How do you decide if you need travel insurance or not?

First of all, if you are reading this and spending time researching travel insurance, there is a reason. Maybe the weather has you worried. You booked a nice week in Florida, but in the back of your mind there’s the thought of a hurricane ruining your trip.

Maybe you are concerned about your health while away from home. You know your insurance does not cover you outside the US, and you don’t want to risk an accident or injury in a foreign country.

There are also simpler concerns like lost baggage or delayed flights. Either one could be a major nuisance, and make your relaxing vacation a nightmare.

Here are a few “rule of thumb” situations where you probably want some travel insurance:

Expensive trips-The more potential loss, the more need for insurance. If you are planning a big trip, consider the total costs and ask yourself if you are willing to lose that amount.
Trips planned several months in advance-There is more potential for something to happen and cancel you trip. In the time leading up to the trip, you can get sick, lose a job, have a home fire, etc. There are also added benefits to purchasing close to the time of initial trip payments, such as Pre-existing Condition Coverage and financial default of travel companies.
Extended trips-For a week in Europe you might not worry about travel medical coverage, but imagine a month spent in South America without any coverage. Longer trips or certain destinations require travel medical coverage.

As travelers plan their trips this fall, many will have concerns about hurricanes causing problems with their plans

As the travel date approaches, you watch the Weather Channel, hoping to see clear sky forcasts in your vacation town. You’ve been waiting all year and the last thing you want is a rainy vacation.
You can’t always be so lucky, however. Many travelers like to take advantage of travel deals, but oftentimes the trip takes place during “hurricane season”. No hurricane, no problem. You have a great time, relax, get some sun, and get a good deal too.

But if a hurricane is in the forcast, things aren’t as good

With no coverage at all, you are at the mercy of the weather. If your trip is cancelled, you could be out a lot of money. Any non-refundable deposits or payments would be lost. With a bad hurricane, you could spend a few thousand dollars watching the storm from your couch at home. Not a great vacation.

If you do purchase travel insurance, many plans will provide coverage for trips cancelled for named hurricanes

This means that a storm must be upgraded to an actual hurricane by the National Oceanic & Atmospheric Administration National Hurricane Center.

Some companies have expanded the coverage to even include hurricane warnings

Again, the warnings must be issued by the NOAA, but this additional coverage can be a big moneysaver. If the threat of hurricane makes you worry about a cancelled vacation, consider a plan from these companies. Their added coverage for hurricane warnings could make your vacation much, much more enjoyable.

Many plans will offer coverage for “Terrorism”. The coverage generally covers incidents in itinerary cities only, and not a city nearby. Since the coverage provides benefits for trip cancellation, it is included in “package” plans.
Trip cancellation coverage is generally considered to be a “named peril” type policy, meaning that only those perils that are named in the policy are covered. This includes terrorism. Each company includes their own definition of terrorism, so be sure to read the terms thoroughly.

When citizens from foreign countries visit the US, they need insurance to cover any possible medical expenses

Many foreign citizen’s live here in the United States, attending schools, working, or just enjoying the country. When their family from home comes here to visit, they will need some sort of insurance to cover potential medical expenses.

This is very common with visiting parents; due to their age, the risk for accident or illness is higher.

For example: A family from India, living in New York for 10 years, invites their parents to visit. They decide to stay for 6 months so they can spend time with their grandchildren and even travel the country a little.

While in the Unites States, their insurance coverage from home will not provide coverage. In the case of an accident or illness, they will need coverage to pay the bills.

Citizens from foreign countries need to purchase travel medical coverage when visiting the United States. The basic coverage included in travel medical policies include:

• Emergency medical and dental expenses
• Medical evacuation
• Trip interruption (some companies)
• Baggage (some companies)
• 24 hour emergency assistance

There are two basic types of travel insurance coverage

Much of what we review, and what is in the mind of travelers, is called travel protection or a package plan. The main feature of a package plan is the trip cancellation coverage, but they also include medical emergencies, medical evacuation, and lost baggage.

The other type of travel insurance policy is called a travel medical plan

The main feature of these plans are to provide medical emergency/evacuation coverage. With some plans, there is some coverage for baggage (usually a small amount), or trip interruption due to the death of a family member.

Most travelers are not aware that their medical insurance from home will not cover them while in a foreign country

Travel medical plans are typically much less expensive that package plans, because the coverage is so reduced. Since there is no cancellation coverage, a very large financial risk is taken away, making travel medical plans much cheaper.

Travel medical plans are meant for travelers going overseas for a longer period of time, even up to a several years. Some examples of travelers who might use a travel medical plan include:

• Students studying abroad for a semester
• An employee spending a year at a foreign office
• Anyone living abroad
• Foreign citizens visiting their family here in the US

Travel medical plans are popular for both US citizens going abroad, as well as foreign citizens visiting the US

The plans are generally available from as little as 5 days, and up to 3 years. Travel medical plans are available to citizens from all over the world. Here in the US, ethnic communities are frequent users of travel medical plans.

For example: a resident of India is living and working here in the US. Their parents want to visit for a year and do some sightseeing. Their insurance from home would not cover them, but by purchasing an international medical plan, they can recieve coverage.

