Guest Post by Dawn Royski of ShareTraveler.com
The point of a travel insurance policy to protect yourself in case you have to cancel a trip. These policies reimburse you for airline tickets, prepaid lodging, and other non-refundable purchases (depending on the specific coverage), and many also provide emergency medical evacuation.
The tricky question is whether the risk is high enough that it’s worth spending the money to buy travel insurance for a home exchange.
In this post I will explain the various insurance options and give my take on who should use this insurance.
The value of general travel insurance
I have never purchased general travel insurance, and if I ever do have to cancel a trip I will probably break even with all the insurance money I’ve saved. But I also don’t spend much money up front on my travels, so there isn’t much for insurance companies to reimburse.
For expensive pre-paid trips, and especially for those prone to sickness, I think travel insurance can be a good option. However, the lower-cost plans are very restrictive about what they cover, and the risk vs. cost on insurance plans doesn’t necessarily make sense for everyone.
You’ll need to evaluate your personal situation and decide whether travel insurance is useful for your trip. Read the policy closely, and think carefully about whether you trust the company to pay out in case of a claim. Research your own health plan to find out what they cover. Most offer some sort of emergency care coverage anywhere in the world, but they generally don’t cover medical evacuation. And check to see whether you already have sufficient insurance from the credit card you use to pay for your travel purchases.
To decide, consider the following:
- How expensive is your trip?
- How flexible are your plans? Is it possible to change them with little or no cost if something happens (a big hurricane at your destination, an unexpected illness, etc)?
- How likely are these events to happen? Are you traveling during hurricane season? Are you prone to illness? Are there other things in your life right now likely to force you to cancel your plans?
- Can you afford to lose the money you have spent on the trip if you have to cancel?
- What does your existing medical insurance cover?
Travel insurance for a home exchange
If you own your home you already have homeowners’ insurance. This will cover major issues like someone being injured in your home, but it probably won’t allow for claims of theft from invited guests in areas of the home that were not declared off limits. Everyone’s policy is different so you should check with your insurance company about what is covered.
Similarly, if you swap cars the authorized driver is covered by your policy. You can call your auto insurance company to confirm, but if let your friends drive your car, this should be no different.
Assuming that your homeowner’s insurance remains in effect while people are staying in your home, I think that cancellation is the biggest risk for home exchange. Sometimes things happen that force people to change their plans, and with a house swap this impacts both parties. In this case, travel insurance may reimburse you for airline tickets and other prepaid costs. In some cases, the insurance may also cover alternative lodging costs.
But be aware that most travel insurance policies only cover home exchange cancellations by your swap partner if you have a “cancel for any reason” policy. Here’s a good overview of cancel-for-any-reason insurance.
Insurance Offered by Home Exchange Sites
A number of home exchange sites now offer optional insurance to their members, usually on a per-exchange basis. Buying directly through your home exchange service provides the advantage of covering both swap partners and addressing the specific needs of home exchange travelers.
The type of insurance offered by home exchange sites varies. For example:
- Some exchange sites collect a security deposit that the site holds for the swappers until the trip is over. If no issues are reported, the money is returned, minus a fee which ranges from 3.5% to 10% .
- Other sites offer insurance as a part of their membership. The point of this kind of insurance is to cover damages not covered by your regular homeowners’ insurance. If insurance is important to you, this is a decent value for the membership fee.
- A few sites have created optional funds for members to help reimburse them for the costs of a cancellation. Only people who pay into the fund can draw on it, and the amount you could receive depends on the size of the fund and the number and amount of claims.Some sites offer third party insurance for a fee.
Consider Your Options
Confused about your options? Here’s my summary of what various types of insurance will generally cover. There are exceptions.
The Bottom Line
To decide whether to buy travel insurance for your home exchange, think about what you want to insure against, consider your risks, and investigate all your insurance options.
- If you’ve spent a lot of money on airplane tickets, pre-paid tours, and other trip expenses, insurance against cancellation may be a good idea.
- If you’re concerned about medical problems while you’re traveling, you might want to consider travel insurance that covers medical expenses and emergency evacuation.
- If you are thinking about insuring against theft or damage to your property while exchange partners are in your home, keep in mind that this is a very unlikely outcome of a home exchange.
In any case, you want to be sure that your homeowner’s liability and fire insurance remains in effect while you’re away. And enjoy your trip!
A version of this post originally appeared on ShareTraveler.com. Check out Dawn’s site for more information on home exchanges, peer-to-peer activities, ridesharing, labor for lodging swaps, and other travel resources.
Do you buy travel insurance when you take a trip? Have you ever used it? Let us know in the Comments or on our Facebook page.