Tips for Finding the Best Travel Insurance
Travel broadens the mind and gives you experiences that will last a lifetime. But if something goes wrong, those experiences turn sour and you could be out of pocket and out of luck. That’s where travel insurance comes in. It can cover you when you’re on vacation, providing reimbursements, compensation, and peace of mind.
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But how can you find the best deals, get the best cover and spend the least money? We’ll answer all these questions and more, showing you why travel insurance is important, who needs it, and what it can cover.
What Does Travel Insurance Cover?
Travel insurance covers you in the event that something untoward happens while you’re on vacation. The exact cover will depend on the policy, and there are many different types available, as well as comprehensive (but expensive) policies that cover most of them. You can expect to be offered the following cover when applying for travel insurance.
The idea of falling ill, having an accident and ending up in the hospital is terrifying in any situation. But when you’re on vacation, it’s even worse. The hospitals are alien to you, the medical staff may not speak your language, and there is an inescapable fear of being trapped many miles from home.
Fortunately, travel insurance can help with this. Medical cover is one of the most important features of travel insurance. Most policies will help you get to a hospital if you are lost and need assistance; most plans will also cover you for treatment.
Lost luggage is an unfortunate fact of life for travelers all over the world. Every year, over 20 million bags are misplaced or lost. The good news is that when you boil this down to a percentage it’s roughly 0.05% of all bags processed every year. However, while rare, it can also be catastrophic and lead to massive financial losses, not to mention the stress of beginning your vacation without your essentials.
Fortunately, most travel insurance plans will cover you in the event that your luggage is lost or damaged. Many plans require you to provide an itemized list of lost travel items before they will pay, but there are some that make this process easier.
Of course, travel insurance can’t help you to recover your luggage, nor can it compensate you for items of sentimental value, but it can provide financial cover when your bags are lost, stolen or damaged.
Even the most veteran travelers taking multiple flights a year are unlikely to have experienced luggage theft/misplacement or to have endured medical issues. However, if you’ve traveled more than a dozen times there’s a good chance you will have experienced some kind of delay, interruption or cancellation, either with the transport provider or with the hospitality provider.
This is something that travel insurance can also cover. If an airline goes bankrupt after you have booked a vacation, you will be covered. If you book accommodation and the flights are canceled at the last minute, leaving you out of pocket, you will also be covered. In fact, travel insurance should cover you for any serious injustice that leads to financial loss and is entirely the fault of the airline, airport, or accommodation.
One of the lesser-known benefits of travel insurance is coverage for rental car damage. If you’ve damaged a rental car or have been blamed for damaging a rental car, your travel insurance policy may offer some assistance and provide cover where needed.
Some policies can also provide similar protections for issues with hotels and cruise ship accommodation, although this cover can vary greatly from provider to provider so you should check your policy for more details.
Death and Dismemberment
It’s a morbid subject but when it comes to insurance, it’s one that can’t be avoided. If you have a comprehensive family plan, you may find that it offers you compensation in the event that your loved one dies. You may also be compensated for dismemberment and other serious health issues.
Who Needs Travel Insurance?
Everyone can benefit from travel insurance when taking an extended or expensive trip. There’s a good chance you won’t need it, in which case it’s an additional expense that can seem like a waste, but you’re paying for peace of mind and for those rare occasions when you do need it.
Imagine, for instance, that you spend all your savings on a vacation to Greece next summer. You pay for a two-week resort stay, and in the months leading up to the trip, you arrange local accommodation for your pets and pay for car hire, food, and attractions near your resort. In the days before your trip, the flight is canceled, and it’s too late for you to make further arrangements or request an accommodation refund.
Your plane tickets will be refunded, but what about everything else? As far as the airline is concerned, you didn’t book accommodation through them so they can’t be held responsible for that. It’s also not your fault or the resort’s fault, leaving you with very few options except to vent your anger at whoever will listen and hope that someone offers you something.
With travel insurance, the frustrations would be minimal as you would be covered by your policy. This is true even if the airline goes bankrupt, which has happened several times over the last few years and can occur without warning.
On all previous occasions, not only have future flights been canceled without immediate refunds, but many passengers have been left stranded in foreign countries with return tickets that are no longer valid.
