Trip Costs: Why Getting Them Right is So Important for Travel Insurance

You've booked your flights, scored a sweet deal on a hotel, and your itinerary is packed with one-of-a-kind adventures. But before you get carried away with wanderlust, there's one crucial detail that deserves your attention: calculating your trip costs.

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Accurately calculating your trip costs isn't just about being a budget guru (though that's a bonus!); it's about making sure your travel insurance can protect you if things go sideways (and that you’re able to obtain protection in the first place) so that you don’t wind up paying out of pocket for expenses incurred from unforeseen, unexpected circumstances.

To-Do List Item #1: Protect Your Trip!

If you have ever purchased (or considered purchasing) travel protection, you’ve probably heard the term “time-sensitive benefits” but may not know what it means.

Time-sensitive benefits refer to coverage benefits such as Cancel for Any Reason that is only available by your travel protection plan if you purchase it within a specific time frame of the date you made your initial trip payment, such as a flight or hotel booking.

While the time frame differs from one company to another, and sometimes even between different plans, typically you need to insure your trip as soon as possible after booking to be sure you fall within the time-sensitive window. Getting into the habit of requesting a quote right away is one way to avoid the possibility of leaving it too long and being denied some travel protection coverage.

Why Trip Cost Accuracy is Your Travel Protection BFF

Here's the lowdown: travel protection, especially the kind that covers trip cancellations or interruptions, bases its reimbursements on your insured non-refundable trip costs. Think of it like this: your declared trip cost is the foundation of your travel protection. If that foundation is shaky (i.e., underestimated), your coverage structure can be weakened. If something goes wrong and you need to make a claim, you might discover you're not as covered as you thought, leaving you with a hefty bill for non-refundable expenses. That's probably not the souvenir you wanted to bring home!

The Domino Effect of Inaccurate Trip Costs: A Real-World Example

Let's walk through a scenario.

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Imagine you've planned an unforgettable two-week trip to Japan, a land of ancient temples, bustling cities, and breathtaking natural beauty. Your total trip cost, including non-refundable flights, accommodations, pre-booked tours, and a Japan Rail Pass, comes to $8,000. However, when purchasing travel protection, you underestimate your expenses and declare a trip cost of only $5,000. No biggie, right? Wrong! Just days before your departure, an emergency forces you to cancel your trip.

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Based on the amount you declared, your numbers might work out like this.

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Let’s say your travel protection plan covers 80% of your insured trip cost. That means you'll receive a maximum of $4,000 (80% of $5,000), which leaves you with a $4,000 loss, despite having a protection plan!

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Had you accurately declared your $8,000 trip cost, you would have been eligible for up to $6,400 in reimbursement, softening the financial blow.

Building a Solid Trip Cost Calculation

To ensure accuracy and maximize your travel protection, focus only on the pre-paid, non-refundable portion of your trip expenses. This may include non-refundable:

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• Transportation: Airfare (including baggage fees if they are non-refundable), train tickets, cruises, or other pre-paid, non-refundable transportation costs.
• Accommodation: Hotel deposits, pre-paid vacation rentals, or any other non-refundable lodging expenses.
• Activities and Excursions: Pre-booked, non-refundable tours, entrance fees, or other activity expenses that cannot be recouped.

Remember: Do not include refundable expenses, estimated food and drink costs, or other incidentals in this calculation. If you haven’t paid for it yet, you can’t insure it!

Choosing Your Travel Protection Armor: Focus on Non-Refundable Costs

Once you've accurately calculated your trip cost, you can confidently select the travel protection plan (and optional add-ons) that provides the right level of protection for your needs and budget. Consider these key factors when obtaining a quote:

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• Coverage Maximums: Ensure the plan's benefit maximums for trip cancellation/interruption, medical expenses, emergency medical evacuation, and other benefits align with your trip cost and potential risks.
• Covered Reasons: Carefully review the plan's list of covered reasons for trip cancellation or interruption to help ensure it addresses your specific concerns and potential travel disruptions.
• Exclusions: Pay close attention to the plan's exclusions, which are specific circumstances or events not covered by the insurance. Understanding these exclusions is crucial for avoiding surprises later on.

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To be certain that our travelers can always find the right level of travel coverage for themselves, Travel Insured offers three Worldwide Trip Protector Plans with optional add-on bundles for extras like rental car damage and theft coverage, cancel or interrupt for any reason, and even a pet bundle to cover your four-legged family member.

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With travelers navigating the globe on adventures of all kinds, we’re here to make sure you have the right (read: accurate) coverage to protect your investment and can travel confidently with the knowledge that you’re prepared even (or especially) for the unexpected.

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Our online quotes are fast, easy and super convenient. Just plug in your dates and a few other key pieces of information, and voila! You’re on your way.