A Quick Guide: When and Why You Should Consider Getting Travel Insurance
February 19, 2019
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There's nothing like the excitement of planning a big trip. In fact, researchers say that the anticipation alone can be a major happiness boost. One thing that could rein in your glee, however, is the price tag. A 12-night international trip will likely set you back around $3,251, according to financial research company ValuePenguin.
That's a lot of money, and it doesn't account for travel mishaps. What if you get sick while abroad? Or lose your bags overseas? These minor hiccups could end up costing you thousands, but the right travel insurance policy can help.
What Travel Insurance Covers
Trip cancellation is one of the most basic offerings, protecting travelers who have to cancel their plans due to accident, illness or death of a loved one. Some policies will refund you 100% of your travel costs; others may cover only a portion.
Medical travel insurance is more specialized, designed to reduce your out-of-pocket costs should a medical emergency strike during your trip. Whether it's for a stomach virus or a broken ankle, emergency transport and medical treatment can add up quickly — even if you have active health insurance back home.
Other types of travel insurance zero in on property damage and lost items. If your luggage goes missing in transit, the right policy will reimburse you for the cost of new clothes, toiletries and other things you need to replace. The same goes for valuables that are stolen during your trip.
What Travel Insurance Doesn’t Cover
Like with any insurance policy, read every line. Some plans, for example, won't cover injuries sustained during an especially risky activity, like skydiving. If you're about to set off on a rugged, outdoorsy adventure, it's probably best to shop carefully for medical insurance. You may also want to ask about pre-existing conditions. If your asthma flares up while abroad, will a hospitalization be covered? Every plan is different.
As far as itinerary changes go, having cancellation insurance doesn't necessarily give travelers the green light to modify their plans on a whim. Some policies only have your back if you're sick, injured or have lost a family member.
World Nomads, a popular travel insurance company, adds that not all plans will cover pre-booked, nonrefundable costs if your trip is interrupted once you're on it. In other words, if you come home early, then head back out again, that second leg of your trip may not be protected.
One other note about lost or stolen items: Some insurance companies won't approve your claim if you were partially at fault (i.e. your laptop is stolen after you leave it on a café table in Paris).
Who Might Consider Travel Insurance
Travel insurance might be overkill for domestic trips, but it's certainly worth considering when a lot of money is changing hands and you want to protect your investment (think hefty cruise deposits or pricey airline tickets). The same applies to travel in particularly risky areas, like the Caribbean during hurricane season.
How Much Travel Insurance Costs
This has everything to do with where you're traveling, the length of your trip, and the type of coverage you choose. InsureMyTrip says most plans cost anywhere from 4% to 10% of your total prepaid, nonrefundable trip cost. Translation: Coverage for a $3,000 trip may cost between $120 and $300.
Where to Buy Travel Insurance
Most airlines and cruise lines offer cancellation protection upon booking. Your homeowners or renters’ insurance policy may also cover items stolen from you while traveling. You can also check your rewards credit cards, as some throw in travel insurance if you use your card to pay for your trip. If it's minimal coverage, you can always add on more with an outside insurance company like World Nomads or InsureMyTrip.