Five Things You Need to Know About Travel Insurance
Booking travel always carries some degree of uncertainty. Travel insurance provides a safety net so you can move about the world with confidence. This insurance is designed to give you peace of mind and a sense of security when you invest in your valuable, well-deserved vacation.
Even the most seasoned travelers often feel confused about travel insurance — what are the options, what it covers, whether or not they need it.
There are many different policies available, and selecting the right plan depends on your particular circumstances. Follow along as we take a look at the most common travel insurance needs, determine what factors affect the cost, present different travel insurance products, and show you how to get covered.
While coverage and policies vary from state to state, here are some basics of travel insurance to get you started:
There are five main types of travel insurance. What you might need depends largely on what kind of trip you’re taking, what kind of traveler you are, and how frequently you travel. The five main types are:
Trip Cancellation and Interruption – this type of insurance provides full or partial reimbursement for a trip you need to cancel prior to departure, a trip that gets cancelled because a tour company or resort goes out of business, or a trip that gets cut short for a wide variety of reasons. Travel insurance can help you get your money back if YOU have to cancel a trip — but only if you cancel for certain reasons.
If you want more flexibility, you may need “Cancel For Any Reason” (CFAR) coverage.
CFAR coverage means exactly that. You can cancel for any reason and get a partial refund of what you paid, regardless of what caused your change in plans. You will pay a premium for this flexibility but it is often worth the investment.
Medical - for health issues that occur outside of your normal coverage area
Evacuation - due to disaster, dangerous weather, political emergency, or medical emergency
Baggage - reimbursement for lost, stolen, or damaged baggage
Flight Insurance - also called “crash coverage”, this is basically a life insurance policy that covers you while you’re on the plane, in the event of a rare crash
Travel expert, Rick Steves, explains the way they generally work is like this:
“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. If you want just one type of coverage in particular — such as medical — ask for that (though it might come with a little cancellation or baggage insurance, too). ‘Comprehensive insurance’ covers all of the above, plus expenses incurred if your trip is delayed, if you miss your flight, or if your tour company changes your itinerary.”
Just because you have health insurance at home does not mean that it will cover you on your trip. You need to check the benefits of your particular health insurance policy. It may cover you while you travel, but many do not. In fact, some insurance policies don’t cover health emergencies experienced on foreign-flagged vessels — which is what most cruise ships are. Check with your provider, ask your travel agent for suggestions, and of course direct any insurance-related questions to the provider. As Steves puts it, “Before purchasing a policy, ask your insurer to explain exactly what’s covered before and after you get to the hospital.”
Avoid purchasing travel insurance from the company that’s also hosting your trip. The reason for this? If that company goes out of business, chances are, so does their insurance.
Some companies offer comprehensive coverage that can serve as your primary coverage while you’re traveling. What does this mean, and how can it benefit you? It means that the insurance company will pay first, regardless of what other insurance you have. They don’t even inquire about additional insurance, saving you time, paperwork, and out-of-pocket expenses. TravelGuard and Travelex are two such companies that provide these policies as an option.
Weigh the cost of the trip with the cost of insurance. If you just bought a $79 ticket for a quick weekend in Chicago — is it worth it? Maybe, maybe not. If, however, you’re planning that bucket-list trip that you’ve been saving for months, travel insurance is likely a great idea.
If you’re looking to maximize your fun and minimize your risk, travel insurance might be just the right option for you. Take your time, ask tons of questions, and find what works best for you and your family.
Have questions about insurance – or any other travel-related topic? I’d love to sit down with you in person or over the phone and get to know you and your travel plans better. To get in touch, just click here.