Travel insurance – is it really necessary? At every step of your vacation planning, you’ll run up against offers to sell you travel insurance: you can buy it with your airline ticket, when you book your lodgings, when reserving your spot on a cruise or when booking a rental car. Obviously, it’s a high-profit item for the insurance companies, or they wouldn’t make it so easily available – but do you really need it? On the one hand, travel insurance can add a chunk of change to your vacation expenses. On the other, a good travel insurance or trip insurance policy provides protections against dangers that most travelers may not consider at all – until they find they need those protections. Understanding the pros and cons of a travel insurance policy can help you decide whether you need to buy into trip insurance, and if so, what type of travel insurance you should get.
Benefits of Basic Travel Insurance Coverage
No one likes to consider that they might fall ill or meet with an accident while on vacation, but it happens to thousands of travelers every year. If it should happen when you’re in another state or another country, accessing the medical care you need could be difficult – and could cost you a fortune. Even if you have excellent medical insurance, it could be tricky getting the necessary permissions and making the necessary arrangements for treatment. The most basic travel insurance policies will provide for medical care in an emergency situation under most conditions, and arrange to get you back to your home country. But that’s just one of the benefits of travel insurance. Here are some of the coverage options you can expect from basic travel insurance coverage.
Trip Cancellation
Having your trip canceled – or having to cancel your trip through circumstances outside your control – after you’ve paid out hundreds of dollars in deposits, or even paid for the entire amount, is worse than an inconvenience. In many cases, you could be out the entire amount you’ve paid into the trip – and got no benefit from. Most travel insurance includes some type of trip cancellation benefit that will reimburse you a percentage of your deposit – even if it’s non-refundable.
Reimbursement for Lost Luggage
Most travel insurance will reimburse you for items that were packed in your luggage if it is lost or stolen while you’re on vacation. There are a few things to watch for, though. In most cases, there’s a limit to the amount the insurer will pay out, both per bag and per item, so if you’re carrying an expensive piece of electronics, you may want to insure it separately. In addition, the insurance company does expect you to take reasonable care with your belongings. If your camera is stolen from your unlocked suitcase, for example, you may have trouble getting it replaced.
Health and Accident Coverage
In addition to covering the costs of your medical care, a decent travel insurance policy will also cover related costs. If, for example, your accident requires you staying behind in a foreign city while the tour moves on without you, your travel insurance should cover the cost of accommodations and of catching you up with your tour or returning you to your home, whichever is required. It will also cover the costs of prescriptions and necessary medical equipment, and many policies will even cover the cost of flying a family member or companion to be with you and accompany you back home if needed.
Repatriation Benefit
Having your vacation cut short by a family emergency is bad enough, but in most cases, you can’t even get a refund for part of your trip. Many travel policies will pay to get you home under certain unforeseen circumstances, including the death or illness of a family member, a house fire or other emergency – in some cases, even a pet’s illness. Read the fine print of your policy to see exactly what’s covered and for how much. If there’s one place to be generous when deciding on how much insurance cover to pay for, it’s under the repatriation benefit. If you need medical care and special treatment on the return trip home, it can run into hundreds of thousands of dollars.
Cash Replacement
If you lose your credit card, your credit card company will quickly cancel it and provide you with replacements. If, on the other hand, your wallet is full of cash when it’s stolen, you could be on your own. A good travel insurance policy will cover cash losses up to a set amount, and put it into your hands immediately.
24-Hour Emergency Help Line
One of the best reasons to pay for a vacation insurance policy is to get access to trained specialists in dealing with vacation emergencies. When you’re stranded in a foreign airport at 2 a.m. without even a toothbrush or your wallet, it can be an amazing help and comfort to have a knowledgeable agent on the line to get you set up with services as quickly as possible. Even something as simple as a voucher to pay for bedclothes and toiletries so you don’t have to sleep in your clothing while they hunt down your luggage can make a world of difference.
What Is Not Covered by Travel Insurance
Insurance companies aren’t in the business of taking inordinate risks, so it’s no surprise that there are some exceptions to the medical and accident coverage you can get through a travel insurance policy. In general, you’ll find that most holiday insurance policies have these standard limitations:
- You will not be covered for injuries received when engaging in risky activities, such as skiing or scuba diving. If you plan on a ski holiday or on taking part in risky activities, you can purchase specialty insurance that will cover you under those circumstances.
- In many cases, travel insurance policies will not cover you for expenses related to an illness or injury if a doctor advised you not to travel because of your medical condition. Some policies may exclude coverage of medical expenses for any pre-existing conditions.
- Nearly all policies will not cover you for expenses related to acts of terrorism or acts of nature. Some companies do sell insurance that will pay out if you are caught up in some international act of terrorism, however.
- If you cancel your trip for personal reasons not covered under your policy, the travel insurance will not pay out any refund.
- Most policies will not pay out any benefits related to the outbreak of a war in your destination country or countries.
- In general, travel insurance policies will not pay out for damage to your belongings caused by customs or TSA.
When Do You Need Travel Insurance?
Generally, you don’t need travel insurance if you’re vacationing close to home or only taking short trips. The further you travel and the longer your trip is expected to last, the more seriously you should consider travel insurance. Don’t just sign on the dotted line for a trip policy that’s offered with your cruise reservations or rental car, though. Take the time to research the various policies available and choose the one that provides the coverage you need for your trip.