Insuring PART of the trip cost?

Yesterday I read an article about trip insurance in a magazine aimed at international travelers. I don't know if I am allowed to identify the publication. Anyway, the columnist who is described as a "longtime travel insurance columnist" said something that surprises me. I quote: "regarding travel insurance in general, you can purchase any amount of coverage that you want up to the maximum cost of the trip".

So, let's say I am taking a $10,000 cruise and am willing to self-insure half of that amount.

Therefore I buy $5000 in insurance and have to cancel for a covered reason. Will the insurance company really pay me the $5000? I had always believed that you had to insure the entire non-refundable amount for the trip to receive any benefits.

Yesterday I read an article about trip insurance in a magazine aimed at international travelers. I don't know if I am allowed to identify the publication. Anyway, the columnist who is described as a "longtime travel insurance columnist" said something that surprises me. I quote: "regarding travel insurance in general, you can purchase any amount of coverage that you want up to the maximum cost of the trip".

 

So, let's say I am taking a $10,000 cruise and am willing to self-insure half of that amount.

Therefore I buy $5000 in insurance and have to cancel for a covered reason. Will the insurance company really pay me the $5000? I had always believed that you had to insure the entire non-refundable amount for the trip to receive any benefits.

Check with one of the travel insurance brokers like TripInsuranceStore, as they'll be familiar with a variety of insurers and policies.

My NON-expert understanding is that for some types of coverage, yes, one must insure ALL *non-refundable* costs.

But I think there are other types of policies (we have never purchased this other type) that allow one to insure part of the costs.

Yesterday I read an article about trip insurance in a magazine aimed at international travelers. I don't know if I am allowed to identify the publication. Anyway, the columnist who is described as a "longtime travel insurance columnist" said something that surprises me. I quote: "regarding travel insurance in general, you can purchase any amount of coverage that you want up to the maximum cost of the trip".

 

So, let's say I am taking a $10,000 cruise and am willing to self-insure half of that amount.

Therefore I buy $5000 in insurance and have to cancel for a covered reason. Will the insurance company really pay me the $5000? I had always believed that you had to insure the entire non-refundable amount for the trip to receive any benefits.

With every plan I'm aware of you can insure less than the full cost of the trip. Obviously, you're self-insuring for the remainder but if your cancellation is due to a covered reason you will be paid for the amount you insure.

However, you may be giving up some benefits if you do this. With some plans you get a trip interruption benefit of 150% of the insured trip cost ONLY if you insure everything. Otherwise, it's 100% of the amount insured. Some plan require that you insure the full trip cost in order to be eligible for their waiver of the pre-existing condition exclusion. The same usually applies if you want the cancel for any reason benefit.

This is from TravelSafe's FAQ and is pretty standard (TravelSafe DOES NOT require that you insure every $$ to be eligible for their pre-ex waiver):

"If you have not insured the full cost of all Travel Arrangements that are subject to cancellation penalties or restrictions:

1. the maximum benefit for Trip Cancellation will be limited to the amount of coverage you purchased and Trip Interruption will be limited to the stated percentage of the amount coverage you purchased for your trip; and

2. for plans which include a Cancel For Any Reason Benefit or have bankruptcy or default protection, there will be no coverage afforded."

You should be able to find something similar in the wording of any plan you're considering.