Encountering the unexpected is often one of the best parts about traveling – finding that great little hotel, discovering a lively street celebration, seeing great art, experiencing new adventures. It’s when you encounter the unexpected that is painful, costly, or dangerous that you will find your travel insurance most useful.
Here are the top 10 most frequently asked questions about travel insurance:
1. What is travel insurance?
Travel insurance is an insurance policy that provides financial protection for unexpected losses that can occur before your trip or while you are away from home. Plans will cover trip cancellations, emergency medical expenses, emergency evacuations, lost baggage, missed connections, and more for you and your family. Whether traveling inside the U.S. or abroad, travel insurance can provide a lot of assistance when things go wrong.
2. Why do I need travel insurance?
Like any other insurance plan, travel insurance mitigates the risk of financial loss that can be incurred when unforeseen events occur. Perhaps the most compelling reason for buying this insurance is that it can insure your financial investment if your trip has to be canceled. It also provides financial and logistical support if your trip is interrupted, you experience a medical emergency, you need assistance in a foreign country, your bags are lost, and more.
3. Won’t the insurance coverage I already have be enough?
Not necessarily. Your health insurance coverage has a limited range of protection that typically does not extend outside the United States. Medicaid, for example, does not cover senior citizens who need medical care outside the States. Your credit card coverage won’t provide the same level of coverage as travel insurance.
4. How much does travel insurance cost?
A travel insurance plan with cancellation coverage typically costs 5-8% of the total trip cost. Trips can be expensive, but consider how much more expensive your trip will be if you experience a medical emergency requiring transportation or treatment, or if your trip is canceled altogether. While trip insurance isn’t free, it acts just like any other insurance plan, providing leverage against potentially expensive financial losses.
5. When is the best time to purchase travel insurance?
The best time to purchase your policy is immediately after paying your initial deposits for your trip. This provides you with the maximum coverage period for cancellation. Plus, some benefits are only available when the policy is purchased within a certain number of days (10-15 is average). See ‘When should I buy my travel insurance?’ for more information.
6. Are terrorist attacks covered by travel insurance?
Terrorism is covered in most policies as a covered reason for cancellation. The terrorist event must be in a city on your itinerary, and it must occur within a certain number of days of your departure (usually 30 but as low as 7). Of course, having a ‘cancel for any reason’ benefit on your policy is your best bet if you have real concerns because you’ll be able to cancel your trip within the time allotted by your policy without significant financial loss.
7. What if we need medical attention – can travel insurance help with that concern?
Travel insurance includes coverage for medical treatments and emergency medical transportation (evacuations). Medical expenses can be high anywhere in the world, and your own health coverage may not extend outside your home country (Medicaid certainly doesn’t). If you encounter a situation where an injured party has to be transported or evacuated in order to get medical attention, you could be facing significant expenses without proper coverage. In addition, insurance provides assistance and foreign language support to find the nearest medical facility.
8. Should I buy insurance from the cruise line or an independent company?
One of the ways cruise operators make additional money is by selling their own insurance policies. Unfortunately, their coverage won’t apply to airline tickets, tour operators, or side excursions – it only covers the cruise. Plus, if you have to make a claim, you may be reimbursed with non transferable credits that have to be used on the same cruise line within a year. See ‘Why buying Travel Insurance from a 3rd party company is better than buying from a cruise line‘ for more information.
9. I have an existing medical condition – can insurance provide medical coverage for me?
Many policies provide waivers to exclude existing or pre-existing medical conditions. You must follow certain criteria such as purchasing the plan soon after making your first trip payment, and purchasing coverage that covers the full cost of your non refundable expenses. In addition, if you decide to cancel or end your trip due to your pre-existing condition, you’ll need medical confirmation of the recurrence (even if you believe you know how to treat it). Call your travel assistance services hot line and follow their procedure recommendations.
10. If I lose my job, can travel insurance help me recover my pre-paid expenses?
Several plans provide coverage for this situation, specifically if the insured or traveling companion is involuntarily terminated or laid off (through no fault of their own). Some plans offer optional benefits called ‘cancel for work reasons’, which adds a list of work-related reasons for trip cancellation to your coverage. These may include mergers, moves, and lay-offs, depending on the coverage. Of course, adding a ‘cancel for any reason’ rider can also help if you are concerned about job loss, but these cost more.