As experienced travelers already know, trips can take unexpected turns, leaving you to regroup or return home.
If you have a big trip coming up, or if you’re considering travel as a regular way of life, take a minute to consider how you’d pay for detours you didn’t put on the itinerary, such as: an evacuation because of a natural disaster, theft or another crime, an unexpected need for a rental car, changing connections at the last minute, or paying for medical care in a different country.
This list could go on and on because perils have unlimited potential in the wider world.
Many serious travelers wouldn’t want it any other way: After all, unexpected twists help make traveling worthwhile.
When those unexpected changes add to your trip’s cost or require you to return home immediately, travel insurance could help smooth things out and help reimburse you.
Travel Insurance Guide
Do I Really Need Travel Insurance?
A lot of new travelers have the Best Buy approach to travel insurance. You know, when you’re in line at Best Buy, paying $40 for computer speakers, and the clerk asks if you’d like equipment protection for another $8?
I won’t go into the merits of equipment protection here, but my non-scientific observations show many people don’t think very highly of it.
They dismiss the offer with the wave of a hand or a grunt as they swipe their credit card and go on their way. A lot of us do the same thing when buying a new smartphone.
Protecting Much More than a Purchase
But not everyone who buys equipment protection or flight insurance regrets the decision or never successfully files a claim.
I’m not saying you should buy equipment protection on every purchase you make. But there’s nothing wrong with the desire to protect your purchase.
With travel insurance, you’re protecting much more than the tickets or hotel rooms you’ve purchased.
You’re also protecting:
- the time you’ve spent planning your trip.
- the vacation days from work you may be using to travel.
- your own sense of safety in an unfamiliar place.
- your ability to get back home as scheduled.
- your potential recovery from a health issue you experience while traveling.
- your personal belongings after a theft or baggage mishap.
What Travel Insurance Covers
You can find travel insurance in a lot of different forms. With so much potential for an unplanned problem, though, no single travel insurance policy can cover everything.
This is not-so-good news if you’re into quick decision making, but it is good news if you like to know exactly what you’re buying and how it can help you.
The key will be to look for a policy to covers what concerns you most, and your destination may influence your choices. Here are a few of the coverages you can expect to find:
There are countries in the world where hospitals will treat your injuries at no charge. Great Britain and many of the nations along the North Sea in northwestern Europe have nationalized medicine that will cover even visitors.
In other destinations, however, you may worry how you’d pay for a medical emergency, especially since many domestic insurance plans, including Medicare, wouldn’t help.
While most domestic airlines and even Amtrak will let you buy optional trip cancellation insurance, some active travelers want more protection — including international protection — in case they need to change plans.
Insurance plans tend to spell out specific reasons which qualify for trip cancellation protection, so read your policy carefully if you plan to depend on this coverage.
You can find similar coverage for missed connections.
Many of us, in unfamiliar surroundings, can become more likely targets for thieves. Whether we lose cash, luggage, medicine, or electronics these kinds of crimes can change our travel plans.
While insurance can’t scare off pickpockets and thieves, it can help you recover from these losses more quickly.
Some of the most frightening experiences for travelers happen when political instability, terrorism, or a natural disaster such as a tsunami or earthquake require an evacuation.
You may need to leave your vacation locale too quickly to worry with refunds or rescheduling. You also may need to spend a lot of money to reach safety.
Travel insurance can compensate you for these losses. It can also help if a sudden medical condition requires you to leave your destination immediately.
Lost bags — or luggage that somehow lands on a different continent — can also steal valuable vacation time. You may have to pay to replace everything you packed.
Travel insurance can reimburse these losses.
AAA won’t send help if you’re in Uzbekistan or Cameroon. Travel insurance companies have similar programs for international travelers, though. They can help smooth things out when you encounter a problem.
If your plane makes an unscheduled landing in a place where no one speaks your language, for example, your travel insurance company’s emergency helpline can intercede.
What Travel Insurance Won’t Cover
Travel insurance can be a valuable tool for frequent travelers, but it won’t cover every scenario you encounter. As you shop for travel insurance, and as you make travel plans, you should know when your policy would and wouldn’t help.
Take trip cancellation coverage, for example. A lot of people buy travel coverage precisely for this purpose. Yet most policies will specify situations that qualify for coverage and exclude all others.
Typical covered trip cancellations result from:
- Illness or injury: either to you or to people you planned to visit. Expect to provide documentation before being reimbursed.
- Evacuation: natural disaster, act of terror, or other kind of evacuation at your destination.
- Loss of job: or significant changes in employment.
- Loss of passport or visa: due to theft or natural disaster.
- Military redeployment
- Jury duty or school year extension
Your insurance company could include additional covered cancellations. But in most cases they will not cover cancellations not named on their list.
So if you buy tickets for the wrong month by mistake or simply change your mind about the trip, your policy probably won’t reimburse you.
Some companies do offer policies that cover all trip cancellations, but this coverage usually costs significantly more.
Other Times Travel Insurance May Not Help
Trip cancellation isn’t the only place in your policy where you should pay close attention. Other sticky areas include:
- Pre-Existing Conditions: If you know you could have a medical emergency that could derail your plans, your travel insurance policy may deny your claim. Travelers who have pre-existing conditions should pay close attention to this while shopping for coverage.
