The best way to protect your holiday vacation trip

holiday vacation trip

Expectations are high for the upcoming holiday travel season. But given the pandemic health concerns, people are also trying to find the best way to protect their holiday vacation trip.

It’s not easy. A new report by American Express finds travelers are cautiously optimistic about traveling in the next six months. Just over half (55%) of consumers who typically travel domestically anticipate feeling “comfortable” traveling to a domestic destination between now and February.

And a survey by Hopper suggests 39% of Americans plan to travel during the holidays. For more than half of those on the road (55%) it will be their first time traveling since the start of the pandemic.

Fall is here and so are travel worries

“Now that it’s officially fall, many Americans are planning their holiday travel,” says Katia Iervasi, an insurance expert at Finder.com. “While the type and frequency of trips may look a little different this year, it’s still just as important to purchase travel insurance to protect yourself — and your wallet.”

The only holiday travel season in recent memory that comes close to this one was 19 years ago. That’s when the 9/11 attacks froze travel for several months. But the similarities don’t end there. After the Sept. 11 attacks, interest in travel insurance roughly doubled, with 20% of travelers buying insurance. Now, 45% say they’re likely to purchase travel insurance for a future leisure trip.

“The type of insurance to purchase for holiday travel depends on the needs of the traveler,” says Bailey Foster, a vice president at Trawick International. “Some coverage may work for one kind of traveler and another may work for someone else.”

Named perils or “cancel for any reason”?

One of the biggest decisions travelers will have to make when they’re looking for the best travel insurance for a holiday vacation is: Should I buy a “cancel for any reason” policy or not?

A cancel for any reason policy costs between 10 to 12% of the value of your trip. But it also gives you the flexibility to cancel and receive a partial refund.

“As long as you cancel in the required timeframe — typically 48 hours before your scheduled departure — you will recoup up to 75% of your trip expenses,” explains Jeremy Murchland, president of Seven Corners. “You can cancel for any reason you wish.”

A named perils travel insurance policy, which costs about half as much as a cancel for any reason policy, will cover you only if you cancel for a reason specified in the policy — one of the “named” perils. Generally, a new COVID outbreak wouldn’t be a covered reason.

So the first question a traveler has to ask is: Should I pay more for guaranteed coverage — or should I save money and take my chances on a policy I may not be able to use?

Other considerations to protect your holiday vacation

What are some other things to look for, when it comes to protecting your holiday vacation trip?

Luggage coverage and travel delays. “Even at the best of times, the holidays can be a busy — and sometimes chaotic — time of year for travelers,” says Sherry Sutton, vice president of marketing at Travel Insured International. “At the very least, you should have travel and baggage delay coverages.”

Serious illnesses and severe weather. “They can disrupt even the best laid plans for holiday travel,” says Daniel Durazo, a spokesman for Allianz Travel. “In addition to the normal challenges of traveling during the holidays, today’s unprecedented situation will add another layer of concern for travelers who are headed out to visit family and friends.” Durazo says a good travel insurance policy can provide coverage for illnesses and injuries that may cause a trip to be canceled, as well as provide reimbursements for expenses incurred during a lengthy delay.

Coronavirus coverage. “Select standard travel insurance policies can offer cancellation coverage if a traveler contracts coronavirus and is unable to travel,” notes Kasara Barto, a spokeswoman for Squaremouth. “However many of the impacts of the coronavirus pandemic, including changing travel restrictions, flight cancellations due to lack of passengers, or accommodations canceling reservations due to COVID-19, won’t be covered by a standard policy.” Again, check with your agent or travel advisor about a “cancel for any reason” policy.

Expert tips for buying insurance to protect your holiday vacation trip

It took a while for travel insurance companies to figure out how to handle COVID. Some temporarily changed their policies to accommodate pandemic-related claims. Specifically, they added temporary accommodations to provide coverage for cancellations, interruptions and medical emergencies for customers who become ill with COVID-19 either before or during their trip.

Others now offer COVID-19 add-ons that cost extra, but cover some of the expenses associated with a coronavirus diagnosis.

“If you are traveling right now it could end up saving you money in the long run,” says Rayleen Silva, who writes for Covered Traveler’s blog. “Anyone who is traveling within the United States should know how expensive our healthcare system is. So purchasing a travel insurance policy can save you hundreds, if not thousands, in the long run.”

One way or another, say experts, you should ensure your next travel insurance policy covers a possible coronavirus outbreak.

Travelers make a lot of mistakes when they plan holiday vacation trip. One of them is not knowing the limits of their travel insurance policy.

“Be aware that there are usually item and maximum benefit amounts for personal belongings,” notes Lisa Cheng, a spokeswoman for World Nomads. “Depreciation — the decrease of an item’s value over time — is taken into account when calculating claims reimbursements. There could also be exclusions such as jewelry and antiques.”

Travel insurance companies focus on safety

Travel insurance companies are doubling down on safety this fall. For example, Allianz Partners this week upgraded its TravelSmart mobile app to address some of the concerns of post-pandemic travelers.

Allianz added a new alert center, which offers location-specific travel alerts. They’re designed to keep travelers a step ahead of developments that could affect their trip. The alert center provides updates on situations such as transportation disruptions, weather advisories, and holiday closures, as well as health and security risks. Plus, it includes expert advice on navigating local disruptions.

The insurance company’s customers have ranked safety and security alerts as the second-most important service. It’s exceeded only by the ability to file and track a claim. (TravelSmart already allows you to handle claims on the app.)

Late last year, AIG’s Travel Assistance App got upgraded with a new hyper-local safety awareness functionality for more than 65,000 cities and neighborhoods. The feature, available through a partnership with the safety platform GeoSure, was aimed at business travelers.

But do you really need all that insurance?

Reality check: Do you need a pricey travel insurance policy if you’re just driving to Grandma’s for Thanksgiving? Probably not. The best travel insurance for your holiday vacation trip might be no insurance.

These policies and new apps are designed for travelers who cover long distances. They’re also paying for airfare, car rental and hotel expenses. Travel insurance won’t cover “free” stuff. Travel insurance doesn’t cover accommodations at mom and dad’s place or an award ticket booked with points. So even if you have insurance, you won’t get compensated for those losses.

And before you buy insurance, make sure you check your existing insurance coverage. Chances are your auto, home, medical or renter’s insurance will cover parts of your trip.

You may also have coverage through that travel credit card. You know, the one with the ridiculous annual fee that churns out worthless frequent flier miles with every purchase. Yeah, that one.

Even after taking all your existing coverage into consideration, you might still need travel insurance. Because if the first nine months are any indication, the rest of 2020 is going to be an interesting year for travelers.

Posted in Smart Consumer Tagged , ,

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.

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