Does Trip Insurance Cover Award Travel?

Most travelers will tell you that trip insurance is a must-have whenever you’ve got an expensive or extensive vacation planned. There are a host of circumstances—mostly unexpected—that can crop up and force you to cancel a long-planned vacation or even a last-minute getaway.

You, a travel companion or a family member you care for could get sick. Your travel partner might bail out on you, or you could lose your job, making you rethink whether you really want to spend all that cash on a vacation. There could even be a death in the family.  But is travel insurance worth it when you’ve paid for your flights and hotels with miles and points?

Travel insurance can cover a wide range of things, including extra expenses due to trip interruption or cancellation; a delayed flight or missed connection; baggage delay or loss of baggage; certain medical expenses; financial default by a travel provider; the loss of a job; and even loss due to a war or an act of terrorism.

What can travel insurance do if you bought your plane tickets with miles and booked your hotel on points? Not a lot. Insurers will not fight to get you a refund of miles if your trip goes wrong.

However, insurers will reimburse you for the change and/or redeposit fee if you must adjust or cancel a trip booked with award tickets. In addition, you’ll still benefit from other elements of the insurance, such as reimbursement for costs related to lost baggage and medical expenses.

Does It Make Sense to Buy Trip Insurance?

Before you can determine if travel insurance is worthwhile in your case, let’s first discuss existing coverage. Does your health insurance policy provide any medical coverage when you are outside of the United States? The majority of policies these days don’t.

If that’s the case with your policy, you need to decide if you will pay out of pocket for any unexpected health-related costs incurred while you’re traveling, or whether you should look for a travel insurance policy to cover that gap.

Your decision will probably depend on your age, your health and where you’re traveling. Rolling the dice and skipping any coverage when you’re in London or another big city where you can access excellent care quickly may be OK. But do you want to be on your own in, say, Sierra Leone?

In some scenarios, it may be worth getting a policy. Major insurers offering policies include Allianz Global Assistance, CSA Travel Protection, HTH Travel Insurance, Travelex and AIG Travel Guard.

If you only want to cover a catastrophic event, look at a per-trip or annual membership in a program such as MedjetAssist. If you are hospitalized over 150 miles from home, they will transport you to the hospital of your choice. That peace of mind can be well worth the few hundred dollars you’ll pay for an annual family policy.Unfortunately, if you’re looking for a magic travel insurance policy that will cover any loss of miles spent on award flights that go awry, you’ll likely come up empty.