Planning a trip is an exciting experience, with itineraries to plan, luggage to pack, and transport to arrange.
In among all the paperwork, it is imperative that you include travel insurance as an absolute priority.
This needs to be viewed as being as essential as packing your suntan lotion, as the consequences of falling ill or requiring medical care on your trip without it are dire.
What is Travel Insurance?
Travel insurance is a very specific type of insurance, which is specially designed and intended to cover any loses a traveler may experience on their journey.
This coverage includes aspects such as hotel tickets and room reservations, airline tickets, and payments for a cruise.
What Are The Types of Travel Insurance?
It is not enough to get your head around the concept of travel insurance. You also need to understand the different types available on the market, and the best choice for you and your needs.
Trip Cancellation, Interruption, and Delay
As the name suggests, this is an insurance which is designed to protect you if your tour operator, holiday company, or cruise line goes out of business.
If this happens, you will be reimbursed for any repaid and nonrefundable expenses.
This insurance type will also cover any reasons for cancellation outlined in your policy, such as personal illness, the illness or death of a family member, a natural disaster, or adverse weather conditions.
In addition, if you are forced to interrupt a vacation halfway through due to a reason outlined in the policy, you will be entitled to claim back the unused portion of the trip, even if this is nonrefundable by the company.
You can also choose to add on coverage for any trip delays, which will reimburse you for any additional expenses such as accommodations or meals required due to delays in a trip. This delay could occur if your flight is canceled, or you have another setback.
You can opt for one of the three policies:
- trip cancellation
- trip interruption
- trip delay
But most policies will offer a package which incorporates all three.
It can be tempting to skip out on the insurance in favor of the cancellation waivers offered by many cruise and tour operators, but this is a mistake.
These waivers will often include restrictions which can make your life more difficult, such as not issuing a refund if you cancel immediately before your departure.
Waivers are usually cheaper, but this reduced cost will come at a price.
As well as an initial base policy, some providers will allow you to include add-ons such as ‘cancel for any reason’ coverage.
This coverage will enable you to cancel your trip for any reason, and still be reimbursed for the large part of the cost. Some insurance companies will also permit coverage of pre-existing conditions if you have to cancel the trip for medical reasons, and this is a perk which may be exempt from traditional health insurance policies.
When purchasing your insurance policy, make sure you check for any exclusions which may be included.
The fine print will alert you to the aspects which are covered, and any exemptions which you need to be aware of. These will vary from provider to provider, and it is essential to do your research thoroughly before committing to a policy.
Always check the limits. There may be a maximum cost which can be claimed, as well as a per-day limit for incidents where your trip has been interrupted.
Baggage and Personal Belongings
Losing your luggage at the start of your holiday can leave you with unwanted stress, so it is crucial to ensure that your travel insurance covers this.
While it may not help you when you are stranded with no swimwear, it will cover and protect you financially.
This type of insurance will reimburse you for any personal belongings and baggage lost, stolen, or damaged during transport or the trip. You may also be able to access a plan which will reimburse you for any additional expenses incurred, such as needing to buy new clothes, if your luggage is delayed for more than a specific period.
There are usually limits as to how much you can claim per traveler, per item, and per type of item –e.g., jewelry.
This limit is often around $1,000 per category, which still offers a generous allowance for any lost items.
Emergency Medical Assistance, Evacuation and Repatriation
Emergency medical assistance, evacuation, and repatriation insurance offer payment for any medical expenses if you are sick or injured during one of your trips.
It will usually cover necessities such as your transport to the closest available hospital, as well as any medical repatriation costs incurred in flying you home.
As with any policy, there will be limits on the amount you can claim; usually around $50,000 for medical expenses. You will also be required to pay a deductible for most policies—this is the amount you will be required to pay before the insurance company kicks in.
This deductible is usually set when you take out the policy and increasing this amount will decrease your premiums.
One consideration with this type of insurance is the exclusions.
Pre-existing conditions are unlikely to be covered, and there may be some extreme recreational activities which are also exempt.
Sports such as skiing, skydiving, horseback riding, or parasailing are very unlikely to be covered. You will need to purchase a separate type of insurance policy designed for these activities.
As with the baggage coverage, it is worth checking your health insurance plan to see if they will include coverage away from home as this could be a cheaper option depending on your provider.
Major Medical Insurance
If you are planning to take a trip which will last for several months, standard travel insurance may not be enough.
In these situations, you will need to take out a plan which can cover major events and incidents, as well as last long enough to cover you for the duration of your stay.
These are similar in many ways to traditional plans, but there is some small print to be aware of before you commit.
The Affordable Care Act does not cover these plans, so there may be exclusions for pre-existing conditions, and some limits on the coverage offered, including prescriptions.
You may also be restricted as to the healthcare provider you can see. Many plans will have a pre-approved network which you will be required to choose from.
It may be a better choice to revisit your existing health plan and see if there are any add-ons available for an extended trip.
It is rare to find this as a standalone component. It is usually included as a feature in most packages.
You will have access to a 24-hour hotline, which can be used to call for help in situations such as finding medical or legal assistance, locating lost baggage, or booking a flight to cover a missed connection.
This hotline can also offer pre-trip advice, such as necessary visas and vaccinations, and even make reservations for restaurants, valets, and concierge!
Check the terms of your policy for more information, and to see what is included.
Rental Car Coverage
If your car needs a fix or repair, or if you are driving away from home, you may be required to hire a rental car.
If you are involved in an accident in your rental car, or if it is damaged by vandalism or a natural disaster, rental car coverage will be able to cover the costs and protect you financially.
This coverage is usually capped at a certain amount and is unlikely to include liability insurance—this is damage for the medical treatment and vehicle repairs of others involved if you are found responsible for causing an accident.
For this, you will need a separate policy. It is a good idea to check the terms of your regular insurance if you are staying in the same country, though this is unlikely to cover you if you are driving abroad.
Accidental Death and Dismemberment
If you are involved in a fatal accident during your trip, this insurance will pay a lump sum to your appointed beneficiary upon your death. In addition, you will also be covered if you lose a limb, eyesight, speech or hearing during the trip.
It is important to check what is covered by your policy. Some companies only offer coverage if your death is an accident in a plane, and some will exclude medical issues which result in accidents, such as a heart attack, aneurysm, or stroke.
There are usually also time restrictions on the policy.
For example, the death or loss must be within a year of the accident. It is a good idea to check your life insurance to see if this is already covered before you take out a new policy.
Do You Need Travel Insurance?
It can be tempting to opt out of travel insurance, as it can add an unwanted cost onto what may already be an expensive trip.
Doing so, however, is hugely irresponsible and could leave you with substantial financial losses, medical bills, and an inability to get yourself or a loved one home in the event of an emergency.
Even something as simple as a lost bag can be a nightmare when you are on a schedule, and arranging adequate insurance helps to take the pressure off, as well as help protect your assets.
It is an excellent idea to examine your other policies to see if you are covered. Some banks will offer a travel insurance policy as part of their package, and you may be able to access a good deal through a workplace scheme or similar program.
For peace of mind, medical assurance and financial protection, make sure that adding travel insurance is as much as a priority as packing your passport—the stress will far outweigh the joy of saving a few dollars in the event of an emergency.