Travel insurance and trip protection sound like good ideas in a world of pandemic uncertainty. but is there any difference between the two? And if so, do you care when you’re planning your next vacation?
short answer: yes, there is a difference between travel insurance and protection. and it does matter.
“Trip protection is not travel insurance, but a very limited form of trip cancellation coverage that is automatically insured by the travel provider,” says john cook, president of quotewright, a provider of travel insurance quotes. trip.
Also, trip protection can refer to a fee paid to a tour operator or cruise line (remember them?) to avoid a cancellation penalty. It could also refer to another form of protection that, while not insurance, can be an important supplement to insurance.
breaking it down
travel insurance is a regulated product that covers the losses you may suffer while traveling. these can include car rental damage, flight delays, lost luggage, medical expenses, and trip cancellation. a typical policy costs between 5% and 7% of the cost of your trip.
travel protection is an unregulated product usually offered by a travel company or travel agency. the most common trip protection plans allow you to waive a cancellation fee if you are unable to take your trip. some also allow you to receive a credit for the full value of your trip. Costs can vary, but it’s usually less expensive than travel insurance.
It seems pretty simple, right? wrong.
many travelers, and even travel professionals, use “travel protection” and “travel insurance” interchangeably.
“They are quite different,” says lum kamishi, editor of visaguide.world, a visa site.
One reason: Some companies, particularly cruise lines, will bundle protection with a traditional travel insurance product. so, in effect, you’ll have a hybrid product: part travel insurance, part protection. This usually only becomes an issue if you’re booking a cruise and receive an offer to “protect” your cruise with insurance. you should check the fine print carefully to make sure you’re buying insurance, not just a waiver of cancellation fees.
The other definition of protection: There is more confusion ahead. companies that offer other forms of travel protection, such as medical evacuations or security services, are sometimes grouped under travel protection. this is a very different type of “protection” than a cancellation waiver.
For example, your travel professional might refer to a medical membership like MedJet or a service like Global Rescue, which provides evacuation and safety services, as “protection.” it is, of course, but not in the traditional sense.
Global Rescue CEO Dan Richards says these services can offer benefits that insurance doesn’t. For example, your company offers services ranging from field rescue from the point of your illness or injury, to transportation to a suitable hospital, to ongoing internal case management and 24-hour security or medical advisory services. of the day, 7 days a week.
“Travel insurance policies are designed to protect your wallet,” he says. In the broadest definition of “protection,” she explains, “travel protection services can protect your health and life, even during a pandemic.”
my brush with travel protection scammers
I started covering travel insurance and protection thanks to a product that called itself “travel protection.” Decades ago, when I was just a novice reporter, a company started offering travel protection policies to cruise ship passengers and people buying expensive tours.
But when customers filed a claim and were denied, they discovered that the protection was essentially unregulated insurance. When state regulators began closing in on these insurance fraudsters, the companies would dissolve and move to a new state. then the scam would start all over again.
As a consumer advocate specializing in travel cases, I dealt with all of the dissatisfied travelers whose claims were repeatedly denied. Eventually, by working closely with victims and law enforcement, we put these travel protection scammers out of business once and for all.
Today, travel protection is clearly labeled “not insurance” and regulators are quick to clamp down on any company that claims otherwise. but two decades ago, that was not the case. and the travelers paid a high price.
when a travel protection plan makes sense
So which one should you buy? depends. Mayuri Kashyap, a travel blogger at ToSomePlaceNew who covers Europe, recently purchased the Travel Protection Plan for a cruise ship in Europe. the package is $5,000 with an optional $350 trip protection plan. kashyap may cancel at any time before your trip and receive a $5,000 credit.
“the reason we accepted the protection plan was that we needed a schengen visa to travel to europe, and it was the first time we applied for such a visa,” he explains. “Having a prepaid travel plan, itinerary and accommodation was part of the Schengen visa process. And if we were denied a visa, we are glad to know that we can use a credit of $5,000 for a trip to any other place in the world.”
kashyap says trip cancellation travel insurance would have been overkill. She already purchases separate health insurance, and seasoned travelers like her also rely on her credit cards to cover trip interruptions or lost luggage.
when travel insurance makes sense
If you’re looking for comprehensive coverage for issues like medical transportation, lost luggage, and car rental, travel protection won’t work. you’ll need to find coverage through your credit card, health insurance, or car insurance, or purchase an actual travel insurance policy.
“Travel insurance covers medical emergencies such as accidental injury, unexpected illness, repatriation and evacuation,” says kamishi of visaguide.world. “Furthermore, travel insurance could be seen as more inclusive than travel protection. it can also include things that are covered by travel protection, but the reverse would not be true.”
quotewright cook says he advises his clients to avoid travel protection.
“In today’s environment, it would be a mistake for a traveler to purchase a travel protection plan,” he says. “The plans are not backed by an insurance company, so travelers are not covered by legal requirements and protections. additionally, travel protection plans do not provide protection in the event that the travel provider defaults through bankruptcy.”
tips on travel protection
cooking is correct. in normal times, travel protection might be an option. But these are not normal times. With several cruise lines on the verge of bankruptcy, you could easily buy a protection plan, only for the company to go under. And don’t confuse that kind of protection with a medical membership plan, which is a good idea to consider at any time, and especially now.