One of the advantages to shopping for and purchasing travel insurance online is receiving immediate coverage

Travelers can sign up for their policy, use a credit card to purchase, and get an immediate email confirmation.

Unfortunately, not all online companies provide this benefit. If you purchase a travel insurance policy online and do not get “real-time” confirmation, cancel the policy and purchase elswhere.

(By the way, insurance companies are required to offer a “free-look” period, where a customer can purchase the policy and return it for a full refund with a certain amount of time, usually 10 days. There is often an administration fee of around $5 to cancel and get a refund, but it is an option.)

Why is it important to purchase travel insurance real-time?

Let’s say you purchase a travel insurance policy for a trip, and you’re leaving the following day. If you don’t recieve immediate confirmation, your order will sit in an email until someone comes into the insurance office the next day. Then they will enter your information into a computer and issue a policy. It may be too late at that point.

They can also make typing errors or even have further questions about your trip, but cannot get in touch with you in time. There is more room for error, and the policy may not be in effect in time.

When you do buy from a good company and recieve an immediate confirmation email, you will have a policy number, and a copy of the policy details. Print this out and read it. Even though most companies will mail you an actual paper copy of your policy, this email is confirmation of coverage and you are covered as of the effective date.
When buying travel insurance, use a company that actually promotes their “real-time” purchasing

Comparison sites will list policies side-by-side, and you can see how they issue policies; usually by immediate email, as well as a paper copy by postal mail within 10 days.

(see How to Compare Quotes with a Travel Insurance Comparison Site)

What is this site all about and how can it help me?

Travelinsurancereview.net is an independant look at the travel insurance business. We review companies, products, and websites. We get your reviews with the Feedback Forum, which works much like the eBay Feedback system. We answer general questions about travel insurance, provide definitions & explanations, and basically just help you find the right way to go.

Think of us as the Zagat of trip insurance

With our Feedback Forum, you can see which companies are easy to work with, and which ones aren’t. Anyone can give feedback; it’s fast, simple, and the more feedback people give, the better choices travelers can make.

We also provide Editorial reviews and recommendations, based on real-person everyday use, mixed with the knowledge of a licensed insurance professional.

Most of all, TravelInsuranceReview.net is a starting point

When you’re planning a trip, you take your time. You research places to go, hotels to stay in, airlines to fly, and tours to take. You make decisions over time, and put your plan together.

The same goes for your travel insurance. You look around online, reading about different policies from different companies and not being sure what to do.

At TravelInsuranceReview.net you can read about the benefits of some policies compared to others. You can see how different sites work, and what the process will be like. You can get recommendations for the best policy from the best company.

Subscribe to the RSS feed to read posts over a few weeks. Take your time and find the right policy to protect your trip.

Scott McCartney, writing for the Wall Street Journal and syndicated on Recordonline.com, writes about some real-life travel situations where insurance may, or may not, be needed.

From the article:

“Michael Beriss received lots of cooperation from his airline and hotel when he had to cancel a trip to the Caribbean at the last minute last year. His son came down with high fever 12 hours before the family’s flight was scheduled to leave. The diagnosis: strep throat.

“I have never purchased travel insurance because the premiums look too high relative to the risks,” he said. “Of course, my first thought was that I had made a mistake by not purchasing insurance.”

Instead, his airline agreed to a full refund after he sent a letter from his son’s doctor. The hotel also waived a cancellation fee. “We did not lose any money from the last-minute cancellation, though we were disappointed to miss the trip,” Mr. Beriss wrote. “Given the policy of the airlines and hotels, I really don’t believe travel insurance is appropriate.”

It should be noted that airlines and hotels aren’t always as generous as they were to Mr. Beriss; often a change in plans means penalty fees and a credit towards future flights, not a refund. That’s one reason some people prefer travel insurance, and travel insurance does offer other benefits”

Mr. Beriss was very fortunate to be able to work with the travel providers to get refunds. This is oftentimes not the case, and travelers end up losing the non-refundable, pre-paid costs.

Also from the article:

“Travel agent Steve Danishek from Seattle, whom I’ve known for many years as a wise voice on travel issues, pointed out that the cost of a medical evacuation can be huge. “My mother, now deceased, wasn’t worried about the possibility of losing the $3,000 cost of a Panama Canal cruise and didn’t purchase insurance, but was stung by the $31,000 cost of the air ambulance from Panama City to Seattle for her broken hip,” Mr. Danishek said. “

In this case, the smaller potential loss of a few thousand dollars did not concern the traveler. Oftentimes, a traveler will think a small potential loss, $1000 for example, is not worth insuring. When insuring for less than $1000, it costs you are larger percentage in premium.

For example: A $500 trip costs $45 to insure, which is 9% of the total trip cost. However, a $1,000 trip costs $74 to insure, which is 7.4% of the total trip cost. A $2,000 trip costs $140, which is 7% of the total trip cost.

Despite this, the medical evacuation in the example above cost $31,000, an expense that travel insurance would have covered.

The article also mentions ski trips and an example of a $15,000 Air Ambulance claim by an injured insured. It is important to note that many policies exclude injuries suffered during dangerous sports or activities. You can, however, opt for hazardous sport coverage with many plans. This costs a little more, but will provide coverage for that skiing accident.

Related Links
Article from WSJ Online
Medjet Assist provides emergency medical evacuation coverage