This article will guide you on Travel insurance and why it is necessary for one to acquire travel insurance.
First and most importantly when considering an insurance plan, it’s good to know what it does and doesn’t cover.
With Travel insurance your financial risk of travelling can be minimized: theft, missed flights, lost baggage, cancelled tours, accidents, terrorism, travel-company bankruptcies, illness, emergency evacuation and getting your body home in the case of death etc. Each traveller’s potential loss differs, depending on how much of your trip is prepaid, the refund ability of the air ticket you purchased, your state of health, the value of your luggage, where you’re travelling to, the financial health of your tour company and airline, and what coverage you already have through your medical insurance, homeowners or renters insurance, and credit card.
Some travellers buy the idea of having travel insurance while some have a different view on it.
What are the chances you’ll need it?
Answers you need to think deeply about are:
- How willing are you to take risks?
- How much is peace of mind worth to you?
Take these considerations into account, understand your options, and make an informed decision for your trip.
What are the Insurance Basics?
5 main courses on insurance menu:
- Trip cancellation and interruption
- Flight insurance
Supplemental policies can be added to cover specific concerns, such as identity theft or political evacuation. The various types are generally sold in some combination rather than buying only baggage, medical, or cancellation insurance, you’ll usually purchase a package that includes most or all of them. “Comprehensive insurance” covers all of the above curses of insurance plus expenses incurred if your trip is delayed, if you miss your flight, or if your tour company changes your itinerary.
Fortunately one of the better changes in recent years is that many companies, such as Karisas Travel, Travelex and Travel Guard, now offer comprehensive packages that serve as your primary coverage; we’ll take care of your expenses regardless of what other insurance you might have for instance, if you have health insurance through your job. That means they pay first and don’t ask questions about your other insurance. This can be a real plus if you want to avoid out-of-pocket expenses.
Getting Insurance prices do differ, with most packages costing between 5 and 12 percent of the total trip. Age is one of the biggest factors affecting the price: Rates go up dramatically for every decade over 50, while coverage is generally inexpensive or even free for children 17 and under.
What I Need To Know About Travel Insurance Policies
- Travel insurance policies available vary by state, and not all insurance companies are licensed in every state. If you have to make a claim and encounter problems with a company that isn’t licensed in your state, you don’t have a case.
- Be aware that some travel insurance, especially trip-cancellation coverage, is reimbursement-only: You’ll pay out-of-pocket for your expenses, and then submit the paperwork to your insurer to recoup your money. With medical coverage, you may be able to arrange to have expensive hospital or doctor bills paid directly. Either way, if you have a problem, it’s wise to contact your insurance company immediately to ask them how to proceed.
- Many major insurance companies are accessible via mobile phone 24 hours a day.
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Types of Coverage
For each type of insurance that follows, I’ve outlined some of the key legalese. But be warned these are only guidelines. Policies can differ, even within the same company. Certain companies and policies have different levels of coverage based on whether you purchase the car rental, hotel, or flight directly on your own or through a travel agent. Ask a lot of questions, and always read the fine print to see what’s covered for example, how they define “travel partner” or “family member” your great-aunt might not qualify.
Trip-Cancellation or Interruption Insurance
For me, this is the most usable and worthwhile kind of insurance. It’s expensive to cancel or interrupt any prepaid travel, and for a fraction of the trip cost, you can alleviate the risk of losing money if something unforeseen gets in the way.
The rugged, healthy, unattached, and gung-ho traveler will probably forgo trip-cancellation or interruption coverage. I have skipped it many times, and my number has yet to come up. If it turns out that I need to cancel or interrupt, I’ll just have to take my financial lumps.
I played the odds and lost. But if you’re paying a lot of up-front money for an organized tour or house rental both of which are expensive to cancel, if you or your travel partner have questionable health, or if you have a loved one at home in poor health, it’s probably a good idea to get this coverage.
Before purchasing trip-cancellation or interruption coverage, check with your credit-card issuer; yours may offer limited coverage for flights or tours purchased with the card.
A standard trip-cancellation or interruption insurance policy covers the nonrefundable financial penalties or losses you incur when you cancel a prepaid tour or flight for an acceptable reason, such as:
You, your travel partner, or a family member cannot travel because of sickness, death, layoff, or a list of other acceptable reasons;
Your tour company or airline goes out of business or can’t perform as promised;
A family member at home gets sick check the fine print to see how a family member’s pre-existing condition might affect coverage;
You miss a flight or need an emergency flight for a reason outside your control such as a car accident, inclement weather, or a strike.
So, if you or your travel partner accidentally breaks a leg a few days before your trip, you can both bail out if you both have this insurance without losing all the money you paid for the trip. Or, if you’re on a tour and have an accident on your first day, you’ll be reimbursed for the portion of the tour you weren’t able to use.
