Understanding Travel Insurance

Is traveling in your future?  Maybe a cruise or touring another country.  If so, have you given travel insurance a thought?  If you have, that’s great, but if you haven’t, then you might want to consider it, especially if traveling out of the county. In reading Understanding Travel Insurance, you’ll explore the options available and, in turn, you’ll become more knowledgeable in deciding if travel insurance would be cost-effective and beneficial for you. 

Travel insurance can cover a variety of issues that may arise on a trip.  There is travel medical insurance that deals with medical emergencies that come up unexpectedly.  There is catastrophic coverage to provide coverage if the insured passes away while traveling.  

Another type of travel insurance deals with annoyances such as lost luggage, canceled trips or interruptions, flight delays, personal effects, accidental death, and flight accident coverage. There are also travel insurance policies that provide 24/7 emergency services if you need help with such things as replacing a passport, rebooking a canceled flight, or even needing assistance with a cash wire transaction.  

Let’s take a closer look at these and some other options you’ll want to consider when shopping for travel insurance. Armed with this information, you will be able to make an informed decision on the type of medical insurance needed. 

Travel Medical Insurance

Travel medical insurance is for those times you find yourself suffering from a medical emergency or illness while traveling out of the country.  You may think that other countries have public health care either subsidized or free, which is true many do.  But, and this is huge, you are a visitor and won’t be deemed eligible. 

But that’s okay, you’re thinking, because you have phenomenal health care coverage or Medicare, and that will help.   Erroneous, most times, neither cover out of country medical expenses.  Without travel medical insurance, you could find yourself with a large bill for medical services rendered. Even though this holds true in most circumstances, your medical provider might be an exception.  So before purchasing any travel medical insurance, you want to call your provider and see if there is any coverage in foreign countries.  

So after calling your insurance provider and finding out you the news that you won’t be covered while out of the country, you still have options. This is where the benefits of travel medical insurance come into play. You’ll want to look at various travel policies and decide from a wide range of services and options the ones you want and need. 

Choose From Over 30 Travel Insurance Plans To Find Your Best Option

Medical Evacuation – Medevac/Medivac

What happens if you are traveling to a country or remote area that has sub-par medical facilities?  If you are traveling to such a place, there is something called medical evacuation insurance – you may have heard this referred to as medevac.  This type of insurance allows for transport from such an area to a higher quality hospital.  This type of transport can cost over $100,000, making evacuation insurance a viable option if traveling to a poor or remote area.  While considering the purchase of evacuation insurance, check that it includes coverage for a 24-hour physician support center. 

Medical Repatriation

Another option that goes hand in hand with medical evacuation insurance is medical repatriation.  This type of insurance covers flying you to your home country. However, be aware that most insurance companies have strict requirements on what is deemed necessary for medical repatriation. Again, be sure to ask questions and read the fine print before purchasing.

Activities

What about if you participate in some recreational activities such as skiing or hiking and injure yourself?  Many times injuries caused by these recreational activities will be covered; however, if you are participating in adventure sports such as skydiving or organized sports events or competitions, you probably won’t be covered with the “typical” travel medical insurance should you get injured.  However, it might be possible to buy an add on that would cover such activities. If you will be participating in any activities, read and ask what will be covered by the provider.

Accidental Death And Dismemberment Insurance

What about the worst-case scenario – you pass away in an accident or lose a limb.  This is where accidental death and dismemberment insurance would come in.  Dismemberment refers to such things as losing a limb, such as a hand, foot, arm.  If you already have life insurance, accidental death and dismemberment might be covered, and you wouldn’t need additional insurance. Check with your current provider and be prepared for any unforeseen circumstances.

Repatriation of Remains

What about a scenario we don’t want to imagine happening?  You pass away in a foreign county – how will your body be returned to your home country?  This is when the repatriation of remains coverage kicks in.  You may not have ever thought of the expense in this.  There could be post-mortem exams, transportation, and container.  Typically, this is found covered in your travel medical insurance policy.

Bedside Visit

Another scenario you may not have thought about is – what happens if you fall ill and end up in the hospital alone.  There is a benefit called bedside visit that pays for a family member to travel to you.  Also, depending on the policy, this can pay for the family members that traveled with you to return home.

