When purchasing travel protection, knowing exactly what to include in your trip cost calculation is crucial for ensuring adequate coverage. The key is to focus on prepaid and nonrefundable expenses that you would lose if your trip were cancelled or interrupted.
Trip costs fall into several categories. Prepaid costs are expenses you’ve already paid before your trip, such as deposits and fees. It’s important to distinguish between non-refundable costs, which you can't recover if you cancel, and refundable or changeable expenses, which shouldn't be included in your trip cost since you can get your money back or receive credit.
Timing is critical for optimal coverage. For pre-existing condition benefits and other time-sensitive coverage, you should insure your trip costs within a specified timeframe from your initial trip payment, typically within 21 days.
When insuring multiple travelers, you have two options. You can either insure each person individually for their specific amount (per-person cost) or divide a package total among all travelers. For example, a $15,000 package for four passengers would be divided into $3,750 per person. Accurate cost allocation is essential to avoid being underinsured when filing a claim.
Eligible expenses for trip cost calculations include:
- Airline tickets
- Baggage fees
- Cruise and excursion bookings
- Hotel accommodations
However, certain expenses should not be included:
- Passports
- Airline miles or reward points
- Meals
- Tours purchased at your destination
Regarding miles and points, these should be treated as $0 in trip cost calculations since they weren’t paid for out-of-pocket. However, some companies may allow you to insure the redeposit fees for miles/points if your trip is cancelled for a covered reason.
Remember to only include non-refundable, prepaid costs to ensure you're properly protected without overinsuring your trip.
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