6 Things You Should Know About Travel Insurance
Planning a trip can be stressful and even more so when the unexpected comes knocking. Learn the essentials to travel insurance and protect yourself from financial woes.
Insurance is probably the last thing on your mind when you're planning a major trip or vacation. But it's important not to overlook it. If something goes wrong during your trip, it can get very expensive very quickly. In those cases, travel insurance offers you some financial protection and reassurance.
Since it is less common than auto or homeowner's insurance, you may not know much about travel insurance policies. Start with these top six things you need to know about travel insurance to decide whether it is right for you.
1. Travel Insurance Can Mean a Few Different Things
Travel insurance is an umbrella term that includes a few different types of insurance. It might refer to health insurance that covers medical bills incurred while abroad. Or it might refer to coverage for your belongings in case they are lost or stolen during your travels. Others are trip cancellation or interruption policies that cover some of the costs associated with canceling a trip before or during your travels, which may be necessary if you get too sick to travel or you booked a flight with an airline that went out of business.
A travel insurance policy might cover just one of these categories or it could cover several. Make sure you know exactly what you're buying so you can rest assured that you have all the coverage you desire.
2. The Longer the Trip, the More You Need Coverage
Although it affords you peace of mind no matter how far you travel or how long you spend away from home, not every trip needs travel insurance. Generally, the longer you plan on traveling, the more seriously you should consider getting insurance. That's because longer trips typically involve more flight and hotel bookings, more luggage, and more time for something to go wrong.
If you're planning a six-month tour of Europe, take a look at travel insurance. If you’re just hopping over to Miami for a week, it might not be worth the expense.
3. You May Already Have Travel Coverage
Before you go out and buy travel insurance, find out whether you already have some travel coverage in place. Your health insurance policy, for instance, might cover expenses abroad, including the expense of bringing you back home for medical care. Your homeowners policy might also cover your belongings when you're traveling. Some credit cards also offer coverage for lost bags when you fly, provided you booked the flight using the card (see 9 Insurance Perks Your Credit Card Provider Might Offer to find out what other benefits you might get through your credit card account).
Give your insurance agent and credit card company a call to find out what kind of coverage you have in place before purchasing an additional policy.
4. Use Aggregator Sites to Easily Compare Options
The internet has made buying travel insurance easier than ever. You can find websites that collect quotes from a large number of insurance companies so you instantly see and compare all of your options. This will give you a better chance of finding a good deal.
InsureMyTrip and Squaremouth are two well-known travel insurance aggregators that could get you started on your search.
5. Don't Let a Cheap Price Draw You In
While it's important to get a fair price for your coverage, cost shouldn't be the only factor in your decision. Some "low-cost" policies could end up giving you less coverage than you want or need. The low price might, for instance, be due to a low level of coverage that wouldn't cover the full value of your trip and belongings. A cheap policy could also have a very high deductible, so that if you file a claim, you will need to pay a large amount of the costs yourself before the insurer pays for anything.
If you see a policy that seems unusually affordable, take a close look; there's probably a reason for it.
6. Beware of Exclusions
An exclusion is a risk, peril, or event that the policy does not cover. Some trip cancellation policies, for example, won't cover losses due to a hurricane or cancellations because you started a new job, and some health insurance policies will not cover pre-existing medical conditions.
Make sure to ask about any exclusions in a policy before you sign the insurance contract so you don't miss out on coverage for something you really need.
While travel insurance might not be the most exciting part of panning a trip or a holiday, it might end up being the most important one if anything goes wrong. Keep these six pieces of advice in mind as you sort through your options, and then relax, knowing that you're protected.
Written by David Rodeck
David is a professional writer who specializes in making insurance, investing, and financial planning understandable. Before writing full-time, he worked as an insurance salesman and passed the Series 6 and CFP exams