What is Travel Insurance

Travel insurance is a type of insurance that protects you from financial losses and medical costs, or even death when you are traveling. The costs of traveling or even the risks associated with traveling can be significant and the consequences of not having insurance. Therefore, it is wise to invest in a good travel insurance plan, which can help you avoid financial losses when traveling.

Who Needs It

Anyone traveling outside of the country has good reason to purchase this insurance. Traveling is no longer limited to a brief vacation at the beach or a weekend trip to the mountains. Today, more people are traveling for their work and more extended periods. Therefore, any traveler can benefit from a good travel insurance plan.

Types

There are several different types of travel insurance plans. The type of plan that you choose will depend on your specific needs.

Loss of Luggage

If you are traveling by plane and your luggage is lost, you could end up paying for all of your essentials, like clothing and toiletries. A loss of luggage insurance plan would reimburse you for any lost items or stolen property.

Medical

A travel insurance plan that covers medical expenses is critical. Illness or injury can happen to anyone while traveling, and a good insurance plan will help you recover.

Unexpected Death

While some people may be able to prepare for the event of death adequately, you must have insurance in place if the worst should happen.

Flight Delays and Cancellations

While it is not the end of the world if your flight is delayed or canceled, it can be very inconvenient. If a flight is delayed or canceled, a good insurance plan will reimburse you for your ticket and other expenses.

Injury

If an illness or accident occurs, a good insurance plan will help pay for medical treatment. Also, if you are injured, the plan can cover lost wages or other costs related to not working.

Trip Interruption

If your trip is interrupted by a hurricane or other disaster, a good insurance plan will help you recover financially.

Ways of Purchasing

Your Bank

You can purchase this insurance from your bank, but it will not be a good deal for travelers because the insurance will not be that comprehensive. Therefore, you should weigh the benefits of buying your traveling insurance from a bank against the possible costs of not having insurance at all.

Online Brokers

This type of insurance can be purchased from online brokers for a fair price. However, some insurance companies may overestimate the trip’s costs, and your claim may be denied. For this reason, purchasing from online brokers can be risky.

Travel Agents

If you are traveling and do not know how to choose the right insurance plan, you can purchase it through a travel agent. The travel agent will have your best interests in mind and choose an appropriate plan for your trip.

What to Consider When Purchasing The Insurance

When planning your trip, you should always make sure that your insurance plan is adequate. Take the time to research the variety of available plans. In addition, be sure to consider the level of coverage you want with your plan and which provider is the best option for you. Before you purchase traveling insurance, you should read the contract carefully. In addition, make sure that you fully understand all of the terms and conditions listed in the contract before signing.

If you are traveling, it is good to purchase travel insurance as soon as possible. In addition to covering the cost of your trip, it will also cover you for unexpected situations that could arise.

I used to ponder this question every time I was about to book a flight, train, or hotel. Thanks to my Chase Sapphire Reserve card, I have built-in travel insurance reimbursement on any travel booked with the card. But before that lovely feature, I’d always agonize over the option to “protect my trip” in the final steps of booking.

After two years of a raging global pandemic, thousands of canceled flights, and millions of stranded passengers, the answer is: YES. Chances are, your trip is worth the insurance. But in case you need more convincing, here are five reasons why you should consider a travel insurance policy before heading out on your next adventure:

Reason 1: Vacations are Investments – Insure the Big Ones.

Let’s compare two trips:

Trip A: 

You’re taking a weeklong trip with friends to a ski resort a few states over. It’s about $8,000 total, but split across four people and several expense categories.

Trip B: 

You and your spouse are taking a luxury cruise around the cape of South Africa for your 10th anniversary. It’s $5,000, all-inclusive, and non-refundable.

The day before departure, you wake up sick. The PCR concludes: it’s COVID. You won’t be going anywhere, anytime soon.

So which trip would you rather have insured? Probably the second one. Although it’s the less expensive of the two, there’s rationale. For one, the money’s already spent. And past that, you have far fewer options for recourse since the sum was both nonrefundable and paid up-front.

When considering travel insurance, think about exactly how the trip is purchased. Since travel insurance works on a reimbursement basis, there’s more of an incentive to insure trips that hinge on significant nonrefundable expenses, like an overseas flight or a resort package.

Reason 2: Minor inconveniences Can Turn Into Major Expenses

A vacation isn’t just a financial investment. It’s an emotional investment, too. And when vacation begins with a canceled flight, a missed connection – the joy quickly turns to panic and rage, ruining a trip before it could even begin.

Travel insurance policies can soften the blow of these terrible but inevitable parts of traveling. They include reimbursements for lost prepaid expenses due to departure delays, cost of additional accommodation and travel expenses, and baggage delay benefits.