Covid-19

A recent add on that you might want to purchase is in response to Covid-19.  This coverage provides the benefit of covering those medical expenses incurred should you become ill with COVID-19.

Flight Accident Coverage

Flight accident coverage will pay benefits if a disability, serious injury, or death occurs during flight. If the result is death, then benefits would be paid to your beneficiary. The type of flight usually included under this type of coverage are licensed commercial airliners. Some exclusions to this coverage can apply, such as drug overdoes or sickness.

Not Covered

Do keep in mind travel medical insurance does not usually pay for routine visits.  So be sure to get those all out of the way before your travels. Also, care for pre-existing conditions, giving birth, prenatal care, and prescription drugs probably will not be covered.

More often than not, if you have a pre-existing medical condition, it won’t be covered.  Some insurance companies will have a clause that you need to be symptom-free from a condition for a certain amount of time.  This is something that needs to be certified, not just based on your word.  So if you do have a pre-existing condition, be sure to find out what you need to be covered or if it can be covered at all.

Comprehensive Travel Insurance

Now let’s take a look at some options available on a comprehensive travel insurance policy.  This type of insurance is different from travel medical insurance.  Coverage may include trip cancellation, delay or interruption, lost baggage and personal items, rental car, 24 hours assistance, crisis response, and supplier default.

Trip Cancellation

Much as the name implies, trip cancellation covers reimbursement for prepaid, nonrefundable expenses.  Trip cancellation coverage will vary with providers. Not every reason for cancellation is accepted.  A few examples that are usually accepted are cancellations due to illness, a family member’s illness or death, natural disasters, and weather-related issues.

If you want to be sure you are covered for any cancellation, another policy type is called “cancel for any reason.”  As you can imagine, this type of policy carries a heftier price tag.  Also, note that a 100% refund is usually not offered, and time restraints may be listed. For instance, coverage might need to be bought within a specific time frame of the initial trip deposit.  Another time restraint might be that cancellation needs to be initiated a certain amount of time before the trip. Ask your provider or agent any questions, so you will fully be informed of what will be available to you should you cancel.

Trip Delay

Trip delay coverage kicks in if you incur expenses such as meals and hotels if, for some reason, your trip is delayed; for example, your flight gets delayed and canceled because of weather.

Trip Interruption

If your trip is interrupted for a reason outlined in your policy, then trip interruption coverage comes into play.  This will cover those non-refundable costs of the unused portion of your trip.

Baggage and Personal Belongings

We have all heard of those horror stories where the traveler arrives at their destination; however, their baggage and personal belongings do not. If this should happen to you and you have baggage and personal belongings coverage and your baggage is deemed lost, stolen, or damaged, you would get reimbursed. Some policies also will provide reimbursement for expenses incurred if your luggage is delayed for a certain period of time, for instance, 24 hours.

Having said this, some insurance policies will not pay out until all other avenues of reimbursement have been exhausted.  This includes but is not limited to homeowner/renters insurance, carrier and credit card reimbursements. 

What does this mean? For instance, many airlines and cruise lines will reimburse for lost or destroyed baggage, but there may be limitations on the amount.

Another example is homeowners/renters insurance.  Your policy may have coverage for loss of personal belongings. Review your homeowner’s policy to see if it does and be sure it meets the coverage needs for items you are taking with you.

Credit card companies might reimburse for some incidences if you used the credit card to pay.

After all reimbursement avenues have been exhausted, baggage and personal belongings insurance will take over, and your travel insurance provider will access your losses.

Rental Car

Most of the time, rental car coverage is something you can purchase for a comparable price through the rental car company.  But for peace of mind, you might want to do some research before leaving on your trip.  Your own car insurance company may cover you when renting cars on a trip.  Usually, however, U.S. car insurance policies don’t cover you when driving in other countries, except perhaps Canada.

