Travel insurance might sound like just another extra expense to add onto an already large vacation bill. Is it really essential? The answer is, yes – definitely. Like any insurance product, travel insurance is there to cover the ‘what if’: while the chances are in your favor that your time away will be great with no issues at all, you need insurance to cover the small percentage chance that something could go wrong. Travel insurance gives you financial peace of mind – whether you were to lose your baggage, have the vacation canceled, or if someone were to fall ill and need extortionate medical care or even repatriation back to the US, then insurance is there to contribute to or cover the cost for you entirely.
There are various elements to an insurance policy, and the cover offered will vary according to the policy type and price. It’s advisable to think about your travel requirements before searching online, so you buy the most suitable policy and don’t waste money on cover you don’t require. Equally, you will need to make sure you don’t leave yourself out of pocket in the long run should you choose a cheaper package that might not cover all potential situations.
Lost baggage is one of the most common insurance claims and sadly seems to happen to every traveler at some point. A travel insurance policy will normally start from a cover of $500. It isn’t compulsory, but think about how much you’d have to pay out on new clothes and toiletries if the airline lost your bags for a two-week vacation. Note that high-value items like cameras and laptops may need to be named, as insurers will generally put a value limit per item otherwise.
Another optional extra is cover for loss, theft or damage to personal money and documents like passports. If you are planning to take currency with you, whether it’s on a prepaid card or in cash, then it makes sense to have it insured in case it gets stolen or lost. Not all policies will include this, so check the small print before you sign on the dotted line.
This is the most important part of your travel insurance – while your existing medical insurance should cover travel within the US, it’s likely that it won’t apply for international trips or cruises, or it will only cover the very basics. The cost of medical care can be eye-watering, and even a simple visit to a local doctor can make a significant dent in your holiday budget. Make sure your policy includes emergency medical treatment and medical evacuation. It should cover medical costs of $100,000 at the very minimum – ideally, you want it to cover you for millions of dollars. A decent level of personal liability cover can also be a good idea if you may get into a situation where you could be liable for large claims, for example in a motor accident where you were the driver found to be at fault. Various levels of cover will be available, depending on the price you are willing to pay.
Buying a waiver for those with pre-existing medical conditions is possible. This means that the insurance provider won’t hold the normal exclusions due to a pre-existing condition – so, if you need medical treatment or your condition worsens while you are away, your insurance should cover the cost.
Events outside your control
‘Force majeure’ is a common clause in many travel insurance policies. The term refers to events that may disrupt your trip, but couldn’t have been predicted or prevented, and therefore can’t be claimed for. This could include a natural disaster (called an ‘act of God’) such as an earthquake, or terrorist acts or a strike. Unfortunately, this is a concern for many of us today, but it’s something that insurers generally won’t cover. The chances of such an event are still small, but if you are really worried, then changing your choice of destination might be better for your own peace of mind.
All policies will specify an amount that you need to pay in the event of a claim before the insurer will delve in their own pockets. The higher the excess, the cheaper your policy is likely to be. Consider this carefully. If you choose a high excess which prevents you making a claim because it’s cheaper to cover the cost yourself, then it may defeat the point of having the policy in the first place!
Special interest trips
If you love sports that have a higher than normal risk of injury, such as skiing, then you will probably need a specialist policy to match. This is simply because you are more likely to make a claim, and the insurer needs to account for this. Check the insurance policy to see if all your planned activities are covered before you buy it. Backpackers insurance is another type of specialized insurance. This will cover for lots of different countries in one trip, and for an extended trip too (most insurance policies will set a limit on the length of a trip that you can claim for). It can often include cover for working abroad, which is a useful extra.
Single versus multi-trip
If you only tend to go away once a year, a single-trip policy is likely to be more suited to you – and it will be cheaper. However, if you go away frequently through the year, a multi-trip policy will offer better value for you. Remember there will be a cap on the length of your trip – usually from 30-60 days – so make sure your planned travel fits within those guidelines or you could be left with invalid insurance.
This really depends on how much money you have spent on your trip. If it’s just the cost of a cheap flight from one state to another, it may not be worth spending the extra dollars on insurance. However, if you have spent serious bucks on a once-in-a-lifetime trip, then it’s a good idea to protect your investment, in case you fall ill or something happens to the travel company you booked with.
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