When it comes time to make plans for an upcoming trip, you surely want to focus on mapping out which attractions or historic places you’d like to see. Charting out the course of your travels can be incredibly exciting, as you can prioritize your interests and plan to check items off your bucket list in advance. What is far less exciting is dwelling on thoughts of the things that could possibly go wrong during your trip.
Depending on your travel needs and financial situation, you may be able to forego some vacation-related stress by purchasing travel insurance for your trip. The first steps toward determining whether travel insurance might be beneficial is understanding what it is and what events might be covered under your plan. By considering your financial situation and understanding potential risks native to your destination, you’ll be able to make an informed decision on whether or not to purchase travel insurance.
What is Travel Insurance?
Travel insurance is a form of optional coverage designed to protect you from financial losses or foreseeable risks during travel. Your travel insurance might shield you from the financial consequences of missing a flight or cover a significant portion of your medical bills if you are unlucky enough to suffer a serious injury abroad. Before purchasing a travel insurance plan, it’s vital to understand which situations are and are not covered, so you can make the best decision as to whether your needs are adequately met under a specific coverage.
What Situations Are Covered Under Travel Insurance?
Most travel insurance plans offer a range of protections over the duration of your trip. A typical plan may cover baggage loss or delays, medical care for serious injuries, trip cancellations, and even some of the costs of a delayed flight. We’ll take a closer look at some of the situations that may be covered in the following sections.
Illnesses or Injuries
Nothing ruins a vacation quite so thoroughly as a serious injury or illness. In addition to potentially having life-changing consequences, an injury may also lead to a legal headache as you attempt to figure out who’s responsible for paying for your medical care. Travel insurance may be useful if you or a loved one suffer harm while abroad, as the coverage may protect you from some medical expenses that your regular health insurance wouldn’t cover.
Many health insurance plans do not offer full coverage in foreign countries and some may have no coverage at all. Travel insurance can supplement your existing medical coverage in an emergency, if your plan does offer some level of coverage while vacationing.
Lost or Delayed Baggage
If your baggage is lost or delayed enroute to your destination, travel insurance can help you recover some of the costs of replacing your items. It can be quite difficult to get an airline to provide compensation for lost baggage. Most airlines are legally obligated to compensate travelers for lost, delayed, or damaged baggage. However, in order to receive compensation, passengers must show receipts that prove the value of their lost possessions. Additionally, airlines may require that a claim is filed in as little as twenty-one days after the incident.
If you anticipate needing to cancel a trip at the last minute for any reason, purchasing travel insurance may be a wise choice. Most cruise lines and resorts will not offer a full refund if you cancel your trip, even if you have a very good reason for withdrawing your travel plans.
If you cancel at least two weeks in advance of your trip, you will likely be charged a cancellation fee. You may also only secure a partial refund or receive credit towards a future trip. Should you cancel with less than two weeks before your trip, you may not receive a refund at all. Travel insurance can keep you from taking a significant financial loss should your plans fall through.
Some credit cards may offer some form of cancellation/interruption coverage. Trip cancellation coverage reimburses you for non-refundable travel expenses covered under insurance should you cancel your trip entirely. Trip interruption insurance covers the unused portion of your trip if an unexpected situation forces you to cut your vacation short.
If your credit card offers cancellation or interruption coverage, it’s important to check the annual limits included in the card’s terms. You may find that your credit card would only cover a small portion of your non-refundable expenses, should your travel plans unexpectedly change. Additionally, most credit cards do not offer coverage for medical care or emergency evacuations, both of which may be covered under travel insurance.
Are There Situations That Travel Insurance Won’t Cover?
While travel insurance can be incredibly useful and may save you a significant sum of money under the right conditions, not all travel-related emergencies are covered under every plan.
- Pre-existing medical conditions: If you have a pre-existing medical condition, be sure to select a travel insurance plan that offers a pre-existing condition waiver. You want to be certain that any medical expenses occurring as a result of your pre-existing condition are covered.
- Political unrest: When visiting an area with known political unrest, check what cancellation coverage your travel insurance offers.
- Tour operator defaults: Travel insurance generally covers some cases of tour operator defaults arising from monetary problems. Be sure to verify how tour operator defaults are handled through your travel insurance policy before finalizing your arrangements.
Potential Costs of Travel Insurance
There is no set cost for travel insurance. The amount you will pay depends on the price of your vacation and your age. Younger travelers can generally expect to pay the lowest rates for travel insurance, perhaps adding between 3% to 5% to their vacation’s total cost. While this may seem like a substantial investment, travel insurance can efficiently protect a traveler’s wallet in the event of an emergency or cancellation.
Types of Travel Insurance
To get the most value out of your travel insurance coverage, think about the reasons you might need to cancel your trip. Is the area you’re traveling to known for severe seasonal weather? Are you unsettled by political unrest in the region? Could school or work get in the way of your travel plans? These are all perfectly reasonable concerns that may lead to a trip becoming unviable in the future. However, not all travel insurance will cover issues like these. You might consider a plan that provides:
- Cancellations for any reason, albeit within a specified timeframe
- Comprehensive travel insurance
- The ability to change your travel insurance coverage if you feel it doesn’t suit your needs
Protecting Your Peace of Mind & Pocketbook With Travel Insurance
Travel insurance may not be necessary for every vacation, but it’s certainly worth considering the pros and cons of purchasing a plan before your next trip. While it may tack some additional costs onto your vacation, travel insurance can potentially save you hundreds or even thousands of dollars if your plans fall through or you suffer an unfortunate injury whilst abroad. We hope you enjoy safe travels in 2023 and beyond!