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Travel insurance and travel protection both sound like good ideas in a world of pandemic uncertainty. But is there a difference between the two? And if so, does it matter to you when you’re planning your next vacation?
Short answer: Yes, there’s a difference between travel insurance and protection. And it does matter.
“Travel protection is not travel insurance, but rather it’s a very limited form of trip cancellation coverage that is self-insured by the travel provider,” says John Cook, president of QuoteWright, a provider of travel insurance quotes.
In addition, travel protection might refer to a fee paid to a tour operator or cruise line (remember those?) to waive a cancellation penalty. It could also refer to another form of protection that, while not insurance, can be an important supplement to insurance.
Breaking It Down
Travel insurance is a regulated product that covers losses that you might face while traveling. These can include car rental damage, flight delays, lost luggage, medical expenses and trip cancellation. A typical policy costs between 5% and 7% of the cost of your trip.
Trip protection is an unregulated product typically offered by a travel company or travel agency. The most common trip protection plans allow you to waive a cancellation fee if you can’t make your trip. Some also allow you to receive a credit for the full value of your trip. The costs can vary, but typically it’s less expensive than travel insurance.
That seems pretty straightforward, right? Wrong.
Many travelers—and even travel professionals—use “travel protection” and “travel insurance” interchangeably.
“They are quite different,” says Lum Kamishi, an editor at Visaguide.World, a site about visas.
One reason: Some companies, notably cruise lines, will bundle protection with a traditional travel insurance product. So you’ll in effect have a hybrid product—part travel insurance, part protection. Usually, this only becomes an issue if you’re booking a cruise and receive an offer to “protect” your cruise with insurance. You have to review the fine print carefully to make sure you’re buying insurance, not just a waiver for cancellation fees.
The other definition of protection: There’s more confusion ahead. Companies offering other forms of travel protection, such as medical evacuations or security services, are sometimes grouped under travel protection. This is a far different type of “protection” than a cancellation waiver.
For example, your travel professional might refer to a medical membership like Medjet or a service like Global Rescue, which provide evacuations and security services, as “protection.” It is, of course—but not in the traditional sense.
Global Rescue CEO Dan Richards says these services can offer benefits that insurance doesn’t. For example, his company offers services that range from field rescue from the point of your illness or injury, to transport to an appropriate hospital, to ongoing in-house case management and 24/7 medical or security advisory services.
“Travel insurance policies are designed to protect your wallet,” he says. In the broader definition of “protection,” he explains, “Travel protection services can protect your health and life—even during a pandemic.”
My Brush with Trip Protection Scammers
I began covering travel insurance and protection because of a product that called itself “trip protection.” Decades ago, when I was just a cub reporter, a company began offering trip protection policies to cruise passengers and people who were buying pricey tours.
But when customers filed a claim, and were denied, they discovered that the protection was basically unregulated insurance. When state regulators began closing in on these insurance scammers, the companies would dissolve and move to a new state. Then the scam would start all over.
As a consumer advocate specializing in travel cases, I dealt with all of the unhappy travelers whose claims were repeatedly denied. Eventually, working closely with victims and law enforcement, we put these travel protection scammers out of business once and for all.
Today, travel protection is clearly labeled as “not insurance,” and regulators are quick to clamp down on any company that claims otherwise. But two decades ago, that wasn’t the case. And travelers paid a high price.
When a Travel Protection Plan Makes Sense
So which should you buy? It depends. Mayuri Kashyap, a travel blogger on ToSomePlaceNew who covers Europe, recently bought the trip protection plan for a cruise tour in Europe. The package cost $5,000 with an optional trip protection plan for $350. Kashyap could cancel at any time before their trip and receive a $5,000 credit.
“The reason we took the protection plan was that we required a Schengen visa to travel to Europe, and it was our first time applying for a visa of such kind,” she explains. “Having a prepaid trip plan—an itinerary and accommodation—was part of the Schengen visa process. And if we were denied the visa, we were happy to know that we can use $5,000 credit for a trip anywhere else in the world.”
Kashyap says travel insurance with trip cancellation would have been overkill. She already purchases separate medical insurance, and experienced travelers like her also rely on their credit cards for coverage of trip interruptions or lost baggage.
When Travel Insurance Makes Sense
If you’re looking for full-fledged coverage for issues like medical transportation, lost luggage and auto rental, trip protection won’t work. You’ll need to either find coverage through your credit card, health insurance or auto insurance—or buy a real travel insurance policy.
“Travel insurance covers medical emergencies such as accidental injuries, unexpected illnesses, repatriation and evacuation,” says Kamishi of Visaguide.World. “Also, travel insurance could be seen as more inclusive than travel protection. It may also include things that are covered by travel protection, but the opposite would not be true.”
Cook of QuoteWright says he advises his customers to avoid travel protection.
“In today’s environment it would be a mistake for a traveler to buy a travel protection plan,” he says. “The plans are not underwritten by an insurance company, so travelers are not covered under statutory requirements and protections. In addition, travel protection plans do not provide protection in the event that the travel supplier has a bankruptcy default.”
Advice on Travel Protection
Cook is correct. In normal times, travel protection might be an option. But these aren’t normal times. With several cruise lines teetering on the brink of bankruptcy, you could easily buy a protection plan, only to have the company go under. And don’t confuse that kind of protection with a medical membership plan, which is a good idea to consider any time—and especially now.
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