Going on a vacation or an extended business trip? You've probably bought some new things to take with you. But have you considered buying travel insurance?
Although many travelers are unaware of its existence, today you can buy insurance to cover the cost of many of the things that can go wrong before or during a trip. Offered through travel agents, tour operators, and insurance agents, policies are sold either for a flat, per vacation price, or on a per-day-of-travel basis.
Some policies allow you to purchase coverage against specific risks, while others package together coverage against the cost of a number of exposures that can occur on or before a trip or vacation.
Types of Available Coverage
The risks that can be insured against include:
Trip Cancellation or Interruption
This coverage insures you against the loss of your deposit or prepaid expenses in the event your trip or vacation is canceled or interrupted due to illness or injury, or due to the default or bankruptcy of a company with which you're scheduled to travel. In addition, depending on the policy, coverage may apply to a number of other reasons for your trip's cancellation or interruption, including:
- Injury, illness, or death of an immediate family member or of a traveling companion.
- Hospitalization or death of your host at your travel destination.
- The hijacking or quarantining of you, a family member traveling with you, or a traveling companion.
- You, a family member traveling with you, or traveling companion is subpoenaed; required to serve on a jury; or is involved in an auto accident en route to departing on the trip.
- You are required to move due to relocation by your employer.
- You're a teacher and the school year is extended past the time you're scheduled to leave.
This coverage insures you against the loss of your deposit or prepaid expenses in the event your vacation is delayed (generally, for 12 hours or more) due to a number of causes, including:
- Equipment failure or a strike.
- Inclement weather or a natural disaster.
- Loss or theft of money, passports, or other travel documents.
Baggage Travel Insurance
Airlines only cover baggage while it's in their possession, and most cruise lines, tour operators, and hotels offer little or no coverage. Baggage travel insurance covers your belongings that are lost, stolen, or damaged at anytime throughout your trip.
Medical Travel Insurance
This insurance generally covers two expenses:
- Medical evacuation—The high cost of an ambulance, medical helicopter, or other transportation, including the possible transport back to the United States if abroad, that may become necessary due to injury or illness.
- Accident/Illness —Covers the cost of medical help or hospitalization that is not covered by your health insurance, needed while traveling. This is especially important if you're traveling outside the US, since medical costs incurred abroad are often not covered by your health insurance, HMO plan, or government health insurance, such as Medicare.
Life and Accident Insurance
This coverage pays a benefit in the event of the death or dismemberment of an insured while traveling or on vacation.
Reparation of Remains
Covers the cost of arranging for having an insured's remains returned home in the event of their death while traveling.
Some travel insurance package policies also offer you a number of services while traveling. These include:
- Assistance arranging emergency cash transfers.
- Assistance finding local medical or dental help, and/or contacting medical consultation, including your own doctor, while traveling.
- Assistance finding local legal representation while traveling.
- Assistance replacing important documents, such as passports or tickets, that you lose while traveling.
Checking the Fine Print
A travel insurance policy is a contract, and as with all contracts, you should always read the fine print. In particular, when reading the policy, be aware of the following:
Know What Insurance You Already Have
Take a look at your homeowner's insurance. It might cover your belongings while you're traveling, and you may already have adequate life insurance coverage. On the other hand, don't assume the insurance that you have, especially your health insurance, will cover you for expenses incurred while traveling, especially if you'll be traveling abroad. Most policies specifically state that they don't pay for costs already paid by another policy you hold.
Know Exactly What the Policy Covers
If you've bought a family vacation package, then must each member of your family be specifically named in the travel insurance policy? Are you covered if you take a side trip during a vacation tour? These are some questions you should ask when assessing your policy. Moreover, if you're traveling abroad to an area or country undergoing unrest, see if the policy excludes hijacking or terrorism related injuries, or completely excludes all coverage when you're traveling in that specific area or country.
Check Pre-existing Conditions
See if your policy excludes payment, as many do, on claims for trip cancellation, trip interruption, or travel medical insurance, if your claim arises from a pre-existing medical condition. If it does, check to see if it offers the option of waiving this clause for a small additional premium.
Check Your Health Insurance Coverage
Again, as noted, most won't cover you while you're traveling abroad, but some will. However, virtually none cover medical evacuation costs when you're abroad. If you do buy this travel coverage, be certain it covers the cost of transporting you, or a family member traveling with you, home if medically necessary, not just the cost of transporting you to a local hospital or medical center.
Be Sure Any Travel Insurance Coverage You Purchase Is Underwritten by an Insurance Company
Trip cancellation/interruption coverage, for example, that is underwritten by the cruise line you're traveling on won't be much help if the cruise line itself goes bankrupt. If you have specific questions about the travel insurance you're considering purchasing, its best to call and direct these questions to the insurance company underwriting the policy.
Purchasing Travel Insurance
Okay, now that you know what travel insurance can include, the obvious question is, should you buy it? For most people, the answer is yes. As noted, many other insurance policies you currently have may not cover you when you're traveling. And, even if it does, in many cases the trip cancellation/interruption coverage itself is worth the cost of travel insurance. This is especially true given the fact that travel insurance has become, relatively speaking, very inexpensive.
- Reviewer: Michael Woods, MD
- Review Date: 11/2013 -
- Update Date: 11/08/2013 -