This type of insurance can be used whether you’re on an organized tour or cruise, or traveling independently in which case, only the prepaid expenses such as your flight and any nonrefundable hotel reservations are covered. Please be aware that the difference: Trip cancellation is when you don’t go on your trip at all. Trip interruption is when you begin a journey but have to cut it short; in this case, you’ll be reimbursed only for the portion of the trip that you didn’t complete. If you’re taking a tour, it may already come with some cancellation insurance — ask.
Some insurers won’t cover certain airlines or tour operators. Many are obvious such as companies under bankruptcy protection but others can be surprising including major airlines. Make sure your carrier is covered.
It’s smart to buy your insurance policy within a week of the date you make the first payment on your trip. Policies purchased later than a designated cut-off date-generally 7 to 21 days, as determined by the insurance company — are less likely to cover tour company or air carrier bankruptcies, pre-existing medical conditions (yours or those of family members at home), or terrorist incidents. Mental-health concerns are generally not covered.
You can avoid the question of what is and what isn’t covered by buying a costly “any reason” policy. These offer at least partial reimbursement generally 75 percent no matter why you cancel the trip. But the premiums are so hefty that these policies appeal mostly to deep-pocketed ever ready clients.
Before buying a special medical insurance policy for your trip, check with your medical insurer. You might already be covered by your existing health plan. While many US insurers cover you overseas, Medicare does not. Also, be sure you’re aware of any policy exclusions such as preauthorization requirements.
Even if your health plan does cover you internationally, you may want to consider buying a special medical travel policy. Much of the additional coverage available is supplemental or “secondary”, so it covers whatever expenses your health plan doesn’t, such as deductibles. But you can also purchase primary coverage, which will take care of your costs up to a certain amount. In emergency situations involving costly procedures or overnight stays, the hospital will typically work directly with your travel-insurance carrier on billing but not with your regular health insurance company; you’ll likely have to pay up front to the hospital or clinic, and then get reimbursed by your stateside insurer later. For routine-care, a visit to a doctor will likely be an out-of-pocket expense you’ll bring home documentation to be reimbursed. Whatever the circumstances, it’s smart to contact your insurer from the road to let them know that you’ve sought medical help.
Many pre-existing conditions are covered by medical and trip-cancellation coverage, depending on when you buy the coverage and how recently you’ve been treated for the condition. If you travel frequently to Europe, multitrip annual policies can save you money. Check with your agent or insurer before you commit.
The US State Department periodically issues warnings about travelling to at any risk countries. But if you’re visiting one of these countries, your cancellation and medical insurance will likely not be honored, except you purchase supplemental coverage.
For travelers over 70 years old, buying travel medical insurance can be expensive. Compare the cost of a stand-alone travel medical plan with comprehensive insurance, which comes with good medical and evacuation coverage. A travel-insurance company can help you sort out the options. Certain Medigap plans cover some emergency care outside the US; call the issuer of your supplemental policy for the details.
Evacuation insurance covers the cost of getting you to a place where you can receive appropriate medical treatment in the event of an emergency. In a worst-case scenario, this can mean a medically equipped and incredibly expensive private jet.
This is usually not covered by your regular medical-insurance plan back home. Sometimes this coverage can get you home after an accident, but more often, it’ll just get you as far as the nearest major hospital so it may be worth buying if you’re planning an adventure in a remote area. “Medical repatriation” that is, getting you all the way home is likely to be covered only if it’s considered medically necessary. Before purchasing a policy, ask your insurer to explain what exactly what’s covered before and after you get to the hospital.
Keep in mind that medical and evacuation insurance may not cover you if you’re participating in an activity your insurer considers to be dangerous (such as skydiving, mountain climbing, bungee jumping, scuba diving, or even skiing). Some companies sell supplementary adventure-sports coverage.
for luggage that is lost, delayed, or damaged is included in most comprehensive policies, but it’s rare to buy it separately, and there’s a strict cap on reimbursement for such items as jewellery, eyewear, electronics, and camera equipment. If you check your baggage for a flight, it’s already covered by the airline ask your airline about its luggage liability limit; if you have particularly valuable luggage, you can buy supplemental “excess valuation” insurance directly from the airline. Homeowners or renters insurance typically covers your possessions anywhere you travel; the baggage insurance wcovers the deductibles and items excluded from your homeowners policy. Double-check the particulars with your agent. If your policy doesn’t cover expensive rail passes, consider Rail Europe’s Rail Protection Plan, which must be purchased when you buy your pass; it covers loss and theft of the pass but doesn’t cover trip interruptions.
Flight insurance “crash coverage” is a statistical rip-off that heirs love. It’s basically a life insurance policy that covers you when you’re on the airplane. Since plane crashes are so rare, there’s little sense in spending money on this insurance.
Collision coverage, an important type of insurance for rental cars, may be included in some comprehensive travel-insurance plans or available as an upgrade on others.