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Is travel insurance worth it? Seven things to consider

Is travel insurance worth it? Seven things to consider
(Al Seib / Los Angeles Times)

Reader Margo Kasdan of Seal Beach recently asked On the Spot whether travel insurance advertising was a giant scare tactic to get people to buy insurance.

The answer is yes, of course it is. But don't tune out the message just yet. In the Nov. 15 On the Spot column, I promised to tell you seven things you need to know about travel insurance. The list isn't exhaustive — exhausting, perhaps but not exhaustive — but includes some points to ponder.

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Also know this: Robert Meeds, an associate professor of communications who teaches advertising at Cal State Fullerton, explained in last week's column that a travel purchase is both an emotional and a rational decision, unlike, say, buying a refrigerator, which should be a rational decision unless you have an unusual relationship with your Frigidaire.

Because travelers tend to be savvy about not wasting money, it's tempting to turn off the "what if" messages you hear in your head and forgo insurance.

And then terrorists attack targets in Paris and you are stranded. Or injured. Or worse.

Suddenly, the randomness of life becomes clearer and scarier.

That life is highly malleable is clear to Leon Rbibo, president of L.A.-based company Pearl Source and a thirtysomething who travels often to Asia for business. "Plans are never set in stone and are usually changing all the time, as is typical in the business world," he said in an email. "This creates a huge need for travel insurance."

Rbibo says he spends as much as $1,000 a month on travel insurance.

I'm also not impartial on this topic. I'm not a fan of spending money unnecessarily either, but I've also recently filed two travel insurance claims that helped me recoup most of my investment.

Those experiences, coupled with interviews with several experts, brings me to these seven points:

— Travel insurance can be helpful if you're related to anyone of any age. I say this with tongue only partly in cheek. My two recent travel insurance experiences have stemmed from health emergencies with family members — one 9 months old and the other 94 years old.

Having an aged parent means issues will arise, but in my wildest dreams, I could not have anticipated the freak emergency that hospitalized our grandson for three weeks.

— Before you buy that insurance, please, please, please read the fine print. I promise you that you will be heartened, appalled, dismayed and comforted by what you see.

For instance, in comparing basic plans through InsureMyTrip.com, a travel insurance comparison site, I looked at three basic coverages, all about $550 for a hypothetical $10,000 trip to Australia in January.

Among the variables: Coverage for travel delay with policies Nos. 2 and 3 kicked in after six hours; policy No. 1 after 12 hours. The 12-hour plan paid $100 with a maximum of $500; No. 2 paid $150 but a $300 max and No. 3 paid $200 with a $1,000 max.

The dental insurance payout was $500 for Nos. 1 and 2 and $750 for No. 3. You're apt to find coverage for things you never knew you needed. Also think about what would be helpful to you, a slightly harder task, and make sure those are included.

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— Be especially cognizant of such issues as preexisting conditions. Those could nullify medical coverage, depending on the policy. Or you may be required to purchase the insurance within a certain amount of time — maybe within 14 days of buying your trip.

Be aware that the insurance company will dig into your medical history. When we made the sick-grandson claim, the insurance company demanded a year's worth of medical records, which was impossible since he was 9 months old at the time. It's also invasive. Be prepared.

— After you do the side-by-side comparison but before you buy, make sure you look at the policy's certificate. On InsureMyTrip, you'll see that certificate when you hit the buy button but you haven't yet spent a dime.

You'll see lots of asterisks and definitions. Read all of them. Print them out. A highlighter helps. And put them in a folder. The reason becomes clearer by Thinking Point 7.

— Before you push the buy button, check to see if the credit card you're using offers travel insurance as a part of its benefits. To find out, go to your credit card's site and start asking questions.

Ditto if you're using a travel agent to book your trip. Many will carry insurance on you or offer it. Ask.

— If you decide not to buy insurance, make sure you have sufficient funds to get yourself home — a medical evacuation — or to cover your costs at a hospital or clinic. You are self-insuring, so carry a credit card with a good-sized line of credit for that reason, said Michael Feighan, senior vice president and chief marketing officer at Chubb Accident & Health. (That's not the only reason you may need that line of credit, he added, so it's a good idea to have such a card any way.)

A really important note if you're covered by Medicare and are traveling abroad: You may not be covered. "Generally, Medicare does not provide coverage outside of the country," said Rachael Taft of Squaremouth.com, a comparative travel insurance site. "For those travelers with Medicare, there are international medical plans that provide emergency medical coverage while traveling overseas." To learn more, read the fact sheet Medicare Coverage Outside the United States.

Also, if you self-insure, find out ahead of time about nearby hospitals or clinics. With travel insurance, the insurer often acts as an advocate, finding medical facilities that can help you and, if you're abroad, a medical facility where your primary language is spoken. (Before you buy insurance, ask whether that list is available to you and how. By phone? Online? Email?)

In an emergency, of course, you go to the nearest place, but you don't want to leave your medical decisions to the concierge or the hotel if you don't have to.

— If you buy insurance, begin a file from the minute you hit the buy button. Keep every scrap of information. Take notes on every conversation. Copy your claim. Keep intimate details of your travel itinerary and copies of credit-card charges (and yes, always pay with a credit card, a point I'm not going to argue about because you won't change my mind).

Keep all this glorious paper in one file. You will need it. Sometimes you will need it over and over again.

You'll also need it to check the company's math. On our sick-baby claim, we found multiple errors and had to request corrections at least twice.

Of my two claims, that one was a bigger hassle. The other recent claim was much easier, partly because it involved "cancel-for-any-reason" insurance.

Cancel for any reason is what its name says. It costs more and pays out less, but in these uncertain times, it might be a way to go.

Insurance companies will tell you over and over again that being afraid to travel to a place is rarely a covered reason for canceling a trip, unless you have cancel for any reason.

Insurance companies also will tell you that a standard policy is designed to help you with what has happened, not with what might happen.

Should you spend the money? Travel insurance is not inexpensive. I really liked what Peggy Goldman, president and co-owner of Friendly Planet Travel, an Internet tour operator, told me: If you can afford the trip, you probably also can afford the insurance.

To which I would add this old chestnut: If you can afford to lose your investment, don't buy the insurance. But remember, life is random.

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Have a travel dilemma? Write to travel@latimes.com. We regret we cannot answer every inquiry.

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