When planning your next vacation, strongly consider including the cost of travel insurance in your budget. Why is travel insurance important? Because traveling is expensive, and losing money is no fun. You may never need to call on your travel insurance, but the peace of mind it offers can make or break your trip.
“There’s no shortage of reasons travelers should consider travel insurance before they hit the road or fly out.” States Dean Van Es, Founder and CEO at Fast Cover Travel Insurance. “For one, it could potentially alleviate the fear of something going wrong during your trip. Plus, if you get sick or injured and need to be hospitalized, travel insurance might be able to assist in removing the stress of finding the money to cover your bills, especially during an overseas trip.”
What is travel insurance?
Just like insurances that you have at home, such as homeowners insurance, identity theft protection, and health coverage, protecting your health and assets while you travel is essential. Travel insurance is available in many types and can help protect your investment in as many ways. Your travel insurance company will offer several variations on the theme.
Travel insurance works differently than normal insurance, where the insurer works with your provider to cover costs. Medical, lost luggage, theft, travel delays, cancellations, and other travel coverages are most often handled with reimbursements, in which you pay for the services or items you need while traveling and submit documentation afterward to receive a payout from your insurer.
In any case, the type of insurance coverage you choose will determine which protections you have and which trip costs you could be reimbursed for should you need to make a claim. Most travel insurance companies offer extensive full-coverage plans that feature protections for most things that could go wrong.
However, they usually also offer lower-cost options that cover only specific events. These policies are excellent for those with primary health insurance that’s honored worldwide or if your travel agent, airline, or cruise line offers refundable reservations.
Available Types
Many travel insurance types are packaged together in your insurance company’s policies. While there can also be one-off coverages available, most travelers purchase a bundled policy that covers all of what they need.
- Trip cancellation coverage protects your investment if you need to cancel your trip for any one of many reasons.
- Trip interruption protection covers you if your trip is cut short by a medical or other emergency or unforeseen circumstance.
- Medical evacuation is a special type of coverage that can pay to get you to a place where you can receive adequate medical attention.
- Baggage delay insurance reimburses you for costs associated with delayed luggage, such as temporary replacement clothing and essentials.
- Lost luggage protection provides similar coverages as baggage delay protection.
- Medical care insurance covers all or some of your unexpected medical expenses during your trip.
- Emergency medical insurance is usually part of the medical care policy inclusion.
- Theft protection is often sold as an add-on but can be part of a comprehensive policy plan.
- Collision coverage offers protection for your rental car.
- Other available protections can include legal assistance, search and rescue, lost documents, lost passports, and more.
What does travel insurance cover?
While your travel insurance options are seemingly endless, it’s important to know what coverages and protections they actually provide. Your insurer won’t pay upfront to protect your financial interest in most cases. Most often, if you make a claim, it will be for reimbursement for money you had to spend in order to get through the situation.
That said, travel insurance covers a wide range of travel scenarios. Both the dollar amount of protection and what your policy covers will be spelled out in detail in the policy documents. It’s crucial to read and understand what you’re signing up for when you purchase coverage.
What isn’t covered by travel insurance?
There are several situations in which your travel insurance can become invalid or not offer any protections from the start. If you travel to a location that’s deemed dangerous to travel to by the U.S. or other government, you won’t be able to make a claim against your policy.
Additionally, if you’re hurt while performing dangerous activities, such as skydiving, scuba diving, rock climbing, and others, your insurer is off the hook. There will be other restrictions based on your insurer. Be sure to read and understand them before signing on.
How much does it cost?
The cost of your travel insurance policy depends largely on the cost of your trip and the coverages you choose. You can also add a family member or several for varying prices. Typical costs range from 5% to 15% of your trip cost. However, adding special protections, such as the ability to cancel your trip for no reason, can run the price up to 50% of your trip expense.
Can I get travel insurance through homeowners insurance?
Your homeowner insurance policy may contain provisions for travel insurance. However, it’s more likely to offer protections for your home and assets while you travel. Check with your home insurer and your policy to see if there are travel insurance protections you can skip or choose reduced coverage amounts.
Often, travelers will choose a travel policy that covers expenses not covered by the travel provisions in their homeowners coverage. Keep in mind that the possessions you take with you are likely covered by your homeowners policy no matter where you are in the world.
Your private health insurance coverage may also offer medical insurance while you travel. However, it may be limited in scope and availability where you travel. Again, check with your insurer for details. Medicare doesn’t offer any travel insurance protections.
The best credit cards often have some form of traveler’s insurance connected to your credit card account. While these are highly variable in what they cover, you may be surprised by the extent of the protections available.
When to buy?
Buying travel insurance should be done within a few days or a couple of weeks after booking your trip. Waiting too long can limit your choices regarding trip cancellations and other protections. However, you can find policies available up until the day your trip starts.
Why is travel insurance important for Seniors?
Because medical insurance protections are often part of a travel insurance policy and Medicare is not accessible or valid overseas, having a travel insurance policy in place is essential if you’re a senior traveler. Learn more in our reviews of the best travel insurance providers for seniors overview.
If you carry private insurance as a senior traveler, check with your provider and any credit card companies you have for what they might cover first. Cruise lines and travel agents also often offer travel insurance policies that can be worth looking into.
Is buying travel insurance worth it?
Sarah Pardi, Travel Expert at Insurte, points out, “Many travelers don’t realize that, in some cases, travel insurance is mandatory when traveling abroad. Anyone who needs a visa in order to travel to the Schengen Area (this includes France, Italy, Spain, etc.) must take out a travel insurance policy.”
However, travel insurance isn’t generally required if you don’t need a visa to enter a particular country. Also, short or inexpensive trips may not be worth covering. However, if you need it and don’t have it, you could be out plenty of cash. We recommend budgeting your travel insurance needs along with all of the other expenses while you’re planning your travels.
