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Do I Have To Travel Insure My Entire Trip? - 2021 Review


When it comes to understanding trip insurance, one of the most-asked questions is: how much of my trip can or should be insured? Do you have to insure your entire trip?

This Article Has Your Answers

Before embarking on a big vacation or important business trip, plan your trip insurance needs carefully.

You can make a more informed decision when you know the lingo and understanding your options before purchasing.

This article is your guide for how much Trip Cost you should insure.

It's a quick read, so you can use this valuable information before insuring your next trip.

What Does Trip Cost Mean?

Simply, Trip Cost refers to the insurable dollar amount that you request the insurance company to cover. However, this is not an arbitrary number.

Some parts of your trip may be insurable, and some may not. Strip away everything that will not or cannot be insured to arrive at Trip Cost.

Trip Cost sounds straightforward enough, but each policy has a narrowly defined meaning in the insurance world.

To define Trip Cost, you first need to know what parts of the trip are insurable.

What Is An Insurable Trip Cost?

You would only include the travel arrangements that are prepaid and non-refundable.

No need to insure the money you will spend once you are on the trip because you would not lose it if you cancel before departure. Also, if your travel arrangement is fully refundable the day before departure, don't insure it since you would not lose money if you canceled.

To reach the total Trip Cost, add up the insurable portions of the entire money spent on travel arrangements. Costs could include:

  • Your cruise fare (usually non-refundable)
  • Your airline tickets (no need to buy refundable tickets – check out our Airline Hack!)
  • Hotels (often the case on booking websites)
  • Vacation rental homes/condos like VRBO or Airbnb
  • Car rentals (if you must pay in advance and there is a cancellation penalty – more common outside the US or at small/local rental businesses)
  • Rail/bus passes if prepaid and non-refundable
  • Transfers to/from the hotel, airport, port
  • Tours (usually non-refundable)
  • Excursions (some are refundable, and some are non-refundable)

Remember, they must be prepaid and non-refundable. You only need to insure the money you would lose if you cancel your trip before departure.

Also, they must be travel arrangements. You cannot include the cost of insurance in Trip Cost.

Here is AIG Travel Guard's definition of Trip Cost:

Trip Cost means the Insured's share of the cost of a Trip. This dollar amount is based on the following criteria, as applicable:

  • If the Insured is not sharing the cost with, or not paying the cost on behalf of, other travelers, the Trip Cost will include the full dollar amount paid by the Insured for the Trip.
  • If the Insured is sharing the cost with other travelers, the Trip Cost will include the portion of the full dollar amount actually paid for the Trip by the Insured (even if this amount differs from the Travel Supplier invoice).
  • If the Insured's Trip is paid for by someone else, the Trip Cost will include the dollar amount designated by the Travel Supplier for the Insured's portion of the Trip.
  • If the Insured is paying for the costs of the Trip for himself or herself, as well as other travelers, the Trip Cost will include the dollar amount designated by the Travel Supplier for the Insured's portion of the Trip. The cost for other travelers will not be included in the Trip Cost for the Insured.
  • For a Trip that is not priced on a per-person basis (such as multiple occupancy hotel rooms and vacation rentals), or for Trips where the Travel Supplier does not provide a per-person cost, the dollar amount paid for the Trip will be assumed to be split equally between all travelers participating in the booking, and the Trip Cost will include the Insured's portion.

Keep in mind, this is just one insurer's definition and will vary depending on which insurer you choose.

But what if you only want to cover the flight or the cruise, and not the entire trip?

Do I Have to Insure My Entire Trip?

The short answer is: no. The long answer is: Yes, if you want certain benefits.

You may cherry-pick from your list of non-refundable, prepaid trip costs to create your travel insurance policy. That gives you the freedom to choose some or all of your trip cost when putting together your plan.

Of course, there's no law saying you have to insure your trip so you could insure nothing at all.

Before you do that, you need to know something!

If you want specific travel insurance benefits, you cannot exclude any travel arrangements in the amount of Trip Cost coverage. Here are those two situations:

  • Cancel for Any Reason: If you want a Cancel for Any Reason policy, you must cover 100% of your Trip Cost (everything prepaid and non-refundable). Plus, you must buy this type of protection within 2-3 weeks of your Initial Trip Deposit.
  • Pre-existing Medical Conditions: The same rule applies here: you must insure 100% of your Trip Cost for this type of protection and buy early.

Remember, whatever amount of cover you decide you need, it's always important to ask lots of questions before signing on the dotted line.

Here at AARDY, we have answers to all your travel insurance questions. You can also find an instant quote and great value on over 40 policies through our website.

Safe travels.

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