When to Say No to Car or Travel Insurance

mj-618_348_the-lowdown-on-travel-and-rental-car-insurance
 Bloomberg / Getty Images

Whether to get insurance is a painfully dull subject — until you’re biking around the Big Island of Hawaii, skid on a road and slam into a steel bridge frame, breaking your right fibula, tibia, and three ribs. I was riding about 100 yards behind the guy on an organized bike tour around the circumference of the island, when I witnessed just this. The biker escaped death by about two feet to the right where the side rail ended.

We were biking on the somewhat remote northeast corner of the island, so he was airlifted to Hilo Medical Center, where he spent the remainder of his vacation. The outfitter later told me that he paid the princely sum of $45,000 because he didn’t opt for travel insurance. After all, who purchases travel insurance?

RELATED: How to Rent a Sports Car

I’ve been privy to all sorts of anecdotes from my wife who runs a boutique travel agency in suburban Boston. What I’ve learned from her many anecdotes is that knowing when to get travel insurance requires common sense. If you’re spending three nights at the Day’s Inn in Fort Lauderdale, don’t sweat it. If you just put down a significant chunk of your savings to go on safari in the Masai Mara, you’re a fool not to get travel insurance. Select comprehensive travel coverage that includes trip cancellation and interruption insurance, medical insurance, baggage insurance, and trip delay. Go with a reputable company like Travel Guard or Travelex and the cost should range from 5 to 12 percent of your entire trip.

Note to adventure travelers: If you’re bringing high-end gear or video equipment, you probably want to purchase supplemental excess valuation insurance directly from the airline. There’s a limit on how much airlines will insure if they lose your bag. Also, there are exclusions to some travel insurance policies when participating in an adventure sport like rock climbing, scuba diving, or whitewater rafting, so be certain your particular excursion is indeed covered.

And for car insurance, it’s as simple as this: There’s rarely a need to purchase rental car insurance in America. Personal auto insurance policies cover rental cars. Plus, the credit card you use acts as a secondary insurer, providing some form of rental car insurance. So if you don’t own a car and are renting a Ferrari to cruise Fresno, a city known for its high number of vehicle thefts, by all means buy the car insurance. Everyone else is simply throwing away cash. When traveling internationally, check with your auto insurer and credit card carrier to see what they will cover for you overseas. In some countries like Costa Rica, it’s mandatory that you buy car rental insurance.