Let’s suppose you are going to be renting a car and purchase rental car insurance. Be aware that this type of insurance usually pays for the repairs of the vehicle you are renting. Typically, it doesn’t include liability insurance.  This is something you should be concerned about. Without liability coverage, if you are at fault and held responsible for an accident, it won’t pay for damage to the other vehicle or the other party’s medical treatment, which could leave you with substantial bills. Be sure if you purchase rental car insurance to understand what is and is not covered and what you’ll need to buy to be fully protected.

You can find out more information about car insurance by researching automobile insurance requirements for the country or countries you will be visiting. You can find this information on the U.S. Embassy website.

24-Hour Assistance

With 24-hour assistance provided through insurance, help is just a phone call away.  Maybe you need help with a lost passport; you find yourself needing an attorney, or simply need help rebooking a flight.  If you find you do, that’s when you want to take advantage of the 24-hour assistance hotline.  The services covered under 24-hour assistance vary with each provider, so again be sure to ask what is provided if in case you need to utilize the service.

Crisis Response

Choose From Over 30 Travel Insurance Plans To Find Your Best Option

Crisis response is less known and probably not as popular as some other travel insurance options.  But it’s always good to be aware of your options.  

Crisis response coverage pays the costs of care you may need in unforeseen crisis circumstances. These include such events as natural disasters, kidnapping, political mayhem, and terrorist attacks.   Say, for instance, you are kidnapped – not likely, but it could happen – then crisis response coverage may pay for such things as a hostage mediator.  Again, it’s not a common occurrence but one you should be aware of when shopping for your travel insurance. 

Supplier Default

Supplier default is when the supplier, for instance, a cruise line or airline, stops operations because of financial issues. At that time, supplier default has occurred.  With coverage, you would be able to apply for reimbursement of non-refundable payments and deposits previously made.  

Miscellaneous

Animals

Animals or pets are not covered under travel insurance with one exception.  Some providers do provide policies that cover “service animals.”  What defines a service animal?  Under the Americans with Disabilities Act, a service animal is a dog that has “been trained to do work or perform tasks for an individual with a disability. The task(s) performed by the dog must be directly related to the person’s disability.

Beginning March 15, 2011, under titles II and III of the ADA, only dogs are recognized as service animals. Furthermore, animals such as emotional support or therapy animals do not fit under this definition.

Insured

The only person or people covered under your travel insurance policy are those that are named.  Some providers will cover children under the age of 17 free if they are traveling with a parent or grandparent.  Some plans cover entire households, but again, those individuals you want to be covered will need to be named.  

Cost

According to the U.S. Travel Insurance Association, the expected cost of travel medical insurance and a comprehensive plan is typically between 4% and 8% of the total trip cost.

Some of the factors that can influence price are: 

  1. The provider. 
  2. Length of the trip – the amount of time traveling – the longer you need coverage correlates with the price.
  3. The age of the person being insured. Usually, the cost gets higher as age increases. 
  4. The amount of coverage provided. Typically,  the more coverage, the higher the price. 
  5. Health care costs of the country you will be traveling to.
  6. Type of medical insurance required.  
  7. Deductible – Usually, the higher the deductible, the lower the cost.

Claims

Remember to take your insurance policies with you on your trip.  Be sure to have your policy number and phone number to the claims department. Ensure before leaving on your journey you’re confident of what is needed from you should you have to file a claim.

At the first sign that a claim may need to be filed, call your insurance provider and let them know.  Collect and save any documentation and receipts that will support your claim. Once you file your claim, a claims adjuster will access your claim and follow the steps necessary to address your concerns.  

Tips When Purchasing Travel Insurance of All Kinds

  • Research all the available resources you currently have for insurance before purchasing more.  Look at your homeowners/renters insurance. Does it cover personal items, and if so, are there limits or deductibles?  Will the coverage cross over to traveling?  Does your auto insurance cover you driving in foreign countries? Does your current medical insurance cover any expenses while traveling out of the country?  Does your credit card have any benefits for purchases made with them? The more information you have, the more informed your decisions will be while contemplating insurance plans. 
  • Get quotes from various providers.  Not only may the price be different, but the benefits and inclusions may be different as well.  Shop for what you need and see what extra services may come with it.  Don’t buy coverage you don’t need.  
  • Be sure you understand what is and is not covered by each of the providers you consider.  Ask questions, read the small print.  The more knowledge you have, the less chance of any surprises if you should need to use the insurance.
  • Buy travel insurance within the first week or two of the initial deposit.  Though you can purchase travel insurance up to the day you depart, many providers offer benefits if you do so earlier. 
  • Inquire if the provider offers a review period. A review period allows for the policy’s purchase with a clause allowing for a period of time to cancel and get a full refund.  The time frame is usually 10-15 days.
  • When traveling out of the country, there is a free registration website through the State Department to register your travel plans. By registering, you can receive information about the country’s safety conditions and provide information on how to reach you in case of an emergency.

