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Travel insurance is a top priority when traveling, yet it is overlooked. You would not drive your car an inch without motor insurance, nor would you be comfortable without health insurance. Why should you ignore travel insurance?
When traveling, we all get excited about the new place’s experience and all the fun activities we will participate in. However, it would help if you were realistic enough to know that nothing in life is guaranteed to go as expected, and accidents and mishaps are bound to happen while on your trip.
Travel insurance might seem like an unnecessary expense, but it is a vital safety assurance when you are far away from home.
Illnesses, injuries, canceled flights, lost items, and family members’ death back home as just a few things covered by travel insurance.
This is one of the most complicated insurance policies, and the confusion makes many people ignore it. In this piece, we will break down the long and short of travel insurance and help you understand how important it is, and tips for picking the best one on your next trip.
What is Travel Insurance?
This is a policy that covers the costs and losses associated with traveling. It is used for both domestic and overseas travel.
Most of the companies selling travel packages give people an option to buy travelers insurance. These policies cover a host of different risks depending on the type.
The losses range from minor ones such as delayed luggage to significant ones such as health emergencies abroad.
Besides the financial cover, another big perk of travel insurance is access to assistance whenever you are. Some insurance companies have relationships with medical personal, immigration experts, and rescue services worldwide that can come in and help you whenever you are in a challenging situation.
How Does It Work?
Travel insurance does not work any differently from any other insurance policy, and it is a slight variation of what you already know about insurance.
In most cases, it reimburses you for the covered financial losses after you file a claim, and it is approved. Filing a claim means submitting proof of your loss to the insurance company so that they can ascertain what happened and reimburse you for the losses. Today, most companies let you do this online.
Most people think of travel insurance as a way of reimbursing you for illness or loss while on the trip, but it extends to more than this. It can cover many other issues that might prevent you from traveling or make you end the journey prematurely.
For example, if you fall ill and cannot travel two days before a trip and find that the airline company cannot refund you, travel insurance will reimburse you the money lost.
If you get injured midway through a one-week trip and have to go back home, the insurance will pay the costs for the remainder of the trip.
Other things that can be covered include cancellations due to bad weather, working during times when you were to travel, and if your provider goes bankrupt. Not all travel insurance plans will cover these perils, and it depends on the provider and plan.
What Is Covered By Travel Insurance?
All insurance covers have a list of what is covered and those exempted. Do not expect your policy to cover everything, as insurers have a list of things they can’t cover based on how they gauge their risk. Some of the everyday things that should be covered by a good travel insurance cover include;
- Injuries and illnesses while traveling
- 24/7 assistance in case you are stranded and need some help
- Lost, damaged, and stolen possessions such as luggage, documents, and electronics
- Cancellations for hotel bookings, flights, and transport arrangements if you fell ill or had some other emergency to handle
- Political crises, natural disasters, and unrest in the travel destination that forced you to return home earlier
- Financial cover if the travel service provider you chose went bankrupt and could not facilitate your travels
These are general items, and your policy terms and conditions will specify the limits for each of them. While it is easy to get excited about some of these items, pay attention to what is not covered, as here is where the disappointment lies.
It is terrible to encounter a situation you think travel insurance will cover only to find that it lies within the policy exclusions.
Most plans won’t cover;
- Accidents and injuries sustained by engaging in extremely risky activities such as paragliding, unless you pay more for it.
- Alcohol and drug-related accidents
- Loss of possession due to carelessness
- A blatant act of recklessness that led to the loss of an item or injury (the insurer defines recklessness)
- Pre-existing conditions and routine medical care
- Lost or stolen cash
- Civil unrest but not to the point that your government calls out for an evacuation
Types of Travel Insurance Cover
Travel Medical Insurance
This is one of the most common travel insurance policies you can buy. It draws a lot of similarities to traditional medical insurance covers.
It is a health cover, but you cannot use it for regular medical care events. For instance, if you travel abroad and suffer from a pre-existing condition that requires monthly medical checks, you cannot use travel medical insurance for it. These policies have many limits on pre-existing conditions unless you are willing to pay more for it.
Travel medical insurance is designed to afford you healthcare for illnesses and injuries you suffer from while traveling.
Most travel insurance policies cover various recreational activities with a reasonable risk, such as skiing and horseback riding.
