No one likes paying for insurance, be it car, home, renter’s, health, life, or even phone insurance. We see money going out to pay the monthly premiums, and (if we’re lucky) we never actually get anything in return. But things don’t always go as planned. And when accidents do happen, it’s vital to have an insurance plan in place so you don’t break the bank.
Travel insurance is no different. However, it’s often underutilized because most people aren’t familiar with it.
- What is travel insurance?
- What does it cover?
- Why do you need it?
- When should you get it?
- How much coverage do you need?
- Where do you purchase it?
- Who can get travel insurance?
There are many questions surrounding travel insurance, and in this post we’ll uncover as much as we can about this enigmatic topic.
What Is Travel Insurance?
Travel insurance is an insurance policy constructed for a specific trip, and is intended to cover medical expenses, cancellations, lost luggage, accidents, or other losses incurred while traveling. It can be thought of as peace of mind for you and your family while traveling either internationally or domestically.
What Does (and Doesn’t) Travel Insurance Cover?
There are many different types of travel insurance, and the list of what can be covered is quite long. Your policy will really depend on what you want covered. That being said, some of the most common items covered by travel insurance are:
- Emergency medical or dental coverage.
- Trip cancellation, interruption, or delay.
- Emergency evacuation.
- Lost, stolen, damaged, or delayed baggage.
- Equipment coverage if lost or stolen (camera, phone, etc.).
- Injuries from activities.
- Injuries from extreme sports (hot air ballooning, cave diving, skydiving, bungee jumping, etc.).
In our opinion, the most important coverage you can buy as part of your travel insurance is health coverage — especially if traveling internationally!
Did you know that when traveling internationally most countries will not cover you financially in the case of a medical emergency? So if you fall down and break a bone, expect to pay out of pocket. And don’t count on the health insurance you pay for at home as it will most likely not work abroad.
Think of travel insurance as a stopgap that will cover you and your family temporarily in case of emergency.
Unfortunately, travel insurance doesn’t cover preexisting conditions. It’s for emergencies only and is not a one-to-one replacement for your normal health insurance. If you want to go to the doctor to get a check up while over seas, or get your regular prescription filled, don’t count on travel insurance covering the expenses.
There are a variety of options available when it comes to purchasing medical coverage as part of your travel insurance. Not all policies are created equal. Find a deductible and coverage that works for you, and ensure that they provide 24-hour assistance! Knowing that you are covered and have someone to call if you do get sick or injured will give you peace of mind.
Trip Cancellation, Interruption, or Delay
Trip cancellation, interruption, and delay coverage is also important to have in your policy. What happens if someone in your family gets sick — either back home or traveling with you — and you have to cut your trip short?
We met a couple while traveling who had previously attempted a round-the-world trip. During that trip, one of their parents passed away. They had to cancel the rest of their trip and incurred unforeseen costs to travel back home and also lost money on deposits that were previously made — all of which would have been covered by travel insurance.
How about if an airline, tour company, or hotel goes out of business and your plans are altered? What if there is a countrywide emergency or strike and you can’t leave? Or how about if your flight is delayed and you miss a night in a hotel you already paid for? You will want coverage in these scenarios so that you won’t lose all the money you spent on your trip, or pay extra trying to get where you’re going.
Laura experienced financial loss in a similar situation when she was volunteering in France. She decided to take a trip to Portugal and the airline canceled her flight a couple hours before takeoff. They weren’t offering another flight to Portugal for 4 days! The trip had to be canceled because she couldn’t afford to spend 600 Euros for a flight on a different airline. She also had to cancel all of the prepaid reservations in Portugal. She didn’t have trip insurance and lost a lot of money, and didn’t get to go to Portugal to boot! A major regret in hindsight.
Baggage and Equipment
In the event that your baggage is lost, stolen, or damaged, the airlines will only cover so much (and that’s if they admit it’s their fault). You can get additional coverage for your bags through your travel insurance plan and feel comfortable knowing that if anything happens to them, you’ll be covered. Also consider that if your baggage is missing when you arrive at your destination, you may have to buy new clothing, toiletries, etc. to hold you over. This can be covered by travel insurance as well.
As a real-life example of this, a friend that had $7,000 worth of items in their luggage (!!!) and the airline lost her bag and would only pay $3,000 in reimbursements. That is a significant loss that could have been avoided with the purchase of travel insurance.
As far as equipment goes, it’s not a bad idea to insure that new, expensive camera you bought for your trip. If it drops and breaks, or is stolen, you may lose your photos but at least you can be reimbursed for the camera. This is also something to consider with regards to laptops, cell phones, etc. If you’re worried about your gear, get coverage built in to your travel insurance policy!
If you know that you want to go hot air ballooning, SCUBA diving, rock climbing, or any other high-risk activity on your trip, you may want to add that into your policy as well. Most policies will only cover you for everyday injuries, so make sure that you add on coverage if you are going to be participating in any activities that may put you at risk.
Why Do I Need Travel Insurance?
Protection. It’s there to protect you in the event of a medical emergency. It’s there to protect you in the event that an interruption occurs during your trip. It protects you from losing money or having to pay out of pocket. It’s there to alleviate your worries, allowing you to enjoy your trip.
When Should You Get Travel Insurance?
We personally recommend getting travel insurance anytime you travel outside of the country in which you live. Even if you live in the United States and are going over to Canada or Mexico, you don’t know if you’ll get sick or injured and need a doctor. While travel insurance may cost a little extra up front, it will greatly reduce the financial risk of your investment in traveling.
If you are planning a trip with a tour company, they may have a travel insurance company they work with so it’s worth asking to see if they can get you a group deal.
How Much Coverage Do You Need?
This is entirely up to you. Most insurance companies will ask how much your trip is costing you, how long you’re going, and where you’re going. The company will usually give you a base of what you should need. You can then add on things like equipment and extreme sport coverage, etc.
As stated before, look at the deductibles and what the company will pay. For medical coverage you will want a high limit. You don’t want to buy a cheap policy with a $15,000 limit and then get injured and find out that your policy won’t come close to covering your bills. Consider getting a policy with a minimum of $100,000 coverage limit on accidents or sickness.
Some credit cards also cover medical expenses incurred while traveling, so check with your credit card company. Most offer little (if any) coverage, but it’s worth checking.
Where Do You Purchase Travel Insurance?
We have always used World Nomads and find their interface to be very user friendly. They also provide excellent customer service — a benefit that shouldn’t be taken for granted!
There are also companies online that you can use to compare and buy coverage. A good comparison site is Squaremouth. Just remember, when it comes to buying travel insurance you get what you pay for. The cheapest policy offered is not always the best choice. Not all insurance policies are created equal, so pay attention to what is and is not covered!
Who Can Get Travel Insurance?
In theory, travel insurance is available to everyone. However, there may be travel insurance companies who reject applicants for one reason or another based on a risk assessment. For example, people that are older than 60 will have a harder time obtaining travel insurance. (Insure My Trip is a great site for older travelers to try, by the way.)
Travel insurance will never be an expense you are eager to pay for, but you will always be grateful to have it if and when something goes wrong while traveling. Ultimately, it’s up to you to determine how much risk you’re willing to assume during your trip. But just know that the peace of mind that comes with having travel insurance can not be overstated.
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