphaned goods. Visitors expect to find the common things one might pack for a trip such as cameras, ski equipment, and DVDs — many well below their original retail prices — but there’s also diamond rings, tuxedos and designer gowns, Rolexs, and even, occasionally, shrunken heads and suits of armor.
Although airlines successfully deliver the majority of lost bags to back to travelers, one scan of the hangar-size facility might make you think twice before opting out of travel insurance the next time you book a trip.
But is that the right decision?
Do you really need travel insurance, or is it simply a waste of money?
We sought expert advice from Eldad Boker, EdD, professor at Johnson & Wales University Providence College of Hospitality and the College of Online Education. He has spent the last 30-plus years teaching and studying international travel and tourism and has visited 74 countries throughout his travels.
According to Professor Boker, here are the top three questions you should ask yourself before purchasing travel insurance.
Question 1: What does the insurance cover?
There are several different types of travel insurance (car, trip cancellation, lost luggage, terrorism, etc.), and just like you wouldn’t pack a snorkel for an Alaskan cruise, you don’t need coverage that doesn’t match your trip. Once you’ve narrowed down what you need, make sure you know what it covers; for example, health insurance may cover only doctor visits or hospitalization or both.
“If you’re traveling internationally for any length of time, you should seriously consider purchasing medical and evacuation coverage,” Boker says. For example, imagine that you are in a Central American jungle or on a Himalayan mountaintop and need urgent medical care. With insurance, you could be evacuated for less than $100. Without it, you’re looking at a “large out-of-pocket expenditure of perhaps thousands of dollars’” according to the Centers of Disease Control and Prevention.
On the flip side, Boker believes that car rental insurance is typically unnecessary. All of the major credit card companies offer rental insurance, so you may already be carrying in your wallet the same benefit the rental car company is trying to sell you for $15 per day (just be sure to use that card to rent the car). A quick call to your credit card company prior to your trip can give you the specific information on your coverage — and peace of mind.
In addition, if your ticket is already refundable, why purchase trip-cancellation insurance? “There’s no reason to be over insured,” says Boker.
"Never buy any type of insurance on the same site where you purchase your travel. In general, you will pay more money for less coverage."
Question 2: How much does it cost?
It’s wise to shop around for travel insurance, but, other than the provider, there are a few factors that will affect how much you pay.
- Age and health of travelers
- Length of trip
- Cost of travel
- Various options
Clearly, some items you have control over and some you don’t. Expect to pay 4 to 12 percent of the cost of your trip to insure it.
Question 3: What is the reimbursement process if I do need to make a claim?
So you’ve decided that you need to purchase travel insurance and you found a reasonable package that covers your trip. Don’t forget to ask about the reimbursement process, if and when you have to access your plan. “It can be very easy … or very difficult,” says Boker.
Overall, Boker says that travel insurance is “very valuable.”
He offers this rule of thumb: “Never buy any type of insurance on the same site where you purchase your travel. In general, you will pay more money for less coverage.”
So where should you shop for travel insurance? Here are a few sites he recommends: