How to save on airline travel insurance
Travelers should look to travel insurance as a last resort in an emergency, a new report says.
But it’s not a panacea.
“It’s a good idea to be sure you’re able to use the insurance if the circumstances become dire,” says John Schulman, a travel industry consultant.
“And it’s best to do it quickly.”
If you’re planning on a trip to the Caribbean or Europe, look for a company that offers travel insurance, he says.
And if you’re a student or college student, consider whether the policies cover tuition, as a way to protect your credit.
The U.S. Consumer Financial Protection Bureau says that the average annual premium for a policy is $1,066.
In 2016, that cost dropped to $934.
But insurance companies vary.
“Insurance companies that cover student loans, health insurance, and medical expenses, for example, often charge higher premiums than their more traditional counterparts,” the CFPB said.
“There are some policies that are not offered on airline tickets, for instance, or can be difficult to get if you have health insurance.
If you’re an airline traveler and you’re looking for the cheapest, you’ll want to consider a policy that offers airline insurance.”
So how do you find the cheapest insurance company?
Schulman recommends getting an idea of how much you’re likely to need.
He says to calculate the annual cost of the policy, subtract the cost of any travel expenses, and subtract the deductible, which usually ranges from $1.00 to $3.00.
This figure should be rounded up or down to the nearest dollar.
Then, subtract any deductible from the total and divide that number by your annual income, such as $20,000.
The result should be your annual insurance premium, Schulmann says.
“The lowest policy I’ve seen was a $1 million policy for $5,000, but the cheapest one I could find was $1 per $1,” he says, adding that if you plan to take the cheapest policy, it should be for three years.
“That will save you a ton of money over time, especially if you need the extra coverage to make the trip, and it’s good if you can save a ton for a trip if you do need it,” he adds.
Schulmann also suggests getting a discount for buying the cheapest rate.
“It’s the lowest premium I could get from a policy for the lowest cost,” he notes.
If there’s a discount in store, “I would recommend shopping around for it.”
Travelers looking to save money will be tempted by some of the discounts offered by companies like Travelers Insurance, Schue says.
He recommends the lowest rates available from the company.
But Schulmans tips against buying a policy in advance.
“You have to pay for it in advance and that means you’ll be responsible for it when you go on the trip,” he warns.
If you are buying the policy online, the website will ask you to provide your email address and password to unlock your account.
The website will also ask for a credit card number and a bank account number.
“When you’re buying the insurance, the only thing you’re doing is confirming that you have the required credit card and bank account,” Schulmen says.
“So, if you want to use that for anything other than shopping, you’re going to be in a bad spot.”
When you purchase the policy and have your insurance approved, you can choose to either have it automatically pay out or to pay it out monthly.
If the auto-pay option is selected, it will automatically pay you the monthly premium,” he added.
If not, the auto pay option will only pay you what you pay out each month.