Everyone enjoys traveling, but there are so many things that can go wrong, from canceled flights to stolen luggage. If you want to protect yourself, you should consider purchasing travel insurance no matter where you’re going and when you travel. When considering this type of insurance, here are common questions you should consider.
- What Could Go Wrong On My Travels?
Every aspect of your travel plans can go wrong at any given moment. It’s possible that your travel companion cancels at the last minute, or a hurricane hits your destination before your plane takes off. You have no way of predicting the future, but you can prepare for it.
You may end up having to leave your trip after you’ve already landed at your destination, which means that you’ll incur extra costs. In extreme cases, you could need emergency medical attention somewhere that your insurance doesn’t cover.
If you or one of your family members is on Medicare, make sure to double check what is and is not covered when traveling overseas.
According to Medicare Advantage, “Certain Medicare Supplement Insurance (Medigap) plans do offer some coverage for foreign travel emergency health care.
Medigap Plans C, D, F, G, M and N each provide foreign travel emergency care coverage, which you should keep in mind as you travel overseas.”
And then, of course, there’s the non-life-threatening stuff. You could accidentally leave your wallet at the airport or a restaurant, or your luggage could get stolen.
- How Much Money Could I Lose?
Prepayments are the most common loss when you don’t have travel insurance. Even if you cancel your trip ahead of time, your trip may require you to lose any deposits from prepayments. A resort stay or vacation rental will charge you a penalty for canceling, and if you’re prepaid in full, you might have agreed to terms that state you get nothing back when you cancel.
Other expenses can pop up if you have an emergency, such as any fees incurred when you cancel the rest of the trip while you’re on it. These costs include arranging a new early flight home, which means cancellation fees, and high last-minute fare and change fees.
An extreme loss could be the cost of emergency medical services and medical transport. You could be charged for these healthcare issues abroad, which means that your U.S. health insurance won’t cover it.
There’s no way to know exactly what could go wrong on your travels, but if you want to ensure that you won’t lose too much financially when things don’t happen as expected, you should invest in travel insurance.
- What Type of Coverage Is Necessary?
The answer to this question will vary depending on the person. There are a few different types that you should consider:
Trip cancellation insurance (TCI) will cover any prepayments that you can’t recover if you cancel your trip before it begins. This insurance will often provide coverage with sickness and accidents but is more restrictive when it comes to reasons that you’re allowed to cancel.
Trip interruption insurance (TII) covers the cost of any early returns. It also covers supplement costs for a cruise in case your companion returns home early, but you decide to stay to finish the trip on your own.
Medical and Emergency Evacuation: Medical and Emergency Evacuation insurance (Medevac) covers the costs of hospitalization and medical treatment when you’re traveling outside the U.S. It can even cover the transportation costs from the site of an accident to a hospital and then back home.
- How Much Does Travel Insurance Cost?
You can purchase a package bundle that includes TCI, TII, and Medevac as a comprehensive travel insurance package, which can include smaller things as well. However, you do need to buy a separate policy for every trip you take.
Packages can start at five percent of the cost of your total trip to as much as 15 percent. There is no set price as they can vary by coverage amounts, your age, and your destination.
Most insurance bundles include Medevac, but if you don’t want the TCI or TII, you can purchase Medevac as a standalone policy for less than the price of a bundle.
Because prices vary, it’s important to do your research to determine which plan is right for you and your budget.
- What Are My Other Options?
Travel insurance isn’t your only option when it comes to mitigating risk. Your other options include:
- Premium Credit Cards
Your credit card provider might provide you perks like travel insurance for your trip. Some of these cards offer sufficient insurance, while your regular health insurance might cover you when you’re traveling outside the U.S. Check with both your credit card providers and insurance providers to see if you have enough coverage that you don’t have to purchase travel insurance.
- Booking Smart
If you want to avoid cancellation fees, you can book components of your trip separately rather than through a third party that requires hard deadlines when it comes to cancellations. When you do this, you run the risk of an airline ticket-change fee, which you often can’t avoid after 24 hours. If you or the person you are traveling with has mobility limitations, some airlines also offer discounts or free accommodations, so be sure to call your airline prior to booking your tickets.
- Cancellation Policies
Cruise lines typically offer an alternative to TCI and TII by waiving any cancellation penalties. This is cheaper than insurance, but it isn’t as comprehensive.
- Personal Item Losses
Your renters or homeowners insurance policy might cover losses or thefts of items even while you’re traveling. Check your policy to see if you’re covered in these cases.
You should always consider travel insurance when you’re traveling because it can help mitigate any financial risk that you’ll incur on your travels. Once you understand all of the fees and costs you might be faced with on your travels –from emergency medical assistance to cancellation fees and theft– you can determine whether travel insurance is worth it.
At the very least, knowing that you’re insured can take the stress out of traveling. You won’t have to worry as much about losing your belongings when you know you’re covered and will be able to get back home.
If you’ve decided to purchase travel insurance, it’s typically best to go through an agency so that you can have the different types of coverage explained to you.
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.