The Ins and Outs of Travel Insurance

Like any other type of insurance; you take travel insurance for granted until you really need it. While the last thing you want to dwell on when planning a vacation is some sort of disaster situation ruining your trip, the fact is that, in addition to flights, hotels, and attractions, insurance is just as important a factor to consider when making your travel plans.

Depending on where you’re traveling to, it won’t always be a situation where you can hand over your insurance card and have that take care of all your needs, particularly in another country. However, you can also run into similar insurance problems even when traveling to another state if you have minimal coverage. You’ll do whatever it takes in the heat of any emergency, but what will you actually end up paying for in the end, especially if you had no protection to begin with. Take the time to do your research on traveler’s insurance before your trip; better safe than sorry right?

What is it?

There are typically two general categories of travel insurance – one specifically for medical coverage and one that specifically covers your investment in travel. When inquiring about traveler’s insurance either with your booking agent or your personal medical insurance company you may be able to choose coverage in the form of a comprehensive package or on an ad hoc basis.

If there’s a good chance you may need to cancel your trip at the last minute, look into trip-cancellation insurance (TCI) policies; these will cover you if you have to cancel a trip before you leave home or if you have to cut short the trip part way through.

Emergency medical-evacuation (EME) policies will cover the added cost of having to be rushed to a medical facility, but you can also look into bundled policies, allowing you to buy as much TCI as you want (typically subject to a $10,000 maximum), a moderate amount of EME, plus a handful of other coverage’s. The price is based on the amount of TCI you buy.

The types of travel insurance you’ll typically hear about, include:

Trip cancellation: generally covers you for non-refundable payments or deposits when unforeseen circumstances cause trip cancellations
Trip delay: provides you with reimbursements when your trip has to be postponed
Accident/sickness medial expenses: covers you for medical expenses incurred on a trip (especially important when overseas)
Medical evacuation/emergency transportation: provides coverage for costs of emergency medical transport on vacation
Supplier default: covers your deposits and payments in the case a travel supplier goes out of business, etc.
Baggage/personal effects loss or delay: covers your lost, damaged, or stolen items on a trip

How do I get it?

The best place to start researching traveler medical insurance is with your current insurance provider; this is called supplier provided coverage. If you’re covered under Social Security or Medicare, however, you won’t have a travel insurance option and may want to contact the American Association of Retired Persons for information about medical care coverage for travel. Keep in mind that supplier-provided coverage will typically be marked up $6 for every $100.

Almost every travel vendor, including cruise lines and other travel tour companies, offer a travel protection plan as an option with their travel packages. These types of third-party insurers will often cover you in case of a corporate financial pitfall, whereas your supplier-provided coverage will not. You can also look for other third- party travel insurance providers on the Web; just make sure to do your research because the Internet is a breeding ground for fraudulent insurance companies.

What do I look for?

Remember that price won’t be very negotiable, but that cutting back on travel insurance up front can easily come around to bite you on the back end. The cost of traveler insurance is generally 5 to 7 percent of the price of the vacation, so a $5,000 trip would cost roughly $250 to $350 to insure and to insure $1,000 worth of personal belongings for a week, it would cost roughly $50 per year.

You can never go wrong with asking a lot of questions. Just because something is stated online or in your literature, doesn’t mean it’s exactly what you’re going to get, and the last place you want to figure that out is when you’re stuck in the hospital or at the airport in some foreign country. If you’re traveling to Europe, consider the European Health Insurance Card (EHIC), formally know as the E111, enabling access to healthcare abroad.

Here are some questions to consider:

What type of medical transport will be covered (ie: transportation back to the United States for treatment)?
Are there restrictions for the types of activities?
What does coverage look like for pre-existing conditions?
How will insurance payments to other countries work? Can I be assured that those payments would be taken of?
What countries will I be covered in?
Does the insurance program include 24-hour emergency service and assistance when abroad?
Can I get explicit clarification on exceptions, exclusions, and any other limitations in writing?
What documentation do I need to file a claim and how quickly do I need to file any claims for them to be valid?
Does the insurance cover any legal costs?