Taking A Tour? Here’s Everything You Need To Know About Travel Insurance

27.08.2023 - 10:43 / forbes.com / Daniel Durazo

If you're thinking of taking a tour on your next vacation, you're in good company. A recent survey of tour operators by the United States Tour Operators Association expects bookings will rise between 7% and 10% this year.

That's a lot of tours worth an estimated $9.75 billion — and a lot that can go wrong.

Fortunately, travel insurance is keeping up. Earlier this year, for example, Travelex Insurance Services teamed up with Collette Travel Service, a popular tour operator, to start selling travel insurance policies directly to customers.

“We’re ready and excited to serve Collette’s travelers as they explore the world," Travelex CEO Shannon Lofdahl said.

Travelers may find that exciting, too, especially if they get into trouble on their next vacation.

After all, some of the worst travel horror stories involve tours gone awry (I report them on my consumer advocacy site). Almost always, travel insurance could have saved the day. And almost always, the consumer has either no insurance or the wrong kind of insurance, or is relying on flimsy credit card coverage. Collette's travel protection plans provide daily expense stipends, as well as coverage for trip interruption, baggage loss, missed connections and medical expenses, according to the company.

"Travel insurance is as relevant to somebody on a tour as it is to anybody else," explains Jesper Lykke, a senior sales executive at Trawick International.

He says coverage bought directly from a tour operator rather than from a travel insurance company is similar. However, there are some important differences. Specifically, you'll need to pay attention to benefits and coverage. And there's one big catch when it comes to tours that are self-insured. I'll get to that in just a moment.

But before we go there, let's answer a more basic question: Why even bother insuring your tour?

Travel insurance for tours doesn't just cover you for the usual issues like trip disruptions and medical emergencies. Tour operators may also require that you pay some or all of the cost of a tour in advance with a nonrefundable deposit. So if you have to cancel your tour because of an unexpected situation, you'll forfeit some or all of your deposit — unless you have insurance.

"Travel suppliers often take a hard line in regard to refunds," says Daniel Durazo, director of external communications at Allianz Travel Insurance. "Generally, they will not deviate from their refund policy, regardless of the circumstances. That’s why many encourage their customers to purchase travel insurance and often partner with travel insurance providers to offer policies, manage and pay claims, and provide travel assistance should a customer need help while on their tour."

But just because your tour