Worth

You might be asking yourself if travel insurance of any kind is worth the price.  This is something each person needs to assess for themselves.  Are you able to suffer the financial implications of an unforeseen medical emergency?  Are you able to accommodate the financial loss of a canceled trip?  Are you traveling out of the country where your current provider may not cover medical services?

It is true having traveling insurance is a policy you may never use, and then yes, it is an added expense.  But is the added cost worth the peace of mind it will bring? That is a question you’ll have to examine and decide.

TermDefinition
24-hour Assistance ServicesUsually assistance through a phone call available 24/7. Can be for instances such as needing help with a loss passport, needing a doctor, rebooking a flight.
Accidental Death CoverageSimilar to life insurance. You name a beneficiary and if accidental death occurs the beneficiary receives a lump sum of money.
Baggage And Personal Belongings CoverageIf your baggage or personal items are lost, stolen, or damaged while on your trip, The Baggage and Personal Effects benefit can help cover the costs it takes to replace them.
Bedside Visit CoverageCovers the expenses for having a family member transported to the injured or ill insured during a medical emergency. 
Cancel For Any Reason CoverageAllows you to cancel your trip, whatever your reason may be, and receive a partial refund—usually 50% or 75% of the value of your prepaid and non-refundable expenses
Crisis Response
Coverage
In the event of kidnapping crisis response can provide coverage for ransom, personal belongings surrendered, and an experienced crisis response team to negotiate your release.
Designated BeneficiaryThe person named by the insured who will be entitled to receive benefits upon the death of the insured.
Dismemberment InsuranceProvides a benefit if a loss of limb occurs during a covered trip.
Flight Accident CoverageCoverage against any accident while on a licensed commercial flight during the coverage period.
Medical Evacuation
Coverage
Provides for medically necessary evacuation to a medical facility or medically equipped flights to return home.
Medical Repatriation
Coverage
Provides the necessary transportation home in the event a person passes away from an illness or injury.
Pre-existing Medical ConditionAny illness, disease, injury, or other condition that happens prior to a plan’s effective date and for which you experienced symptoms or sought treatment.
Rental Car InsuranceCovers you if your rental car is damaged in a collision, stolen, or vandalized. Usually only covers the rental car.
Service AnimalsAny dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability.
Supplier DefaultWhen a travel supplier completely ceases business operation due to financial circumstances. It is important to understand that it is not the same as bankruptcy.
Travel Medical InsuranceA type of insurance that covers the costs and losses associated with traveling. 
Trip Cancellation
Insurance
A trip cancellation policy will reimburse you for your prepaid, forfeited, and non-refundable costs if you are unable to take a trip due to an unforeseeable covered event.  
Trip Delay
Insurance
Provides reimbursement for additional transportation costs or additional expenses for meals and lodging should your flight be delayed by covered reasons.
Trip Interruption
Insurance
Provides reimbursement for prepaid and non-refundable trip payments if a portion of a trip is missed, or the traveler must return home early due to covered unforeseen circumstances, including illness, injury, or death.

As your contemplate travel insurance don’t forget about other documents that you should complete and update as well. To read more about those documents a previous post I wrote is 5 Legal Documents Everyone Should Have.

Read 5 Legal Documents Everyone Should Have

In reading Understanding Travel Insurance, I hope you better understand the options available and have become more knowledgeable in deciding if travel insurance is cost-effective and beneficial for you.

If you have experience traveling with or without travel insurance or have a travel story you want to share please comment below.

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