However, they exclude adventure sports like parasailing and skydiving that have a higher probability of leading to an injury. You will have to buy special medical insurance designed for these kinds of activities to get covered.
It makes sense to get this insurance since your local medical insurance cover is limited to your country—very few work when you are abroad, which explains why it is paramount to get this cover.
Travel medical insurance can include cover for family members who you travel with or a provision for a family member to visit you if you are hospitalized. Note that the term “family” is subjective, and insurers will define it differently.
While natural disasters that affect your travel plans are often affected, covers often exclude pandemics from coverage.
This policy reimburses you for prepaid, nonrefundable expenses if you cannot travel for some reason. The typical justifications that insurers will approve include your illness, illness, or death of a family member you are not traveling with and natural disasters.
It only covers the nonrefundable cost of the unused part of the trip if it is interrupted due to a reason specified in the policy.
Besides cancellation, there is a delay clause that refunds you for expenses associated with delayed trips. This includes meals, accommodation, and costs related to the changed travel arrangements.
Most policies aligned to the disruption of your trip will cover cancellation, interruption, and delays. Do not confuse this insurance with the cancellation waivers travel operators give. They might refund you some money, but they are full of restrictions and do not operate in the same way insurance policies do.
Some premium policies will have an additional layer of coverage, such as a “cancel for any reason” cover that will reimburse a significant percentage of the trip’s cost, regardless of the reason.
As the name suggests, this class of travel insurance policies reimburses you for luggage and items that are stolen, lost, or damaged while traveling. Some will cover extra expenses when your luggage delays for more than a certain timespan, say 12 hours.
Insurers are very keen on the circumstances surrounding the loss and damage of certain items, especially ones that can easily be affected.
Examples are phones, cameras, tablets, and laptops. Such valuables should be handled with a certain degree of care as the burden of proof falls with the insured to show that they were not negligent. Besides, having these items damaged while under the influence of alcohol or any other highlighted activity will give the insurer a reason to nullify your claim.
This is a part of your policy that you will want to understand the fine print well enough, as personal belongings can go down to a very tiny thing, such as a gold ring. Your insurer won’t be happy to pay for your negligence and ensure you are careful.
Emergency Medical Evacuation and Repatriation
Travel medical insurance will pay for your medical costs while on a trip. However, you might find yourself in a medical emergency that will keep you hospitalized for a long time.
Here, it is ideal to have you repatriated back home for further treatment. This policy will take care of the enhanced medical expenses in specific emergencies and facilitate your repatriation back home.
Round the clock assistance
You won’t find this service in many travel insurance plans. It is an add-on where the insurer gives you a 24-hour hotline to reach out for if you need any assistance.
If you are traveling in a new place and something goes wrong, you will need a professional such as a doctor, lawyer, or immigration expert.
The hotline assistant will help you book another flight, locate a pro or get your luggage. They can also help with hotel reservations, updates on the place you intend to travel to, and information on the trip, such as vaccinations.
The policy will specify the information you can refer to the 24-hour hotline.
Accidental Death Cover
This policy pays a lump sum to your beneficiaries if you die in an accident while traveling. Some enhanced policies pay a portion of the total amount if you lose a critical body part or function.
Common instances include losing a hand, foot, limb, eyesight, or hearing. In the latter part, the sum is paid to you and not the beneficiaries as you will still be alive.
Note that this cover can be repetitive if you have enough life cover, which pays out a sum to your beneficiaries in an accident or sickness. However, it all goes down to the fine print as some life cover policies have exclusions, and you don’t want to leave your beneficiaries in a bad state.
Rental Car Insurance
This policy pays for damages sustained to a rental car if damaged in a wreck or natural disaster. This cover is different from regular motor insurance policies since it does not have liability insurance that pays for damage to other cars or medical treatment for other injured people, and you are found responsible.
This is a tricky cover since car insurance requirements vary widely from country to country. It is advisable to buy this insurance from the rental car company, as their fine print will align with the home country’s laws.
You can purchase rental car insurance in the U.S and find that it is irrelevant in the country you are traveling in.
Comprehensive Travel Insurance
The insurance policies mentioned above cover just about anything covered under the travel insurance umbrella but buying them individually might be costly.
This is why insurers have a comprehensive travel insurance policy that contains a couple of benefits bundled in one. Luckily, insurance service providers are keen on customer needs today and will allow you to bundle what you think is essential and make it part of your comprehensive travel insurance cover.
