10 Things to Know About Travel Insurance

Travel insurance is one of those things that frugal people are divided on. As is the case with many types of insurance, some people argue that it’s worth the cost it saves you down the line and others say that it’s a waste of money. That’s something that you really need to decide for yourself. It helps to know what you’re dealing with. Following you’ll find ten important things to know about travel insurance to aid you in making a decision about this issue.

Photo: Dbi90
  1. Good travel insurance pays for trip problems, emergency issues on the road and even medical payments that come up. For travel insurance to be worth it, it needs to cover a diverse range of expenses that might come up when you travel. The very basic thing that it should cover is reimbursement of the amount you spent on the trip in case the trip is canceled or cut short. However, it should also cover 24-hour roadside assistance during the trip, reimbursement for unexpected trip expenses that arise during your travels and some medical coverage such as emergency medical transportation and care. Other things that may be covered include lost baggage, emergency dental care and the cost of transporting your personal vehicle home if you took it on the trip and an emergency prevents you from taking it back yourself.
  2. Travel insurance can be a substitute for car rental insurance. Many types of travel insurance cover issues related to the loss or damage of a rental car. That means that if you do decide to get travel insurance then you may not need to get car rental insurance. Knowing this can help you save money.
  3. Tragic flight accidents may result in travel insurance benefits. We all hope that we’ll never be inside of a plane that crashes. If you do, however, then your travel insurance can become useful. It can serve as a type of disability insurance if you lose your sight, limbs, etc. It can also serve as a type of life insurance that benefits your loved ones if you die in a plane crash.
  4. You can choose a plan that will let you select your medical care provider. If you’re traveling to a destination where you may not find the most up-to-date medical care then you want to look for a trip insurance plan that doesn’t select the hospital for you but instead lets you choose your own provider. If the plan says that you must go to the “nearest hospital” then be wary because the nearest hospital in a developing nation may not be what you want in an emergency. Look instead for medical evacuations that give you some choice and control.
  5. It’s best to get your trip insurance within two weeks of paying your trip deposit. In most cases, you are actually allowed to buy travel insurance as close to the date of travel as the day before you leave. However, you often get the best coverage if you buy the insurance within the week or two after paying your deposit. For example, if you have a pre-existing condition that you want covered in this insurance then you usually have to get the insurance soon after booking the trip.
  6. You may not get all of your money back when you cancel a trip. Most travel insurance offers you a full refund of your money if you cancel a trip for very specific reasons such as needing to appear for jury duty or having your destination receive a terrorist warning. If you cancel for a random reason then you may not get the full amount back. You can buy better insurance that allows you to cancel for virtually any reason but of course it’s going to cost you more.
  7. Your electronics items may not be fully covered. If you’re someone who takes a lot of pricey gadgets on the road with you then you may want to consider some type of personal property insurance instead of travel insurance. That’s because nearly all policies limit the reimbursement of electronics to $500. Unless you’ve got a cheap laptop, that’s probably not going to help you out if it does get stolen during your trip.
  8. Travel insurance can be smart if you’re working with a supplier that may go out of business. You can sometimes get great travel deals by working with companies that are on the verge of collapse. However, you’re risking the chance that the company will go out of business before you take your trip. Travel insurance that covers supplier default will allow you to take advantage of these deals while protecting you in case the company goes belly up.
  9. You can search for trip insurance through search engines. You don’t have to check out every single site for the best deal. There are travel search engines that can help you narrow down your options. For example, InsureMyTrip.com offers plans and packages from nearly twenty different insurance providers.
  10. You may or may not have to pay a deductible. As with other types of insurance, the deductible amount may affect the price of the insurance.

So what do you think? Is travel insurance something that’s worth the cost or is it just a financial waste?

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Comments

  1. says

    To be honest I do not travel all that much and have not bought travel insurance before. I think it would depend on how often you travel, as the likelihood of needing travel insurance increases the more times you travel.

    It is probably one of those things that when you do need it, you think it was the best investment of your life, but when you dont need it, you tend to think “it will never happen to me”.

  2. says

    @ Dd … I do think you’re right that it’s like with most other types of insurance where you are glad that you had it when you needed it but often wonder if the expense is worth it otherwise.

    I think that the frequency of travel may matter but it also matters where you are going and what the circumstances are. For example, if you buy a ticket for a destination wedding for a couple that you believe in your heart may call off the wedding then it may be worth it to get trip insurance.

  3. KarenJ says

    Most insurance is based upon things that “might” happen but probably never will. It’s a great racket. I would never pay for travel insurance. The chances of having a travel related loss are too slim. I’ve been going away regularly once or twice a year for a week since 1999, most times I’ve flown on an airplane. I’ve NEVER bought nor needed travel insurance.

  4. says

    @KarenJ … You make a good point. I’m curious, though, were your trips very solid in their plans? There are a lot of times when the plans that you make may be unsure for various reasons and if the plans end up getting canceled then the insurance can be valuable. It’s definitely a mixed bag but I think it’s important to have all of the information before you make a final decision.

  5. says

    Good post, Kathryn. I think frequency of travel and the surrounding circumstances should definitely play a part in choosing whether travel insurance is a valuable or wasteful expense.

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