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Why You Should Consider Travel Insurance for Your Next Luxury Vacation

Here's how to protect your investment and make sure you recover as much money as possible in case your vacation plans go awry.

Maldives Mike Swigunski/Unsplash

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You may be planning a luxury trip to commemorate a milestone birthday, celebrate a special anniversary or have a family gathering. These trips often include expensive destinations and tours and have unique itineraries. Consider purchasing travel insurance for luxury trips where you stand to lose a lot in non-refundable deposits.

“It’s important to protect that valuable investment with travel insurance, just like we’re accustomed to having an insurance policy for our homes and vehicles,” says Christine Buggy, spokesperson with Travelex Insurance Services.

Buggy says the more pre-paid, non-refundable expenses you have, the more you need travel insurance.

Demand for 2022 trips is up significantly, with new bookings up over 200 percent compared to 2019, (and this does not include re-bookings), reports Guy Young, president of Insight Vacations and Luxury Gold, which provide luxury guided tours worldwide.

“Recently, with more countries in Europe opening to vaccinated travelers, we are seeing very strong demand for our most popular destinations, such as the U.K., Italy, France, Spain and Portugal,” he says. “In addition to these perennial favorites, we have seen very strong demand for destinations such as Egypt and Croatia, who were early in accepting American travelers.”

Some luxury travelers are looking for bucket-list experiences such as African safaris.

“People are buying exclusivity. They want to experience unique places on the continent that will allow them to delve deeper into wildlife conservation, culture or unique elements that lodges provide,” says Sherwin Banda, president of African Travel Inc. “Places such as Botswana, which sets a gold standard for sustainability, offer remote and unique land and water wildlife experiences.”

Whether touring Italy or taking a safari in Africa, travel insurance is crucial coverage for trip cancellation, trip delay and trip interruption, medical expenses, emergency medical evacuation and baggage loss.

Trip Cancellation Insurance for Luxury Vacations

Of course you don’t anticipate having to cancel your trip, but unexpected problems do happen and that’s where travel insurance provides a safety net. If you have to cancel your trip for a reason covered by the policy—such as illness or injury of you, a travel companion or a family member—you can be reimbursed for 100 percent for your pre-paid and nonrefundable trip costs.

“These expenses could include airfare, accommodations, tour guides and transportation, which can really add up with high-end travel,” says Buggy. Other reasons for cancellation could include severe weather, a terrorist attack, losing your job or another type of family emergency.

There are many reasons covered for trip cancellation, but they are not all-encompassing.  “Berkshire Hathaway Travel Protection’s LuxuryCare plan includes additional reasons for covered cancellation such as a child’s school calendar extending into summer, pregnancy, adoption, or even being involved in a traffic accident on the way to the airport,” says Carol Mueller, spokesperson with Berkshire Hathaway Travel Protection.

Although many travel insurance plans offer broad reasons for cancellation under the standard trip cancellation coverage, for more flexibility there’s “cancel for any reason” (CFAR) coverage. This optional upgrade costs about 40 percent more than a typical travel insurance policy and will permit you to cancel for any reason, up to two days before your scheduled departure.

CFAR coverage generally allows you to recoup 50 percent or 75 percent of your trip costs, depending on the plan. For an expensive luxury trip, this upgrade may make sense.

Related: Best “Cancel For Any Reason” Travel Insurance Plans Of 2021

Maldives

A beachside sunset view on a Maldives island.  Luca Dal Molin/Unsplash

Delays and Interruptions in Luxury Trips

If you’re traveling internationally, it’s likely you have a connecting flight to reach your final destination.

If you miss your connection in London on route to India, for example, because of airline mechanical issues, you could recoup related expenses you incur. If you need to spend the night at a hotel in London because the next flight to India is the next day, you can file a claim for the hotel, meals and transportation.

It’s important to read your policy because there is usually a required time delay for coverage—typically three to 12 hours of delay.

Trip interruption benefits kick in if you need to leave your trip early for an unexpected reason. “Getting sick, a death in the family, a hurricane at your resort—these are just a few reasons you may end your trip unexpectedly and need trip interruption coverage,” says Buggy at Travelex.

For example, if you prepaid for a safari excursion, travel insurance can reimburse you under trip interruption coverage if you have to cut your travels short due to a reason covered by the policy.

Utilizing Travel Assistance Services

Travel insurance policies commonly include a 24/7 travel assistance hotline, which is very valuable.

“You should make sure your policy includes 24/7 travel assistance services,” says Buggy. This is very important when exploring a country you’re not familiar with, which may have language barriers or cultural differences.

“It’s certainly not fun having to change your plans mid-trip but travel assistance services can help navigate travelers through these types of scenarios with emergency travel arrangements, message services to family, and more,” says Buggy.

Getting Coverage for Medical Expenses and Evacuation

Luxury trips often include travel beyond the U.S. so it’s important to purchase a robust travel insurance plan for the best protection.

“Luxury travel is notorious for exotic, far-flung, overseas destinations—sometimes even off the grid,” says Buggy. “Coverage for medical expenses and evacuations is imperative with international travel.”

This is especially true abroad where your U.S.-based health plan may have limited or no coverage. Senior travelers should be aware that Medicare does not cover health care outside the U.S.

And even vaccinated travelers may want to look at only travel insurance plans that cover Covid-related medical expenses.

Whether close to home or abroad, if you have a medical emergency and need to be transported to a facility for care, travel insurance can help you find a doctor and provide payment.

“With medical evacuations costing tens to $100,000, it’s easy to see how devastating these unplanned expenses could be to one’s financial future,” says Buggy.

A travel insurance plan will pay to get you to the nearest adequate medical facility, which may not be to your liking. Travelers on luxury trips may want to consider supplementing their insurance with a medical transport membership such as Medjet.

Losing Baggage and Belongings

If you’re on a luxury vacation it’s highly probable you are traveling with expensive items such as clothes and jewelry.

Baggage and personal effects coverage provides reimbursement for personal items if bags are lost, stolen or damaged. But watch out for both per-item limits and aggregate limits. It’s a good idea to read the fine print and leave anything unnecessary at home, says Buggy at Travelex.

Baggage delay benefits are helpful if you arrive at your destination but your bags don’t.

If bags are delayed for a certain period of time (such as six to 12 hours or more, as defined in the policy) you can get reimbursed for the purchase of necessary personal items like toiletries, swimwear and a change of clothing. This benefit is meant to tide you over until you are reunited with your luggage. Be sure to save receipts to file a claim when you get home.


Erica Lamberg is a personal finance and travel writer based in suburban Philadelphia. She is a regular contributor to USA Today and her writing credits include NBC News, U.S. News & World Report, Business Insider, Oprah Magazine and Creditcards.com. 

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