How Much Does Travel Insurance Cost?
No one wants to spend a lot of their travel money on travel insurance. This is why we want to highlight some of the crucial things that determine the cost of travel insurance and help you gauge the amount you will expect to pay when traveling.
What you will pay goes down to the following factors;
- Age – Travel insurance is cheaper for younger people between 20 and 30 years old. Those over 60 will pay more since they are susceptible to multiple health conditions, especially when traveling across the world.
- Activities – Your schedule while on holiday goes a long way to determine how much you will pay for travel insurance. If you plan to engage in risky activities such as skiing, scuba diving, and hiking, you will have to pay more to get cover.
- Type of cover – Some of the common types of insurance have been listed above, and the more benefits you want, the more you will pay. Comprehensive cover is the most expensive one as it bundles a couple of policies in one.
- Tour destination – All the countries in the world have a risk level attached to them, which determines how much you will pay for insurance. Local factors that come into play include the price of medical treatment, repatriation costs, and risks there.
- Time – The more time you are away, the more you will pay for travel insurance.
- Deductible – This is the predetermined amount of money you pay before the travel plan starts to cater for the costs. The higher the deductible, the less the cost of travel insurance.
The good thing about travel insurance is that you can get it for as low as a dollar a day, but it depends on what is covered. The range is so extensive, and a full week of coverage can cost anywhere between $5 and $100.
A travel insurance plan offered by Travelex Insurance Services, a notable insurer based in Nebraska, starts from $28. It includes trip cancellation, trip interruption, and emergency healthcare plus evacuation.
Emergency medical limits are at $50,000, and travel is covered up to 100% of $50,000 for cancellations. Besides, this policy has a 15-day pre-existing condition waiver, where your condition will be covered if you pay for the policy within 15 days of paying for the trip.
Allianz Travel, another notable provider, has different price points for their travel insurance, with the comprehensive cover costing $120 per person per trip. This is the premium option, and it covers medical emergencies, trip cancellations, interruptions, and loss of possessions, among others.
Travel insurance can cost just about anything, and it depends on what you want. Luckily, we have multiple online insurance quote comparison sites you can use to assess what various insurance providers charge and pick the right one for you.
Tips for Finding the Best Travel Insurance
Insurance is a major sector, and many companies want a share of the considerable number of clients. Expect to come across multiple insurers with mouth-watering travel insurance plans that will overwhelm you and make it hard to select the right one.
However, we have prepared you a few tips to see through the cloud and pick the best travel insurance. Read on;
Assess Your Needs
There is no one-size-fits-all solution to travel insurance, and this is reflected in the vast variance between the quotes you will receive. It does not always make sense to get the most expensive travel insurance plan, as you might not need to have all that cover.
Look at the situation surrounding your trip and anticipate some of the risks you will be exposed to. If you do not have risky activities such as scuba diving and hiking in your itinerary, it does not make sense to get the highest medical emergency limits.
Once you have a clear idea of what risks you need to be covered, you should be in a good position to tick all the policies that apply to you. This is the only way you can get the best travel insurance plan that gives you value for money.
Compare and Contrast
Look at various travel insurance service providers and see what they have to offer. The internet has made it easy to compare what companies charge for similar covers, and here, you will know the expensive ones. Note that price should never be compared in isolation and look at the value for money.
If another policy is costlier than another, the chances are high that it offers a perk that the other does not. Another explanation would be that different companies weigh the factors that affect the cost of travel insurance differently.
However, a comparison will give you a better insight into the standard prices for certain perks, and you will be better suited to pick the best policy.
Look For Ways of Saving With Travel Insurance
Do not mistake this for choosing the cheapest travel insurance policy out there. This can be done by understanding each cover’s fine print and taking steps to avoid spending too much on it.
For instance, cancel for any reason clause might seem attractive, but it is not necessary. Avoiding such a clause can save you a significant amount from your insurance cover.
The chances are high that you must have visited a doctor and can estimate the amount of money you will need to spend in the event of a medical emergency. Use this to guide the medical limits you choose, as picking the highest limit might not make financial sense in all situations.
Pay Attention to the Fine Print
Do not be excited about what the policy covers, as most of the issues you will encounter with the cover lie within the exclusions. Insurers have a subtle way of listing exclusions deep in the terms and conditions where no one bothers to check. Take time to read through the terms and get a clear picture of what you sign up from the word go.
