Travel Insurance: Why You Need It and How to Choose
Travel insurance might seem like an unnecessary expense, but it's one of the most important investments you can make for your trip. Here's everything you need to know about travel insurance and how to choose the right policy.
Why Travel Insurance is Essential
Medical Emergencies Abroad
The Reality: Medical care abroad can be extremely expensive. A simple hospital visit can cost thousands, and serious emergencies can reach hundreds of thousands of dollars.
Your Health Insurance: Most domestic health insurance doesn't cover international travel, or coverage is very limited. Medicare doesn't cover care outside the U.S. at all.
Evacuation Costs: Medical evacuation can cost $50,000 to $150,000 or more. Without insurance, you're responsible for these costs.
Trip Cancellation and Interruption
Unexpected Events: Illness, family emergencies, natural disasters, or other unforeseen events can force you to cancel or cut short your trip.
Non-Refundable Costs: Flights, hotels, and tours are often non-refundable. Travel insurance can reimburse these costs.
Peace of Mind: Knowing you're protected allows you to book trips with confidence.
Other Important Coverages
Lost or Delayed Luggage: Airlines have limited liability. Travel insurance can cover the full value of lost items.
Travel Delays: Coverage for additional accommodation and meals if your trip is delayed.
Emergency Assistance: 24/7 assistance services help with medical referrals, translation services, and emergency coordination.
Types of Travel Insurance
Comprehensive Travel Insurance
What It Covers: Medical expenses, trip cancellation/interruption, baggage loss, travel delays, and emergency evacuation.
Best For: Most travelers, especially those traveling internationally or on expensive trips.
Cost: Typically 4-10% of your trip cost.
Medical-Only Insurance
What It Covers: Medical expenses and emergency evacuation only.
Best For: Travelers who have trip cancellation coverage through credit cards or can afford to lose trip costs.
Cost: Usually $50-200 per trip, depending on age and destination.
Evacuation-Only Insurance
What It Covers: Emergency medical evacuation only.
Best For: Travelers going to remote areas or those with existing medical coverage abroad.
Cost: Usually $50-150 per trip.
Annual/Multi-Trip Insurance
What It Covers: Coverage for multiple trips within a year.
Best For: Frequent travelers who take several trips per year.
Cost: Usually $200-500 per year.
What to Look for in a Policy
Medical Coverage
Coverage Amount: Look for at least $100,000 in medical coverage, preferably $250,000 or more.
Pre-Existing Conditions: Some policies exclude pre-existing conditions. Look for waivers if you have health issues.
Emergency Evacuation: Should cover evacuation to your home country, not just to the nearest adequate facility.
Repatriation: Coverage to return your remains home in case of death.
Trip Cancellation/Interruption
Covered Reasons: Understand what reasons are covered. "Cancel for any reason" coverage costs more but offers maximum flexibility.
Coverage Amount: Should cover your total prepaid, non-refundable trip costs.
Time Limits: Some policies require purchase within a certain time of initial trip deposit.
Other Important Coverages
Baggage Loss/Damage: Coverage for lost, stolen, or damaged luggage and personal items.
Travel Delays: Coverage for additional expenses if your trip is delayed.
Missed Connections: Coverage if you miss connections due to delays.
Adventure Activities: If you plan adventure activities, ensure they're covered. Many policies exclude extreme sports.
How to Choose the Right Policy
Assess Your Needs
Trip Cost: Higher trip costs mean more to protect. More expensive trips justify more comprehensive coverage.
Destination: Some destinations have higher medical costs or greater risks. More remote destinations may require evacuation coverage.
Activities: If you plan adventure activities, ensure they're covered.
Health: Consider your health and any pre-existing conditions.
Existing Coverage: Check what coverage you might already have through credit cards or other insurance.
Compare Policies
Use Comparison Sites: Websites like Squaremouth, InsureMyTrip, or TravelInsurance.com allow you to compare multiple policies.
Read Reviews: Check customer reviews and ratings for insurance companies.
Understand Exclusions: Read the fine print to understand what's not covered.
Check Ratings: Look for companies rated A or higher by rating agencies like A.M. Best.
Key Questions to Ask
- What's the maximum coverage amount?
- Are pre-existing conditions covered?
- What adventure activities are excluded?
- What's the claims process?
- Is there 24/7 emergency assistance?
- What's the deductible?
- Are there age limits?
Common Exclusions
What's Typically Not Covered
Pre-Existing Conditions: Unless you purchase a waiver, conditions you had before buying insurance usually aren't covered.
Extreme Sports: Activities like skydiving, bungee jumping, or mountaineering may be excluded.
Alcohol/Drugs: Injuries or incidents related to alcohol or drug use typically aren't covered.
War/Terrorism: Coverage varies. Some policies exclude these entirely.
High-Risk Destinations: Travel to countries with travel warnings may not be covered.
Mental Health: Many policies have limited or no mental health coverage.
When to Buy Travel Insurance
Timing Matters
As Soon as You Book: Buy insurance soon after making your first trip deposit. This ensures coverage for pre-existing conditions (if waiver is purchased) and maximizes cancellation coverage.
Before Final Payment: At minimum, purchase before making final payments on your trip.
Don't Wait: Waiting until right before travel may limit your options and coverage.
Making a Claim
Documentation
Keep Everything: Receipts, medical records, police reports, and any other documentation related to your claim.
File Promptly: Most policies require filing claims within a certain timeframe, often 90 days.
Be Thorough: Provide all requested documentation and be detailed in your claim description.
Common Claim Issues
Incomplete Documentation: Missing paperwork is the most common reason for claim denials.
Exclusions: Claims denied because the situation falls under policy exclusions.
Timing: Filing claims too late or for events that occurred before coverage started.
Credit Card Travel Insurance
What Many Cards Offer
Trip Cancellation: Some premium cards offer trip cancellation coverage.
Baggage Delay: Coverage for expenses if baggage is delayed.
Travel Accident: Limited coverage for accidents while traveling.
Limitations: Coverage is usually limited and may not be sufficient for serious situations.
When It's Not Enough
Medical Coverage: Most credit card insurance doesn't cover medical expenses abroad.
Coverage Limits: Limits are often lower than standalone policies.
Restrictions: More restrictions and exclusions than comprehensive policies.
Special Considerations
Adventure Travel
Specialized Policies: If you plan extreme activities, look for specialized adventure travel insurance.
Higher Premiums: Expect to pay more for coverage of high-risk activities.
Read Carefully: Understand exactly what activities are covered.
Long-Term Travel
Extended Policies: Look for policies designed for long-term or extended travel.
Coverage Limits: Some policies have maximum trip length limits.
Renewal Options: Check if policies can be renewed if you extend your trip.
Senior Travelers
Age Limits: Some policies have age limits or charge higher premiums for older travelers.
Specialized Policies: Look for policies designed for senior travelers.
Pre-Existing Conditions: Especially important to understand coverage for pre-existing conditions.
Travel insurance is not just about protecting your investment—it's about protecting yourself. Medical emergencies abroad can be financially devastating. The relatively small cost of travel insurance provides peace of mind and financial protection that's invaluable when you need it most.