What You Need to Know About Travel Insurance
More and more people are choosing travel insurance to protect against canceled and interrupted vacations, cover medical care abroad and even pay for lost baggage.
Americans spent $2.8 billion on all types of travel protection in 2016 (the most recent year for which figures are available), according to the U.S. Travel Insurance Association. That’s an increase of 19 percent from $2.3 billion two years before.
With the rise in adventure travel to exotic and remote locations, it’s understandable that people would want to protect themselves and their getaway.
If you’re planning to travel abroad or adventure travel, here is what you should know and consider about travel insurance.
What is Travel Insurance?
Travel insurance can protect against a lot that can go wrong with your vacation. Travel insurance generally is sold in packages, letting consumers pick and choose coverage.
The most popular form of travel insurance by far is trip cancellation or interruption policies, according to the Travel Insurance Association. In 2016, 87 percent of the policies sold covered these contingencies.
Other options include supplemental medical insurance while abroad. Travel insurance also can be acquired to cover an evacuation in the case of a medical emergency, civil unrest or a natural disaster.
Travelers can pick up policies to protect against costs incurred by lost or stolen baggage. Another common option is a policy for death or dismemberment.
The Travel Insurance Association reports that policies generally cost between 4 percent and 8 percent of the trip’s total cost. Insurance prices are based on the length of trip, destination and the policy holder’s age. Policies can be purchased through your insurance broker, travel agents, travel suppliers and booking sites.
Is it Right For You?
A growing number of people are choosing adventure travel, according to a 2018 survey of leisure-selling travel agents, of which 86 percent reported an uptick in adventure travel sales.
For people who are looking for thrills in their getaways, or seniors who are doing bucket-list trips to far-flung locations, it makes sense to consider these policies.
The Centers for Disease Control and Prevention recommends that travelers look into their health insurance coverage before they head out on an adventure trip. Many health plans do not cover medical care in foreign countries.
The agency also urges travelers to consider evacuation insurance, noting that emergency removals from remote areas can cost tens of thousands of dollars.
The Travel Insurance Association recommends asking these questions when you consider travel insurance:
- How much of a financial loss would it be for you to cancel a vacation at the last minute due to illness, weather or other unforeseen circumstances?
- If you have to cut your trip short because of an emergency, can you afford the cost of an airline ticket home?
- Does your health insurance cover you away from home and in foreign countries while traveling?
- If your bags are lost or you have to spend an extra night because of weather-related problems, can you afford to buy replacement necessities and pay for lodging?
For people who answer no to any of these questions, travel insurance may be the right choice.
Frequent travelers should consider an annual policy, the Travel Insurance Association suggests.
What Should You Ask?
If you’ve decided to add travel insurance, then you should be prepared to ask questions to make sure you get what you need. The Travel Insurance Association recommends comparing companies, policy coverage, benefits and prices.
Check your current health insurance and homeowners policies to determine your existing coverage. The association suggests you ask what is included and excluded with your travel policy.
Travelers should ask about special circumstances. For instance, are pre-existing medical conditions covered if there’s a complication while you’re away? If you’re on an adventure trip that includes bungee jumping, are sports-related injuries covered?
Does your travel insurance cover strikes, civil disturbances or terrorist acts? If you purchase travel insurance though a travel supplier or cruise line, are you covered if the company goes out of business?
If you purchase a policy for a cruise, does it cover the entire trip including airfare, hotel, shore excursions, sightseeing and pre- and post-touring?
Ask the travel insurance provider how to file a claim and the waiting period for reimbursement for lost baggage. Most travel insurance reimburses hotel accommodations, meal and incidental expenses if travel is delayed for six hours or more.
–Written by Jim Davis