Can I avoid financial disaster by not purchasing travel insurance?
Travel insurance is a smart investment if you want to protect the funds you’ve set up for your vacation. After paying for transportation, lodging, food, and entertainment, you have every right to be wary of adding yet additional expense to your vacation budget. Yet, it may be prudent to invest in travel insurance if you cannot afford to lose that sum in the event of an unexpected expense.
Squaremouth, a travel insurance comparison website, reports that the average cost of an insured trip is $5,453. Typically, travel insurance will set you back around $252. There’s a chance you’re planning a long weekend break on the cheap, or there’s a chance you’re planning something far more extravagant. In most cases, the cost of travel insurance ranges between 5 and 6 percent of the overall cost of your trip.
What Does Travel Insurance Include?
If something unforeseen happens before or while you’re away, travel insurance will help cover the costs.
Travel insurance for trip cancellation
Cancelling your trip before you’ve even finished packing your sunscreen and swimwear is always a possibility, especially if something unexpected happens, like your tour company going out of business, you being sick, or a family member passing away. If something like this happens to you, trip cancellation coverage on your travel insurance policy will reimburse you for any money you’ve already spent on your trip that you can’t get back.
In addition, the trip cancellation feature of the insurance will typically compensate you for the unused portion of the trip if you, a family member, or a travel companion becomes ill or wounded while on the road. If you, a member of your immediate family, or a travel companion passes away while away, you may be eligible for the trip cancellation benefit.
Travel insurance that allows you to cancel for any reason
You can only collect on trip cancellation insurance if you cancel for one of the reasons specifically listed in your policy. Further cancellation protection is available in the form of “cancel for any reason” travel insurance.
If you need to cancel your trip within 48 hours before departure, you may be eligible for a reimbursement. Perhaps you’ve opted to stay put and go to your high school reunion instead of traveling. The price of regular travel insurance policies is typically increased by 50 percent to include CFAR coverage. The standard rate of reimbursement is 75% of the amount actually spent on transportation.
Emergency travel medical insurance
The plans for your holiday could be derailed by a medical emergency no matter where in the world you are: kayaking in Argentina or going on safari in Zambia. The financial impact might be substantial as well.
Unfortunately, many U.S. medical insurance policies do not cover you when you’re outside the country. If you are harmed or sick while traveling, you’ll have to foot the bill for your own medical care, which isn’t as unlikely as you may assume. Allianz, a provider of travel insurance, says it receives more than 4,000 calls a year from customers experiencing medical emergencies abroad.
In most cases, travel medical insurance will pay for things like visits to the doctor, stays in the hospital, prescriptions, and diagnostic tests while you’re away from home.
Travel insurance for medical evacuation
Think of being airlifted off a cliff in Switzerland following a hiking mishap, spending a few weeks in a hospital in Colombia following a heart attack, or needing to return home from Jamaica following a hip fracture in order to heal.
Allianz estimates that the average cost of a helicopter or ambulance ride from the scene of an accident or illness to the nearest medical facility is between $15,000 and $200,000. The cost of the therapy itself is not included here.
Rescue Effort Due to Illness If you get sick or injured while traveling, your insurance will pay for transportation to the nearest medical facility or even return transportation to the United States for more specialized care, if necessary. As well as paying for a patient’s medical evacuation, some policies will pay to have their remains returned to them in the United States.
A good illustration of this is HTH Worldwide’s TripProtector Premier plan, which offers coverage of up to $1 million for medical evacuation and up to $500,000 for emergency medical expenses, making it among the most comprehensive policies of its kind.
Missed connection travel insurance
If you miss a flight connection, it could end up costing you a lot of money. If you miss your connecting flight due to any of the covered circumstances, your missed connection travel insurance will reimburse you for your lost expenses.
If your flight or ship is delayed by three, six, or twelve hours due to an issue such as bad weather or mechanical failure, this will cover your expenses. The reimbursement is designed to compensate for the cost of completing a trip or cruise that was missed.
For example, TravelSafe’s Classic package offers $2,500 after three hours of missed connections.
Flight cancellation travel insurance
Flight insurance typically covers missed connections due to weather-related flight disruptions. But, flight cancellations have become more common for a variety of reasons, so it may be prudent to invest in flight cancellation travel insurance.
Airline cancellation insurance may reimburse you for your lost deposits and other non-refundable trip costs if the reason for your cancellation is covered under the policy.