- Medical Tourism: Travel insurance companies tend to deny claims when you’re traveling specifically for medical reasons.
- High-risk Activities: Traveling to a country for a skiing competition, a bungee jumping opportunity, or a similar dangerous activity may exclude you from medical coverage.
- Breaking the Law: Getting hurt or imprisoned after breaking the law in another state or country will not impress your travel insurance company, and they’ll likely deny your request for reimbursement.
- Being Under the Influence: Losses you incur while intoxicated likely won’t be covered.
These are generalities, of course. You can find exceptions by shopping around. Just be sure you’re paying attention to these details while comparing policies.
How Travel Insurance Works
With a few exceptions, such as the emergency assistance programs we discussed above, travel insurance will have a relatively passive role in your actual trip.
Instead, you’ll need to be prepared to pay your own way out of trouble if you have to evacuate, change flights, or make alternative arrangements for getting home.
Once you’ve resolved the situation and returned home, you can file a claim for reimbursement for the expenses you incurred because of the covered peril.
Be prepared to document the situation with receipts, diagnoses, or itineraries as directed by your insurance company.
Companies with emergency assistance programs can still help you find a rental car, a new plane ticket, or a safer area, but don’t expect them to pay for all those arrangements while you’re still abroad.
When You Don’t Need Travel Insurance
Travel insurance makes most sense when you’re leaving the country. International travel plans tend to be more expensive and usually more time consuming to arrange.
And you’re also more likely to encounter dangerous situations requiring an evacuation on another continent — and you’re less likely to have friends or family members who can help.
Traveling domestically doesn’t usually include the same risks. You could probably skip travel coverage if:
- It’s a short, domestic trip: Problems still arise when you’re driving a few hours from home or taking a domestic flight, but in most cases you can probably handle these without travel insurance, especially if you’re a member of AAA or you took advantage of your airline’s trip cancellation coverage. If you travel long distances regularly, though, you may benefit from a travelers insurance policy.
- Your fees are already refundable: Many hotel accommodations and flights already include refundable ticket options either built into the price or for an extra fee. When you already have this feature, you wouldn’t need travel insurance for its cancellation coverage.
- You’re flying ‘Discount Air’: When you’re lucky enough to get one of those $89 flights from your regional hub to Orlando or the Big Apple, your travel insurance premiums may rival the cost of simply buying another ticket if necessary.
- You can afford to re-purchase: If the cost of your trip wouldn’t affect you financially if you had to pay for it twice, you’re self-insured — that is, you can afford the risk you’re incurring.
- You already have other insurance: Your existing health or auto coverage may already offer the coverage you need for a domestic vacation, especially if you need rental car coverage or roadside assistance.
Best Candidates for Travel Insurance
Travelers in the following situations can often benefit most from buying travel insurance:
- Studying abroad: College students or professors on a semester-long trip will have more opportunities to experience an unexpected expense. As a result you’d have more opportunities for travel insurance to help.
- Lifestyle travelers: More people, including younger people, are making travel a way of life. Rather than investing in more possessions, people want to invest in experiences. Travel, of course, offers abundant opportunities to experience life. Travel insurance can give you a safety net. In this case, consider an annual instead of a trip-specific policy.
- International business people: Global economic connections have more business people making regular trips out of the country with China and India as common destinations. Make sure your employer has a plan in place if things don’t go as planned.
How to Compare and Buy Travel Insurance
Travel insurance is widely available online, through a local insurance agent, through a travel agent, or even from the online service you use to buy airline tickets or rent hotel accommodations.
Give Your Decision Some Thought
A lot of people don’t think about travel insurance until they’re busy planning a trip and get the sales pitch. Typically, this is not a good time to consider travel insurance.
Instead, give the decision your full attention by looking at the big picture and asking yourself questions like these:
- Could the trip you’re planning put you in danger of losing a lot of money?
- Will travel be a regular part of your life for the next year or longer?
Match a Policy to Your Needs
Answering yes to one or both of these questions makes you a pretty good candidate for travel insurance coverage. You should start your search by determining which part of your trip makes you most concerned:
- Trip Cancellation? If you’re worried about losing money because you have to cancel a trip, take a close look at trip cancellation coverage to make sure it meets your needs. Remember, coverage won’t help unless your reason for canceling the trip is listed in the policy, or unless you buy a policy that covers all reasons for canceling.
- Medical Expenses? If you’re worried about medical expenses on your trip, pay close attention to a policy’s rules about pre-existing conditions.
- An Evacuation? If you’re worried about having to leave your destination because of political unrest or a natural disaster, check out a policy’s evacuation coverage details.
- Emergency Help? If the idea of being stranded overseas with no way to communicate has you concerned, look into emergency assistance programs insurance companies can offer.
Not all policies address all these concerns equally. Matching your coverage to your concerns can help make your investment in travel insurance more likely to pay off.
As always, an independent insurance agent can help you compare policies to make this happen.
Travel insurance is a financial decision. Like all financial decisions, the choice comes down to whether the product will be worth the cost for you.
For some, the premium will be worthwhile because travel coverage offers a tangible sense of security. Others prefer a more calculated dollars-and-cents approach as they decide whether travel coverage would pay off.
Either way you look at it, make sure your coverage will actually fit your needs.