Travel insurance can be a wise investment. Or, it can be a needless expense.
Savvy travelers will buy Travel Insurance coverage to protect against unexpected incidents. To put it simply, you may want to consider travel insurance if the possible financial losses are greater than what you’re willing to give up.
Continue reading below to learn about your options, what travel insurance covers, specific risk factors, and other travel insurance details to help you decide on an insurance policy.
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Reasons to Get Travel Insurance
First, there are avid travelers who navigate the world without ever considering travel insurance. They often find travel insurance unnecessary because they either plan cost-effective trips or don’t consider themselves at high risk for cancellations or other incidents.
On the other hand, if you personally find yourself in a higher-risk situation – let’s say your medical insurance doesn’t cover you while you’re traveling to the Caribbean during hurricane season – travel insurance might be a smart purchase for you.
To figure out whether it’s wise to get travel insurance, ask yourself these important questions:
- Are you planning a costly trip like a honeymoon or journey to the Far East?
- Could you accept the financial loss if you had to cancel your trip?
If not, you may be better off pocketing the extra couple hundred dollars and taking your chances on the road. Travelex Travel Protection can help you find a plan to fit your needs.
Risk Factors While Traveling
Risk factors may come into play as you make your way around the world.
When you travel, you’ll cover any pre-paid expenses like plane tickets, cruise fares, and tour packages, to name a few. In the event you cancel your trip, you’ll put yourself at risk for a number of added expenses like flight tickets, lodging costs, medical emergencies and more.
Here are some other examples of what-ifs that could derail your travel plans and make the case for travel insurance:
- Your travel buddy gets sick and you have to cancel the trip.
Generally, if it happens two weeks before the trip, you’ll be out the entire cost.
- A hurricane damages the resort you booked just days before your trip.
If you lose out on your reservations and travel costs, could you afford to re-book your vacation?
- Two days into your trip, your loved one at home ends up at the hospital in critical condition.
To return home, you would have to call off the rest of your trip. Your losses would include:
- Pre-paid expenses you did not use.
- Fees for last-minute return tickets.
- Any expenses to resume your vacation.
- Your family member has an accident and needs immediate care for two nights in a hospital.
Upon checking out, you receive a bill for the hospital stay. Could you afford it?
- Lost or stolen luggage with your belongings, prescriptions, money, etc.
After losing your luggage, would you be able to replace your belongings while you’re abroad?
What Does Travel Insurance Cover?
Below you’ll find an assortment of details on several types of travel insurance coverage.
Trip Cancellation Coverage for pre-paid, non-refundable expenses such as plane tickets, cruise fares, hotel rooms, tour packages, golf greens fees, etc.
Coverage for trip cancellations will protect you if you need to cancel a trip before your departure. Here are some valid reasons for cancellation:
- Sickness, injury, or death of a family member or a travel partner.
- Work-related issues (e.g., being laid off or required to work).
- A hurricane damages your destination or causes a flight cancellation.
- Terrorist incident in your destination city.
- The travel company goes bankrupt.
- Jury duty.
Types of Travel Insurance Coverage
Medical Expense Coverage: this travel insurance coverage is there for accidents and/or emergency medical or dental care while you’re traveling abroad. In most cases, your current insurance provider will not offer coverage. Importantly, Medicare never covers you abroad.
Emergency Evacuation Coverage: this travel insurance coverage pays the expenses for emergency evacuation, including airlifts, medically equipped flights to your home country, and other forms of transport to the hospital.
Baggage Coverage reimburses you for personal belongings if luggage is lost, stolen or damaged.
Baggage Delay Coverage provides funds for essential travel items until your delayed bags arrive (e.g., clothes, toiletries, etc.).
Travel Delay Coverage offers compensation for expenses when your flight is delayed, such as an extra night’s hotel stay or meal at a restaurant.
24/7 Travel Assistance Services can help you:
- Locate the nearest hospital, and arrange for medical transportation and treatment.
- Replace your medical prescriptions in an emergency situation.
- Search for lost baggage or obtain replacement luggage.
- Overcome any language barriers via interpretation services.
- Resolve issues with a lost or stolen passport, or travel documents.
- Adhere to any visa or passport requirements.
- Find a way to get home.
Life insurance coverage helps in the event of accidental death or dismemberment.
Hazardous sports coverage extends medical care with activities like SCUBA.
Rental car collision coverage replaces your insurance or the rental company’s policy.
Identity theft coverage provides services to help in cases of identity theft while traveling.
Surprisingly, you may already have some travel insurance coverage.
In fact, a number of credit card companies and insurance companies offer trip cancellation insurance, lost luggage insurance, and/or delayed luggage insurance.
There are two choices with travel insurance:
- Named exclusion covers a limited range of events and scenarios:
- It generally costs between 5 to 7 percent of the cost of your trip.
- Cancel-for-any-reason coverage offers relatively wide coverage:
- It generally runs about 8 to 10 percent of the cost of your trip.
Other Travel Insurance Tips
- Your homeowner’s or renter’s insurance policy may already cover your personal belongings while you’re traveling the country or abroad.
- Moreover, credit card companies sometimes offer benefits for travelers. If your credit card offers any perks, you might have quite a bit of coverage (i.e., sometimes up to $10K per trip.) Be sure to contact them directly and read the fine print. You might find that all you need is a small travel insurance policy to cover the gaps in your travel insurance coverage.