It’s a good idea to buy travel insurance before a trip in case something unexpected happens (although it’s not always necessary). But there are so many different kinds it can be difficult to figure out which travel insurance best suits your needs.
In this post, I’ll go through the main types of travel insurance to help you make an informed decision.
What does travel insurance cover?
Travel insurance protects you in case something unexpected happens during a trip, for example:
- your grandmother suddenly falls ill and you have to fly home early.
- the airline loses your luggage and takes several days to get it back to you, leaving you with no clothes, toiletries, and other essentials in the meantime.
- your budget airline goes out of business.
- you crash into someone while skiing and you’re liable for his treatment expenses.
- you get sick or get into an accident and require immediate medical attention, but the hospital wants you to pay upfront before giving you any treatment.
Which travel insurance to buy?
Travel insurance covers a few different things. Usually, travel insurance is sold as a combined package. You may be able to request coverage for a specific thing, but it often comes in a package together with other kinds of coverage as well.
Firstly, you should decide which travel insurance coverage you need. Then, find the package that best meets your needs.
Travel medical insurance
What can go wrong
30% to 50% of travelers will fall ill or become injured during their trip, according to Allianz. So if you’re wondering which travel insurance you’d definitely need, consider travel medical insurance.
Not having medical insurance when you desperately need treatment can easily turn into a nightmare.
Depending on the country and hospital, you may be asked to pay upfront before they provide any treatment. If you have no money and you don’t even speak the language, well, let’s just say the outcome wouldn’t be very good for you.
How travel insurance can help
Travel medical insurance covers the cost of treating illnesses, injuries, and accidents. It also usually covers dental emergencies.
The insurance company can pay your medical bills and make sure you’re treated fairly. For emergency situations, your insurer can usually work things out directly with the hospital on your behalf.
Emergency medical insurance usually provides coverage for $10,000 to $50,000.
Medical evacuation insurance
What can go wrong
You may find yourself injured in the middle of a rainforest or on a ski slope on top of a mountain. How will you reach a medical facility?
This is where medical evacuation insurance comes in. You may need it if you plan to visit a remote area with little medical resources.
How travel insurance can help
Medical evacuation and repatriation insurance covers the cost of transporting you to a place where you can get medical treatment, like the nearest hospital or even back to your home country in serious cases.
Most insurers would fly you to a medical facility and doctor of their choice. Some insurance companies, like Travel Guard and Medjet assist, would let you choose the medical facility and doctor yourself.
Most policies also cover repatriation of remains or funeral expenses abroad if — as difficult as it is to imagine — you die during the trip.
Trip cancellation insurance
What can go wrong
You may find yourself in an unexpected situation where you have to cancel the trip or end it early. For example, you may have lost your job, you may fall ill, or there may be death in the family.
How travel insurance can help
If you interrupt or cancel your trip, you could get reimbursement from your travel insurance company for any portion of the trip you have to forfeit.
For example, if you’ve paid upfront for a luxury trip, it would suck to not be able to go and yet still have to lose the money. A reimbursement would at least allow you to reschedule the trip for a later date.
In case of terrorism, you may get reimbursement for cancellation if the act of terrorism happens in a country you’re traveling to or from. The insurer may set boundaries on how close the attack has to be to your location for you to get a payout.
The fine print usually specifies acceptable causes for cancellation. You’ll need to provide some proof that you’re not just cancelling because you don’t feel like going anymore.
The higher the insurance premium, the more causes of cancellation are covered. But if these events are really unlikely, you may be better off without that particular coverage.
You may already have limited coverage from the airline or from your credit card company. Check out the following blog post for more details: 7 Sources of Free Travel Insurance You May Already Have.
Tip: You should purchase an insurance policy as soon as you’ve paid for your travel bookings because the insurer may have cutoff dates for certain incidents. If you buy the insurance after the cutoff date, you may not be covered in case the airline goes bankrupt before your scheduled flight, for example. Buy travel cancellation insurance earlier — you’ll be covered for a longer time.
Baggage insurance
What can go wrong
If the airline loses your luggage, it could take days for it to find its way back to you. Meanwhile, you don’t have your clothes, toiletries, and gadgets with you.
Or maybe you lose your stuff some other way, like theft.
How travel insurance can help
Travel insurance covers your expenses in case your stuff gets damaged, lost, or stolen. Most baggage insurance policies include almost everything in your bags, but check the fine print.
There’s usually a maximum limit on the amount of reimbursement, especially when it comes to big-ticket items like gadgets, jewelry, and sports equipment. If you want those valuables insured, you may have to get extra coverage specifically for them. And if you travel a lot, it may be a good idea to forgo standard baggage insurance and instead get a “floater” policy that provides international coverage.
Most policies provide about $500 coverage for lost baggage and $100-$300 for delayed baggage.
The airline may already provide some protection for lost luggage. You may also already have some coverage from you homeowners or renters insurance.
(Read: 7 Sources of Free Travel Insurance You May Already Have)
Despite having insurance, you should still take safety precautions. Most insurers expect you to take “reasonable care” of your stuff and won’t cover any loss if they decide that you lost it due to your own “negligence”.
Don’t leave your valuables lying around in your hostel dorm where you can’t see them. Don’t take your valuables with you unless necessary. And get bags with safety features like Pacsafe or padlocks.
Flight delay insurance
What can go wrong
Your trip could be delayed or cancelled because of a natural disaster, illness, or even the airline going out of business.
How travel insurance can help
If a delay lasts for more than 12 hours, you may be able to get compensation from your insurer. Just remember to get written confirmation of the delay from the airline. And keep receipts of anything you have to purchase while waiting, like food and drink.
So…which travel insurance?
It’s up to you, really. I can’t point at one policy and tell you to get that one because everyone’s needs vary.
In my opinion, the items listed above are the essential kinds of travel coverage to keep in mind when you decide which travel insurance to buy. When you shop for a policy, check that they cover the items you want.
One great option for travel insurance is World Nomads, which is endorsed by National Geographic and Lonely Planet. Use the form below to instantly get a price estimate for your next trip:
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