Travel insurance can minimize the considerable financial risks of travelling – things like accidents, illnesses, missed flights, cancelled tours, lost luggage, theft, emergency evacuation and lots more mishaps. Keep in mind that every traveller’s potential loss varies, depending on how much of your trip is prepaid, the state of your health, how much your luggage cost, what country you’re travelling to, and what coverage you already have – including medical insurance, homeowners or renters insurance and credit card.
For some travellers, insurance is a good deal and definitely needed – for others, not so much. What are the odds you’re going to need it? Are you willing to take risks? How much is peace of mind worth to you? Take these thoughts into consideration, get informed about your options and make a decision that is best for you and your family.
Types of Coverage
Please remember that 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. Just be sure to ask lots of questions and always read the fine print to see what’s covered – for example, how they define ‘travel partner’ or ‘family member’ — you are going to need to know who qualifies.
There are six main types of travel insurance:
- trip cancellation & interruption
The various types of insurance are usually sold in packages – a combination of a few. So, rather than only buying medical or baggage coverage, you’ll most likely want to purchase a package that includes most or all of them. If you want just one type of coverage — such as medical — you can just ask for it, although even if you do, it will often include some baggage insurance too. Comprehensive insurance covers all of the above plus any expenses incurred if your trip is delayed or flight is missed, etc.
1. Trip Cancellation or Interruption Insurance
For some people, this is a very useful kind of insurance. It’s quite expensive to cancel or interrupt any kind of pre-booked travel, and for a fraction of the cost, you don’t have to worry about losing money if something comes up that you need to change your flight plans. If you’re young, healthy and travelling solo, this kind of insurance may not be something you need. But for families, who have the risk of many unforeseen events taking place, like a family member getting sick, accidents of any kind, etc, this kind of insurance may be worth looking into. Whether it’s for a missed flight or missing part of or all of a pre-booked tour, this insurance will reimburse you.
But, before you purchase this coverage, check first with your credit card company; some offer limited coverage for flights or tours that are purchased using the card.
Something to note here is that not all insurers will cover all airlines or tour operators. Many are obvious, like ones under bankruptcy protection, but others may surprise you, like some of the major airlines. If you’re purchasing this coverage, you’ll want to make sure your carrier is covered.
You will also want to buy your insurance policy within a week or so of the date you make the first payment on your trip. Policies purchased later than a designated cutoff date — usually 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 or other incidents.
You can avoid the question of ‘what is’ and ‘what is not’ covered by buying a costly ‘any reason’ policy. These offer at least partial reimbursement (generally 75 percent) no matter why you cancel the trip. Keep in mind that the premiums for this are so hefty that these policies don’t appeal to many travellers.
2. Medical Insurance
Before buying any kind of medical insurance, be sure to check with your current medical insurer because you might already be covered by your existing plan.
If your health plan covers you internationally, you may want to consider buying a special medical travel policy that covers whatever expenses your health plan doesn’t – like deductibles for example. In emergency situations where you may be faced with costly procedures or overnight stays, the hospital will often work directly with your travel insurance carrier for billing – but this won’t happen with your regular health insurance company – you’ll usually have to pay up front for these costs and then get reimbursed later.
For non-emergencies, like visits to a doctor, you’ll pay out-of-pocket. Bring home the documentation to send to your insurer, as they will often reimburse these costs.
3. Evacuation Insurance
Evacuation insurance covers the cost of getting you to a place where you can receive appropriate medical treatment in the event of an emergency. This is usually not covered by your regular medical-insurance plan and will need to be part of your travel insurance package. There are times when the coverage will pay to get you home after an accident (called ‘medical repatriation’), but most often, it’ll just get you as far as the nearest major hospital.
It’s important to note that medical and evacuation insurance may not cover you if you’re participating in an activity your insurer considers to be dangerous – things like mountain climbing, scuba diving, bungee jumping, skydiving, etc. If you are a bit adventurous and plan on partaking in these sorts of activities, you may want to ask about ‘adventure-sports’ coverage.
4. Baggage Insurance
Baggage insurance is going to cover any luggage that is lost, delayed, or damaged. It’s included in most comprehensive policies and it’s rare that you will be able to buy it separately. There is a strict cap on the amount they will reimburse for things like jewelry, cameras, computers, electronics, etc – make sure you read the fine print. 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 extra ‘excess valuation’ insurance directly from the airline.
5. Flight Insurance
Flight insurance, also known as crash coverage, is basically a life insurance policy that covers you when you’re on the airplane. And since plane crashes are pretty rare, there doesn’t seem to be much sense in spending money on this kind insurance.
6. Collision Coverage
This is an important type of insurance to have if you plan on renting cars. It may be included in some comprehensive travel-insurance plans or available as an upgrade on others. Be sure to look into this if you plan on renting any vehicles on your travels.
Insurance prices can vary quite a bit, but it’s said that most packages end up costing between 5 and 12 percent of your total trip.
Something that has become more popular, which is great news for travellers, is that many companies now offer comprehensive packages that serve as your primary coverage – meaning they will take care of your expenses regardless of what other insurance you might have. For example, if you have health insurance through your job, it doesn’t matter – they pay first and don’t ask about other insurance. So long to those horrible, unexpected, out-of-pocket expenses.
Do keep in mind though that some travel insurance, especially trip-cancellation coverage, is going to reimbursement-only. You’ll have to pay out-of-pocket for your expenses, then submit the paperwork to your insurer to get your money back. It’s certainly best to know these things before you need to know – so make sure you ask questions about this to avoid frustration down the road.
You should pay attention to advisories / warnings about travelling to at-risk countries. If you happen to be in one of these countries, there’s a good chance your cancellation and medical insurance are not going to be honored, unless you buy supplemental coverage, of course.
Insurance can be pretty expensive for travellers who are over 70 years old. Rates start going up dramatically for every decade over 50, but coverage is generally inexpensive or even free for children 17 and under.