As global travelers we need to know how to buy good travel insurance. Simply put good travel cover reduces the risks associated with illness and emergency.[toc]
Decent high quality travel cover also covers canceled tours, accidents, missed flights, terrorism, lost baggage, theft, emergency evacuation, travel company bankruptcies, and finally getting your body and personal effects home safely in case you die.
Some of these things make travel seem rather morbid and not what one likes to ponder while planning a holiday. These are the more unpalatable sides to traveling the world but important nevertheless.
if you are traveling, even if escaping or running away on a long trip your potential losses vary depending on what portion of the trip is paid for ahead of time, the likelihood of a refund of your air ticket, the value of your belongings, the state of health you are in, the financial state of your airline and tour company, and the coverage you already have (through your renters or homeowners insurance, medical insurance, and/or credit card).
For many travelers, having an insurance is often a very good deal; for others, it is not. What are the chances that you will need it? Are you ready to go for broke? How much do you value your peace of mind? If you do not need travel cover then there is no need to buy good travel insurance. Consider these factors, understand the options that are available, and make an educated decision for your trip.
Buy Good Travel Insurance Basics
The insurance plan incorporates five main categories: trip interruption and cancellation, evacuation, medical, flight and baggage insurance. You can go for supplemental policies to cover more specific concerns, such as political evacuation or identity theft. The different types are usually sold in some combination – instead of purchasing only medical, cancellation or baggage insurance, you will be buying a package that includes all of them.
On the off chance that you need only one kind of coverage in particular — such as cancellation — ask for it (however it may include a little medical or baggage insurance, too). Comprehensive or complete insurance includes all of the above (plus any expenses you might incur if you miss your flight, if the trip is delayed, or if the tour company ends up changing the itinerary). Consider all these aspects when looking to buy good travel insurance.
Nowadays, a lot of companies like Travel guard and Travelex offer complete packages that serve as the primary coverage. They take care of your expenses irrespective of the type of coverage you have (for example, if you have a health insurance through your place of employment). It essentially means that they pay first and do not make any queries about any other insurance you might have. This is an added bonus if you are looking to avoid paying out of your own pocket.
Travel Insurance Price Variation
Insurance prices can vary drastically, with some packages costing anywhere between 5 to 12 percent of the total trip costs. When seeking to buy good travel insurance your age is a major determinant of the price. The rates go up drastically for every decade over fifty. On the other hand, the coverage is free or inexpensive for children who are under the age of seventeen.
Most travel agents would recommend that you look to buy good travel insurance. (Agents gain get a commission if you buy one, and they can be held responsible for your losses in case they don’t explain the insurance options to you).
While you can take advice from travel agents, bear in mind that they are not insurance agents. For peace of mind when looking to buy good travel insurance direct any specific questions you have to the insurance provider.
Policies vary in each state, and only some insurance companies have licenses for every state. If you want to make a claim and face problems with a company that does not have a license in your state, you do not have a case.
Some of the coverage, especially trip-cancellation, is done only through reimbursement – you will have to pay out of your pocket for the expenses, then submit the requisite paperwork to your insurance company to reclaim the money.
As far as medical coverage is concerned, you can make arrangements to pay for expensive doctor or hospital bills directly. In any case, it is prudent to contact the insurance company to decide on the proper course of action. A lot of the major insurance providers are accessible throughout the day – which is especially convenient if you are facing problems in Europe.
Types of Travel Cover Available
The following section aims to give you a broad overview of the legalese that goes along with researching to buy good travel insurance. These are just general guidelines and policies can vary, even within the same company. The coverage offered by some policies and companies can change depending on whether buy the hotel, car rental, or flight on your own or whether you do it through a travel agent. Don’t hesitate to ask any question and read the document thoroughly to see what is covered.
Trip Interruption or Cancellation Travel Insurance
This is the most worthwhile and usable insurance. It costs a lot of money to interrupt or cancel a prepaid trip, and just for a fraction of the total cost, you can reduce your financial loss if something unforeseen happens.
The healthy, rugged, gung-ho and unattached traveler will probably make do without trip interruption or cancellation coverage. But if you have invested a lot of money on a carefully organized trip, if your health is not at its best, or if you have a dependent back home who is not in good health, it is a very good idea to get this coverage.
Before you decide to buy trip interruption or cancellation coverage, check with the company that issues your credit-card; they might offer limited coverage for tours or flights that are paid for with the card.
A standard trip interruption or cancellation policy covers non-refundable financial losses or penalties that you expose yourself to when you cancel a prepaid flight or tour for acceptable reasons, like:
- You, your family member, or travel partner are unable to travel because of layoff, sickness, death, or a list of other valid acceptable reasons.
- Your airline or tour company is out put of business or cannot perform as guaranteed.
- A family member gets sick at home (you will have to check the document to see how a pre-existing condition may affect coverage).
- You miss your flight or need an emergency flight for reasons beyond your control (like inclement weather, car accident or a strike).
