What Should You Look For in Travel Insurance in the USA and Abroad?

When is Trip Insurance a Good Idea?

What Should You Look For in Travel Insurance in the USA and Abroad?
April 21, 2014

According to the US Travel Insurance Association (USTIA), 17% of Americans reported that their travel plans were adversely impacted from storms and natural disasters, medical problems, or carrier-related issues. Of that group, only 22% had travel insurance to help them deal with the costs and aggravations of an impacted trip.

If you are debating whether you need travel insurance for your upcoming trip or family vacation, consider the following:

  • Overall Cost – A typical travel insurance bundle costs between 4-8% of the trip's cost. Is the extra expense worth it for the type of trip you are taking? If the trip is elaborate, expensive, and/or extensive, can you afford not to insure it?

  • Cost of Lodging/Supplies – Can you afford replacement supplies for lost or delayed baggage, and can you afford extra lodging if you or your baggage is delayed?

  • Cost of Return – Airline ticket change fees are significant these days. If your trip is cut short, can you afford the cost of booking or rebooking return flights for your entire travel party?

  • Medical Consequences – Does your current health care policy cover you overseas? Most provide only emergency coverage, if any. It probably will not cover things like evacuation if you cannot be properly treated at your destination.

  • Existing Coverage – Are any of your concerns covered by existing policies, or included in any package deal you are purchasing through a travel agent or tour operator? Check your policies in detail, and call your insurance provider if you are unsure.

If you are purchasing as part of a package, make sure you check out the insurer and that the company is reputable – and of course, verify what is and is not covered by the policy.

Most travel insurance is packaged as a bundle of services like these:

  • Trip Alteration or Cancellation – Covers delays, interruptions or cancellations due to situations like bad weather, illness, lost or delayed baggage, and similar situations out of your control.

  • Emergency Medical – Typically includes emergency medical service and evacuation. This is extremely important for overseas travel. Separate policies can be purchased that offer more extensive medical coverage.

  • Emergency Assistance Contact – 24-hour emergency assistance on anything from where to find a doctor to arranging last-minute accommodations to contacting your family in case of emergency.

  • Property Loss/Damage – Generally, this relates to baggage, but other coverage may apply.

You can buy travel insurance packages through airlines, hotels, travel agents, tour operators, insurance brokers, or online insurers. However, beware – there are many fly-by-night operators hawking so-called travel insurance that is substandard or non-existent. Check out your insurer in detail, and check the USTIA for membership and approved vendors.

Look out for tricky verbiage. For example, policies listed as travel protection without the word "insurance" may be from vendors who are not licensed to practice in your state, or may not even provide coverage at all. Also, watch out for trip cancellation waivers that provide credits instead of reimbursement.

Like any insurance policy, make sure you read the travel insurance policy fully and understand terms and conditions before signing, as well as how to use it. Multiple contact paths are useful, in case your phone does not work where you are traveling.

As with any insurance, you should buy travel insurance based on risk, the potential financial impact of mishaps, and how all this affects your peace of mind. Weigh the factors above, and if you decide it is right for you, be sure to choose a proven, reputable insurer for your traveling needs. Safe travels!

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