Insurance for travel delays
Travel delays have a negative impact on many vacationers. When a flight is delayed for reasons covered by your policy, such as bad weather or a mechanical failure, travel delay insurance may reimburse you for meals and lodging if you need to cancel or reschedule your trip. There is often a $150-$200 range for daily coverage.
For instance, after five hours of delay, the Secure Travels Voyager plan by Trawick International will pay out $150 per day, up to a maximum of $2,000.
In the event of a trip delay, you may be eligible to receive compensation for unused pre-paid and non-refundable trip charges, as well as reimbursement for any additional expenses incurred while trying to reach your destination or return home.
Insurance for luggage
If your bags get lost, stolen, or destroyed, you can get compensation from your travel insurance policy. Theft of baggage and other personal items may be covered by homeowners’ or renters’ insurance.
If your bag gets stolen, you can file a claim with your airline’s baggage insurance because the policy extends to cover your personal belongings. Note that the replacement cost of your belongings will not be covered by the baggage insurance policy, just the depreciated value. Exclusions and limitations also apply to a selection of products.
The HTH Global TripProtector Preferred Plan costs $400, the John Hancock Insurance Agency Gold Plan costs $500, and the Seven Corners RoundTrip Elite Plan costs $600 after a five-hour wait.
Here are some examples of luggage delay coverage provided by some of the finest travel insurance providers rated by Forbes Advisor:
After a five-hour wait, the HTH Worldwide TripProtector Preferred Plan costs $400; the John Hancock Insurance Agency Gold Plan costs $500; and the Seven Corners RoundTrip Elite Plan costs $600.
Trawick International Safe Travels Voyager plan costs $600 after a 10-hour delay; USI Affinity Travel Insurance Select Elite plan costs $500 after a five-hour delay.
Overall, travel insurance is a minor investment in comparison to the trip costs you can protect—especially when traveling is fraught with uncertainties and surprises.
What Does Travel Insurance Exclude?
In many cases, unforeseeable circumstances are not covered by travel insurance. It’s there in case something happens to your trip and you wind up losing money.
Cancellation benefits, for example, are only paid out if a trip is canceled due to an event specifically covered by the policy, such as a death in the family or a natural disaster. Hence, if you simply decide not to take your trip, you will not be eligible to file a claim under the terms of a standard trip cancellation insurance policy. For that, you’ll need coverage under the CFAR.
Because all travel insurance policies contain exclusions, you should read the small print of your policy and get acquainted with what your coverage does not cover.
Medical claims exclusions, for example, often include the following:
Treatment options that patients might choose for themselves Services in the field of mental health that are optional The practice of extreme sports and other adventurous activities Rehabilitation through Physical Methods Regular checkups at the doctor’s office and the dentist Pregnancy as usual
Also, unless you get travel insurance before the storm is named, most travel insurance plans would not cover your damages from a hurricane.
When Is Travel Insurance Beneficial?
In general, travel insurance is worthwhile to consider if:
Your journey expense is much more than you can afford to lose.
You are going overseas You are visiting a distant location with few close health care facilities
You are visiting a hurricane-prone nation.
You’ve arranged a lot of pre-paid, non-refundable excursions, day trips, and activities.
Your journey will include connecting flights or several locations.
You want to be paid for cancellations and medical concerns caused by Covid when traveling overseas.
You want to be compensated in part if you have to cancel your vacation or return home early for whatever reason.
When Is Travel Insurance Not Required?
If you are not putting down substantial non-refundable trip deposits or if your health plan covers you at your location, you normally do not need travel insurance.
On the other hand, if you’re only taking a cheap domestic trip, you might not need travel insurance at all. You generally won’t have many pre-paid, non-refundable costs if you’re going on a long weekend break with friends to see a show and do some shopping. Furthermore, your health insurance will cover any necessary medical care should you become ill or injured while visiting the United States. There may not be a need for a travel insurance policy if this happens.
If your credit card offers complimentary travel insurance, you may not need to purchase additional coverage. Be sure you have adequate travel coverage by contacting your credit card company before making any vacation plans.
Certain baggage insurance policies are secondary, meaning that you must first file a claim with your primary insurer (such as an airline or homeowners policy). You may not need to get additional baggage insurance if you are only bringing a few low-value items with you on a direct flight and are covered by your primary policy.