Some terms such as “extreme sports” are very subjective, and all insurers define them differently. If you find such a clause in your policy, find out the specific sports activities that are regarded to be extreme by the insurer.
Check Existing Coverages
Look at the insurance policies you currently hold and see if they overlap with travel insurance. Duplication of insurance covers is a disadvantage since you will pay double but won’t get double benefits.
Insurance companies work to restore you to the financial position you were in before the loss, and even if they overlap, they will contribute to reimburse you the right amount. If you find that some of the risks you would want a travel insurance policy to cover are already captured by a policy you hold, exclude them.
Some premium credit cards include extra travel coverage automatically, but with limitations. This is the time to call up and know what exactly they cover to avoid overpaying.
How To File A Travel Insurance Claim
Insurance companies are not your friend. They will try all they can do to nullify many claims for them to remain in business. This way, you should understand the process to take if you have a travel insurance claim to be reimbursed successfully. In some cases, you might have to fight for it and always be prepared.
Understand the policy
While we might blame insurance companies for their failings, most of the procedures you have to follow are often indicated in the fine print.
Please do not make the mistake of overlooking this and always go through it to understand what is in store for you. All insurance companies have their way of going about things and do not assume that you will get it right from your previous experience with another insurer. Go through the fine print to ensure that everything is clear.
Call the Insurer
Once you suffer from an insured loss, call the insurance company immediately. In some cases, you must do this before you seek treatment, but it depends on your condition.
The advantage of calling your insurer before you get treatment is to direct you to the right health facility. You will avoid wasting time checking with facilities to find one they support. It will also save you from unnecessary out of pocket expenses associated with visiting a health facility that is not under their network.
The burden of proof lies with you and get copies of everything. Do not expect to show up at your insurer’s office and claim you were treated and have them reimburse you immediately.
You will probably have to mail them scans of the original receipts to prove what they owe you. Do not lose the originals since they might require them if there is an issue with the copies.
Review the Claim
Go back to the fine print and check the exact amount of money the insurer should reimburse. Some insurers have a reputation of bundling up claims and reimbursing a lesser amount. You need to be on the watch out and see that you are reimbursed what the company owes you, and no cent less.
Be Patient and Ready to Fight
These two contrast, right? Well, the entire travel insurance claims process takes time, and you will need some patience. This depends on the insurer you choose and how long they take to reimburse.
Altogether, your claim might not be as smooth as you expect, and here, be ready to wait a little longer than usual. However, insurance companies still play their tricks and do not hesitate to be upbeat and confront them if they do not make any progress.
If there is an issue, they should communicate this to you, but if they are not reimbursing the money and no one is saying anything, confront them nicely.
Answer: Selecting the right travel insurance can be a nightmare during a time where multiple providers seem to have attractive plans. However, you need to assess your needs and critical risk points before looking for travel insurance as there is no one-fits-all perfect cover.
Be ready to compare various covers looking at the value for money and other supporting factors such as customer reviews, time taken to reimburse, customer support, and the company’s financial stature. In a nutshell, try and see through those fancy advertisements and read the fine print to understand what you are signing up for by getting that travel insurance cover.
Answer: You can buy travel insurance after booking a flight, but it is not advisable to do this. It is best to purchase travel insurance a couple of days before the trip. When you present the application to buy travel insurance, the company will assess the surrounding situation and exclude certain benefits if it is too late.
Answer: Even if you have already made travel arrangements, you can buy travel insurance up to a day before the traveling date. Here, you have to decide if you want to have the cover consider some things that have been in place at least 15 days before the trip.
For instance, if you fell ill 15 days before the trip, you can decide if you want it included or excluded. Note that this will affect travel insurance costs, a reason you should buy it early.
Travel insurance is a wide area, and we have broken down some of the essential covers and tips for you. The excitement and anticipation of what lies ahead are unavoidable when traveling to a new place, especially on holiday. Still, these are trips where you are exposed to a lot of risks.
It is terrible to come back from a trip having spent a tremendous amount of money on medical expenses or replacing some of your lost valuables when you could have taken travel insurance and protect yourself from these risks.
Travel insurance is available today, and use the internet to look at some of the top service providers before selecting a suitable one for you.