So, consider that hypothetical ski trip from earlier: what if a snowstorm delayed your flight by a day? Now, you’ve potentially lost a day of your lift ticket – worth up to $300 at some resorts. With a travel insurance plan, you could purchase a new ticket and submit the cost for reimbursement.

But there are other reasons to insure your trip beyond cost recovery. After all, skiing is risky. What if you got hurt? And what if you’re in the Swiss Alps, instead of the next state over?

Reason 3: Emergencies Happen

Medical emergencies overseas are enormously, devastatingly expensive. According to the U.S. State Department: “many foreign medical facilities and providers require cash payment upfront and do not accept U.S. insurance plans. Medicare does not provide coverage outside of the United States.”

It’s been a source of financial ruin for plenty of people. But travel insurance with emergency medical benefits can protect against the worst-case scenarios and expenses – covering emergency transportation, as well as medical evacuation/extraction costs for severe injury and illness. It can even pay your way through treatment, in advance, for particular covered emergency medical expenses. How’s that for peace of mind?

There are options, here. For example: if you’re spending a large portion of your year abroad – a Medigap plan would be a better option than travel insurance. But you should never travel far from home without first weighing the massive cost of a medical emergency overseas against the minuscule cost of travel insurance.

Reason 4: The Embassy Can’t Help You

Many traveling Americans have a woefully mistaken view of the U.S. embassy’s role in other countries. So much so that they assume the embassy performs almost the exact function of travel insurance, and will – at the first sign of trouble – call their local U.S. embassy for assistance they cannot provide.

They’re often disappointed by just how little the embassy staff can do for them.

Yes, an embassy can help you replace a stolen passport. Yes, you can contact friends, family, hospitals, legal counsel, and local law enforcement. But no, they cannot help you pay for any of it. Except in the case of rare, major catastrophes – it’s not a place you can stay overnight. The embassy is a glorified help desk, in your native language.

Reason 5: It’s Ridiculously, Stupidly Cheap

I know, I know. Cost is probably the reason most people don’t purchase travel insurance in the first place. And with the extra step of getting a quote, many people wonder: why bother? Especially when they’ve already spent thousands on the original vacation.

But as long as you’re looking at quality insurers with reputations for actually paying out claims, trust me: it’s worth it. I won’t go too far into detail since the price varies according to your demographic information. Still, for example: Allianz offers their OneTrip Emergency Medical plan for as low as $30 a week.

Now look me in the eye, and try to tell me that travel insurance isn’t worth the money!

It’s a simple fact. Please don’t get caught without it.

You Won’t Lose Your Investment

There are a number of things that can cause you to have to cancel your trip at the last minute. For example, you may get sick or experience a family emergency. There are many companies that won’t give you a refund if you cancel at the last minute. This means that you can potentially lose hundreds or thousands of dollars.

Travel insurance can help you tremendously in a situation like this. You can get reimbursed for the cost of your trip. However, it is important to note that your trip cancellation must be for a covered reason in order to get reimbursement. Examples of some of the covered reasons include serious injury or illness, a natural disaster, the death of a traveler and an event makes it impossible for you to get to your destination.

Pet Care

If you have to leave your pets in the care of someone else, then this can be covered by travel insurance. It can cover the cost of the cattery or kennel. If your pet happens to get hurt in the care of someone else, then the insurance may also cover that.

Medical Expense Coverage

You may end up getting sick or hurt on the trip and have to make a trip to the hospital. Even if you have health insurance, you may still be left with a hefty bill if you have to go to the hospital. It is common for people to end up with thousands in medical bills from one trip to the emergency.

There are also many medical facilities in other countries that require you to pay upfront. Additionally, there are some health insurance plans that do not cover you when you go out of the country. The good news is that if you have travel insurance, then it can cover the cost of your medical bills. Investing a small amount of money in insurance can potentially help prevent you from having a financial catastrophe.

Trip Disruption Coverage

Your trip may be disrupted by a number of things. This includes flight delays and bad weather. You may need to make other accommodations. You can reimbursed for the accommodations that you make because of trip disruption. Insurance can also cover your stolen luggage.

Alternative Transport Coverage

You may have to make other transportation arrangements. If you have travel insurance, then it can cover the alternative transportation costs.

It Is Affordable

If you were to ask people why they do not have travel insurance, then they would probably tell you that it is too expensive. However, that is a myth. Travel insurance can actually be affordable. You can compare a variety of rates in order to find something that fits your needs and budget. You can also speak with an insurance broker.

It is best for you to get several quotes. Pay attention to what type of coverage is included in the quote.

Not Many Other Options

If you don’t have travel insurance, then you don’t have many other options for getting reimbursed for the cost of your trip and unforeseen circumstances. Many people reach out to the United States embassy. However, there are limits on what they can do. They can help with things like contacting a family members and friends as well as getting legal assistance and medical care.

The embassy cannot help you get reimbursed for medical care or a cancelled trip.