So if you break your leg, for instance, a few days before you are about to make your trip, you can bail out without losing the money you paid for the trip. Or, if you are on a tour and are fall victim to an accident on the very first day of your trip, you will be compensated for the portion of the trip you weren’t able to utilize.
This kind of travel insurance be used whether you are traveling independently, or if you are on an organized cruise or tour (in which case, just the prepaid expenses – such as non refundable hotel reservations and flight – are covered).
Pay attention to the difference – trip cancellation is when you do not go for the trip at all; trip interruption is when you start your journey but have to pull out of it; in the latter case, you will only be compensated for the portion of the trip you did not complete. If you are taking an organized tour, it might already come with cancellation insurance.
Some good insurance companies do not cover certain tour operators and airlines. A lot of them are obvious – for instance, companies that are under protection for bankruptcy – but some of them can be surprising. Ensure that your flight carrier is covered.
It is prudent to buy good travel insurance within a week of making the first payment for the trip. Policies that are bought later than an elected cutoff date – determined by your insurance company – do not usually cover air carrier or tour company bankruptcies, terrorist incidents, or pre-existing medical conditions. Mental disorders are not usually covered.
If you are a nervous Nelly, you can go for an “any reason” policy. These heftily priced policies offer partial reimbursement at the least (generally 75 percent) irrespective of the reason for cancellation.
Bespoke Medical Insurance
Before you buy a separate medical insurance for your trip, check with your health insurer – you may already be covered by your existing medical plan. While a lot of insurers in the US cover overseas expenses, Medicare does not. In order to buy good travel insurance and cover it is essential to understand what that cover does and does not support in the event of a claim.
Even if your existing medical insurance covers you internationally, you should consider buying a travel medical policy. Most of the additional coverage that is available is secondary, so it covers costs that your health insurance does not (such as deductibles). However, you can also buy primary coverage which will take care of your costs to a certain extent.
In case of an emergency situation involving overnight stays or costly procedures, the hospital will work with your travel insurance carrier for billing (but not your health insurance carrier; you will have to pay out of pocket to the clinic or hospital and get reimbursed later). For non-threatening medical situations, a visit to the doctor will most likely have to be paid out of pocket (you will have to bring back the appropriate documentation for reimbursement). Regardless of the situation, it is better if you contact your insurance company from the road to alert them of the medical help you are seeking.
A lot of pre-existing conditions are covered by trip cancellation and medical coverage, depending on when you purchase the coverage and how recently you have been treated for the condition. If you travel to Europe frequently, multitrip yearly policies can save you a lot of money. Check with your insurer or agent before you commit.
For travelers who are hoping to buy good travel insurance above the age of 70, medical travel policies can be expensive. Compare the cost of the medical travel plan with comprehensive insurance, which usually come with good evacuation and medical coverage, which is very expensive otherwise. Any good travel insurance company will help you sort out your options. Some Medigap plans cover emergency care outside of the US; contact the issuer of your supplemetal policy for more details.
Other Useful Types of Travel Insurance
- Baggage insurance – This covers you for luggage that is delayed, lost, or damaged. It is usually included in comprehensive policies. However, it is difficult to but it separately. It puts a cap on reimbursement for eyewear, jewelry, photographic equipment, and electronics – read the fine print carefully. If you are checking your baggage for the flight, the airline already covers it (talk to the airline company to know more about the luggage liability limit; if you have valuable items in your luggage, you can purchase excess valuation coverage from the airline company). Check you renters or homeowners insurance to see if it covers baggage. Travelers baggage insurance covers the deductibles and items that are excluded from your renters or homeowners policy. Cross check the particulars with your insurance agent. If costly rail passes are not covered by your policy, consider buying the Rail Protection Plan offered by Rail Europe, which should be bought along with the pass (check what the plan for the pass covers to see if it is worthwhile).
- Evacuation insurance – It covers the expense of getting you safely to a place where you can receive medical care and treatment in the case of an emergency. This is not usually covered by your medical insurance. In certain cases, this coverage can get you home safely if you have been in an accident, but more often than not, it will just get you to the closest major hospital. Getting you all the way back home – also known as medical repatriation – is covered only if it is absolutely necessary. Check with your insurer to see what is covered before and after you get to the hospital. However, evacuation and medical insurance might not cover you if you are participating in an activity that is considered dangerous by your insurance carrier (such as mountain climbing, skydiving, scuba diving, bungee jumping, or skiing). Some of the companies offer secondary coverage for adventure-sports.
- Collision coverage – This is a type of coverage that provides for the expenses of replacement or repairs to rental cars due to collision. It is included in many comprehensive plans, and can be availed as an upgrade on others.
Prowling through the confusing landscape that is travel insurance is no simple task. On the one hand the concept of good travel insurance and why it is important is easy to grasp. Finding travel cover that will support you in a time of need is another matter entirely. This article aims to make that process a little easier when planning a trip.