What is Travel Insurance and How Does it Work?

If you have ever booked a trip online or through a travel agent you are sure to have been offered to purchase some sort of travel or trip insurance.

Most people think of travel insurance as a scam, and some of the policies that you get offered are definitely not worth the money. Knowing if travel insurance is right for you, will mean figuring out exactly how the legit policies work and when to use them.

What is Travel Insurance?

Travel insurance is coverage that you buy to protect you from losses and potential risks while traveling. It might be coverage for a suitcase lost by the airline, a medical emergency while abroad, or trip cancellation.

The companies that offer this insurance often provide ancillary services that can prove very useful to travelers and their families. This might include access to interpreters, repatriation of remains, advisory services, and so on.

As with any insurance, it’s important to know exactly what you’re signing up for. Make sure that you get benefits that you might actually need. There are many different aspects of traveling insurance. In this case, we’d say rather over-insure than under-insure. You don’t want your dream trip turning into a nightmare because you can’t pay for an emergency medical treatment, or your bags have been lost.

The benefits will vary depending on the level of coverage that you choose, and what benefits you opt for. No plan can cover you for all eventualities, but a good plan will cover the most critical items. It’s important to understand the limitations of your coverage before setting out so that you don’t get any nasty surprises.

What is Covered?

That’s going to depend on what type of plan you choose. Here are some of the primary options available.

Trip Cancellation

If you book a trip and need to cancel it, you’ll lose the non-refundable deposit that you had to pay. Trip cancellation insurance can cover this portion as long as you cancel for a valid reason. So, say for example, that you had a sudden death in the family, that would be a valid reason.

Deciding that you’ve changed your mind about going is not. That said, if you buy your insurance quite far in advance of your trip, you might have the option of upgrading your policy. Many companies will allow you to cancel for any reason if you upgrade your plan early on.

Trip Interruption

You’re busy chilling in the Bahamas and get a call from your house sitter to say that your house flooded. You’ll want to get home as soon as possible. Trip interruption insurance has you covered here. It will cover the costs, making it possible to cut your trip short.

Emergency Medical Expenses

If there’s one type of travel insurance that is essential, this is it. Your standard health insurance may not cover you overseas, or it may offer limited coverage. If you’re injured abroad or get sick, you’ll need money to pay for the expenses fast.

While you might be able to access some government health facilities in the country you are visiting, this is not always a good option. In developing countries, for example, the healthcare services are usually under severe pressure and care may not be as good as you’re used to.

Emergency Medical Evacuation

What if you’re in the back of beyond somewhere and need to be airlifted out? The emergency medical evacuation insurance will make it possible for you to get the assistance that you need. It might also make it possible for you to get home again.

Repatriation of Remains

We don’t like to think about this, but what happens if you pass away while overseas? This benefit will ensure that your remains make it back home safely. Your family will be able to mourn for you without having to worry about how to get your body back home again.

Accidental Death & Dismemberment

If you are dismembered while overseas, this would pay out a lump sum. If you were killed, your beneficiaries would receive a lump sum.

Baggage

This is the part of the policy that most people think of when they think of travel insurance. If your luggage is lost, this will ensure that you can replace them. The benefit is limited, but it will be enough to get you some new clothes and replace vital items lost.

Additional Items

Many other value-adds might be added in such as:

• Concierge services
• Rental car coverage
• Protection against ID theft
• Emergency cash transfer
• Assistance services
• Travel delay

Should I Choose a Separate Medical Policy?

If you’re visiting for a more extended trip, this might be a good idea. A more focused travel medical plan will have a broader range of benefits than a simple general travel insurance plan would have. These plans often also include some of the benefits that you’ll find above.

Getting Travel Insurance Quotes

You can either contact your insurance broker or speak to the travel agent booking your trip. It’s worth checking what coverage if any your credit card company offers.

Sometimes you’ll be provided some free cover if you buy your plane tickets using your credit card. Typically, it’s not that extensive, but it all helps.

Top Companies

When getting quotes it is important to work with the best travel insurance companies.  These three are some of the top available:

Travelex – With multiple benefit levels, Travelex is a top insurer for families.

RoamRight – With a broad selection of comprehensive policies, RoamRight is a top travel insurance option.

TravelInsurance.com – With an A+ rating from the BBB, TravelInsurance.com is a top choice for those looking for coverage.

Getting the Most from Your Trip Insurance Coverage

Don’t hum and hah about whether to buy travel insurance. You don’t second guess on your other insurance options, you need to have some protection when you travel.

The earlier that you book and pay for your insurance, the better the benefits are likely to be. You’ll find that you get more flexibility in terms of cancellation and changes this way.

Also, be sure to find out exactly what coverage you have and what you have to do in order to claim. Make sure that you have either scanned or printed a copy of the documents to take with you when you go.

Then find out what the international call numbers are for the insurer. If you need help, you need to know how to reach the company from outside of the States. The toll-free numbers applicable here, won’t work overseas.

Travel insurance in today’s world is no longer a nice-to-have. With the spate of terrorist attacks around the world recently and the risk of accidents, you have to have some coverage. Hopefully, you’ll never have to use it, but if you do, you’ll be glad you have it.