If you’re planning to travel, don’t forget about purchasing a good travel insurance plan. While some people might assume travel insurance is completely optional, it’s actually far more essential for travelers than they think.
Travel insurance, as implied, provides insurance coverage for travelers in order to minimize potential financial risks that may occur when abroad. Going by that alone, you could say travel insurance is a necessity. But before you buy, it’s important to learn what travel insurance can do for you. In this article, we’re going to review why you need travel insurance.
What’s Travel Insurance?
As mentioned, travel insurance is a type of insurance policy. It mainly provides financial coverage for travelers who undergo unforeseen circumstances while traveling abroad. Many traveler’s insurance policies cover various risks that may occur when traveling. Some of the most common risks include missed flights, canceled tours, lost baggage, theft, accidents, illness, emergency evacuation and accidental death benefits.
Depending on the type of insurance policy you purchase, you may be afforded different benefits based on your purchased policy. For most people, travel insurance can be worth the purchase, while others may need to look further into an insurance policy that fits their travel-related needs.
Travel Insurance Basics
If you’ve already taken a look at the market, you’ve probably noticed that there are several types of travel insurance. These types are: trip cancellation and interruption insurance, medical insurance, evacuation insurance, baggage insurance and flight insurance. We’ll go into more detail about these in a while.
Many travel insurance policies are also supported by supplemental policies, which add on more coverage for people who might need a specific type of coverage, such as identity theft coverage or evacuation coverage. These supplemental policies are typically sold as add-ons to main policies or as a part of a complete travel insurance package. Most of the time, people purchase what’s known as comprehensive travel insurance, which pretty much includes most of the aforementioned policies.
Travel insurance policies do vary by state. While some travel insurance companies do sell to customers in most states, you’ll have to learn if the company is licensed in your state, otherwise you won’t be able to utilize the company. Not only that, your location and other personal factors can influence how much your policy costs.
Travel insurance prices can vary, generally costing as much as 5 to as much as 12 percent of the total cost of your trip. Age is one of the most common factors that affect the cost of a travel insurance policy. Rates typically get higher for customers aged over 50, while coverage is typically inexpensive or even free for children under age 17. Most people should expect middle of the road prices for their travel insurance coverage, particularly those aged 20 to 49.
Types of Travel Insurance Coverage
Travel insurance has several types of coverage options. The information below is a guideline for the type of coverage you might find on the market. It’s highly recommended to research and get in touch with a travel insurance agency for more information.
Trip Cancellation or Interruption Insurance
This type of insurance policy coverage covers non-refundable financial losses or penalties incurred from cancelling a prepaid trip, tour or flight for any acceptable reason, such as:
- If you or a travel partner can’t travel due to sickness, death, layoff or other reasons specified by the agency.
- If your airline or tour company can’t perform as promised.
- If a family member becomes ill back at home.
- If you miss a flight or need an emergency flight for reasons beyond your control.
This coverage is best for people who may need to cancel or interrupt their trip for any reason.
This insurance policy essentially provides health insurance coverage while you’re on a trip. While it’s highly recommended to have some type of health insurance coverage when traveling, you might already be covered by your health insurance provider.
Many health insurance providers in the United States do offer some type of coverage for those who travel. Some, such as Medicare, don’t provide that type of coverage. Due to this, it’s recommended to talk to your health insurance provider about your travel coverage options before purchasing a separate policy.
Other Insurance Options
Travel insurance also has other options that people can purchase before they travel. Evacuation insurance, baggage insurance and collision insurance are some of those options.
Evacuation insurance provides coverage for travel expenses incurred in order to get you to emergency medical care. While this coverage does get people to the nearest major hospital, it generally doesn’t coverage return travel expenses.
Baggage insurance, as implied provides coverage for luggage that may be delayed, damaged and/or lost. It’s typically included in most comprehensive travel insurance policies.
Collision coverage is important for those who utilize rental cars, since it provides coverage for them. This option may be included in some comprehensive policies, but is generally purchased separately.