You’ve been planning your holiday trip for what seems like forever. You’ve diligently put aside a chunk of every paycheck. You’ve read a dozen guidebooks and asked all the right questions. You’ve maybe even been practicing another language all year to communicate better with the local community of your destination! You’ve imagined a perfect adventure, complete with all the cool spots you’ve been reading about. What could possibly go wrong, right?
The travel insurance industry was invented more than 150 years ago to respond to that very question. Today, travel insurance companies protect travelers against a wide range of mishaps that could derail their plans.
With the Covid-19 pandemic still ongoing, record numbers of flights, vacation rentals, cruises, and other travel plans have been thrown into disarray. While the response from individual airlines and hotel chains has been to ease up their cancellation policies, travel insurance companies are a different story.
Now the question is, does travel insurance make sense for you? That depends, if you’re someone who likes to play it safe and avoid mishaps (especially in your wallet), travel insurance can offer important benefits—not to mention peace of mind. Travel insurance premiums represent a small percentage of the cost of your trip and could save you hundreds if not thousands of dollars in the event you need to make a claim.
Just as you would when purchasing home insurance, we’ll take the time to get several quotes when selecting a travel insurance company for you. Each company offers its own individual types and combinations of coverage, so we’ll take the time to help you with the different benefits available.
Let’s say you’ve already arrived at your destination and a phone call from home alerts you to an emergency. If you’re carrying trip interruption insurance, you’ll be reimbursed for the expenses of traveling home and resuming your trip once you are able.
Cancellation coverage, as its name suggests, kicks in when you need to cancel your trip for such reasons as sudden illness, family emergencies, and natural disasters (either where you live or in your destination). It reimburses you for non-refundable expenses, including airfare, which often represents a significant portion of the cost of your trip.
The most comprehensive protection you can buy is Cancel For Any Reason coverage. CFAR policies are sold as add-ons to standard cancellation coverage. If a week before your trip, your boss casually informs you that you have to show up for a make-or-break presentation during the time you had planned to travel, you can make the presentation and still recoup a portion of your non-refundable travel expenses. Usually, CFAR policies do not reimburse you for all of your expenses; 50% to 70% is more common. CFAR makes sense for travelers whose schedules are very unpredictable or those who need the ultimate in flexibility.
Some of the most common misadventures travelers face are falling ill or getting hurt while abroad. That’s why medical insurance is the most essential travel coverage to carry. Chances are, your current health insurance policy only offers limited coverage outside the US—and some policies exclude it altogether. Medicare is one such policy, so for seniors, medical insurance is an absolute necessity. Travel medical insurance will reimburse you for evaluation, treatment, and transportation by ambulance no matter where you choose to go for health care. Incidentally, accidental death and dismemberment coverage—we know, nobody likes to think about the worst when planning a trip!—is also included in most travel medical policies.
Most seasoned travelers have come up against the challenge of lost, stolen, damaged, or delayed luggage. It’s not such a big deal when you’re traveling stateside to visit family, but it can really put a damper on an international trip when you’d rather be doing anything but shopping for replacement toiletries. Baggage coverage can compensate you for the headaches associated with baggage mishaps, but be sure to understand the limits of any policy you purchase. You may want to increase your coverage limits to be sure you’ll be adequately reimbursed for electronics and other high-ticket items like cameras and computers.
You may want to purchase specialized event coverage that reimburses you the cost of high-cost tickets if you were looking to attend a huge event during your travels. You may also want to check out your credit card perks, a lot of times they might have some coverage for you as well.
Here’s a tip for cost-conscious travelers—and that includes pretty much most of us, doesn’t it? If you’re traveling with friends or family, consider a group plan. Under group coverage, travelers share the cost of a single policy, which typically reduces the amount anyone traveler has to pay for protection. The money you save could buy you some extra souvenirs.
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For more information, see also https://www.marketwatch.com/guides/insurance-services/trip-cancellation-compensation/