Of course, there are times when travel insurance may cost more than it’s worth. For example, if you’re an elderly traveler with a history of medical problems, you may be quoted sizeable premiums for a trip abroad, making this a difficult decision. If you’re traveling to Africa or Asia for several weeks and you’re taking a lot of luggage, it’s worth looking into. However, if you’re traveling to London for a few days and only taking hand-luggage, you can do without.
England has free emergency healthcare, even for tourists, and if you don’t have any luggage in the hold then there’s very little chance of anything being lost.
It’s a balancing act, one where you carefully weigh up the pros and the cons (the cost of the policy versus the cover and the likelihood you will need it) and determine if it’s the right solution for you.
How Much Does Travel Insurance Cost?
Travel insurance premiums vary. According to the US Travel Insurance Association, the average is between 4% and 8% of the total cost of the trip. However, it all depends on the traveler and the vacation and there are many factors to consider, including:
- Destination: The cost of healthcare in your chosen destination can impact the cost of your policy. The more expensive it is, the higher the costs will be. The good news is that the US has some of the most expensive healthcare in the world and many other countries are cheap by comparison.
- Length and Cost: The longer the trip, the greater the risk, thus increasing the cost of your policy. The cost of the vacation will also be considered because if anything goes wrong, the policy will need to cover those costs.
- Age: Your age plays a massive role in determining your risk. The older you are, the more you can expect to pay.
- Extent of Coverage: Travel insurance is extensive, as discussed already. You can keep the costs down by selecting only the bare essentials.
- Specific Cover: If you have a history of a specific medical condition and want coverage for this condition, you can expect to pay a lot more. After all, insurance is about probability and if you have or have had this condition, the odds of you needing care for it again increase significantly.
Tips for Getting the Best Health Insurance
Now that you know what travel insurance covers, how much it costs and who can benefit, it’s time to consider how you can get the best cover for the best price. If you’re planning a trip any time soon, keep all of the following in mind.
You May Already be Covered for Healthcare
You may have more cover than you realize, even if you haven’t purchased your policy just yet. There are several reasons why this may be the case. Firstly, while the US healthcare system is costly for both locals and visitors, the same doesn’t apply to other countries around the world.
The UK, for instance, is famous for its free healthcare, which is offered to all citizens and, prior to Brexit, was also provided to all EU citizens. As an American, you can’t simply book yourself in for several tests and an operation as needed, but you will be provided with free point-of-contact care.
This means that if you fall ill or have an accident, you can use the country’s emergency services and receive care in the emergency room, completely free of charge. This is true even if your condition requires immediate surgery or an extended stay.
The UK isn’t the only country providing this service, and because the healthcare aspect is one of the most expensive parts of your policy, it’s worth looking into this before you purchase.
You May Already be Covered for Cancellations
Book your holiday using a credit card and you may negate the need for cancellation cover. All credit cards provide a chargeback feature that allows you to make a claim in the event that the seller doesn’t provide you with the services/products you paid for.
This won’t cover you for everything, but if the company goes bankrupt and leaves you stranded or forces you to cancel your holiday, it will cover you. In such cases, you may also be able to request a refund from the accommodation provider, even if they insist that no refunds will be provided beyond a certain date.
What’s more, many credit cards and reward cards offer some types of additional cover and insurance built in. Make sure you check all this beforehand and consider these benefits before agreeing to a comprehensive travel insurance policy.
Be Careful with Add-Ons
Booking sites and airlines may offer you travel insurance when you book. However, this is rarely the best deal that you can get and you may find that you’re paying more and getting less.
Although convenient, these policies should be avoided or at the very least they should be compared with the offers you have received elsewhere.
Consider an Annual Policy
An annual policy is more expensive than an individual one, but it will cover you for multiple trips. Not only will this save you time, but because you’re basically purchasing in bulk, you can get very good rates on comprehensive policies.
Annual policies are ideal if you travel a lot, whether for work or pleasure, but you won’t get your money’s worth if your globe-trotting is limited to the odd city break every year or two.
Only Buy What You Need
While it’s good to have comprehensive cover, it’s also pointless if you don’t need it. Be careful about removing cover just to save money but always remove the things that you definitely won’t need.
For instance, if you’re planning on using public transport when you arrive, you won’t need car rental cover. If you’re only taking hand luggage and won’t be carrying many valuables, you can do without cover for lost or stolen baggage.