Travel Insurance: What You Need to Know
Travel insurance is like other insurance: it reimburses you if the unexpected occurs.
Talk to your insurance agent about what areas are covered under your current homeowners (or other insurance) policy before purchasing travel insurance.
Here are some questions to get you started.
1. What is Travel Insurance?
Travel insurance is similar to homeowner's or car insurance. If a hurricane or blizzard prevents your trip from happening, you get sick while traveling, or any other mishaps occur, you may be partially reimbursed for certain areas of your trip.
2. Should I Buy Travel Insurance?
It's a good choice for: those with medical problems, senior citizens, expensive, multi-leg journeys or travel to high-risk areas.
3. What Is Covered?
Insurance policies vary so read your policy and talk with your agent about the specifics – what's covered, how much is covered and what's not.
WHN Tip: Is My Underwear Covered?
Your luggage and its contents may fall under your homeowner's or renter's insurance policy. Talk with your agent about your homeowner or renter's policy to see what is covered before purchasing travel insurance.
4. What is Trip Cancellation/Interruption Insurance?
This is the main clause in any travel insurance policy. It covers you in case something unforeseen causes a delay or cancellation in your plans. Coverage may include:
- Events like terrorism, or natural disasters or weather-related issues
- Suppliers declaring bankruptcy
- An illness (yours or family member's) that forces you to cancel your trip or return unexpectedly
- Home emergency (burglary, fire, natural disaster) making it uninhabitable
WHN Tip: Define "Bad Weather"
Ask your travel insurance agent what "bad weather" means: drizzle or downpours, snowflakes or blizzards?
Additional Coverage Options
Your policy may include the following. If not, ask your agent about additional riders.
WHN Tip: Primary and Secondary
Ask about primary and secondary coverage. For instance, you might have medical coverage on your travel insurance, but you'll need to file a claim with your medical insurance first before receiving funds from your travel insurance. That's considered secondary coverage.
Emergency Medical Care Abroad
Unfortunately, your U.S. health insurance here may not cover you overseas. For example, Medicare does not cover health care expenses outside of the United States. Check with your health insurance company and then consider adding additional coverage in case of illness or injury.
WHN Tip: Be sure to ask your travel insurance agent what "ill" or "injured" means. Does it mean a cold, flu or surgery? A broken leg or worse?
If there are no local doctors or medical services available at your current location, travel insurance will cover some or all of the costs necessary to transport you to available care.
Most travel-insurance policies exclude coverage for pre-existing medical conditions that may flare up on your trip. But many also will waive the exclusion if you buy your policy within a specified number of days after making your first trip payment.
This coverage reimburses you for lost, stolen, or damaged bags. Make a list of everything in your bag (hint: take photos, too). If your bag is lost, you may be reimbursed for some contents, but not all. Exclusions might include sunglasses, antiques and collector's items, contact lenses, prescription medication, cash, charge cards, tickets, and travel documents.
WHN Tip: Ask your homeowner's insurance agent if this is covered under your homeowner's insurance policy before purchasing additional coverage for lost baggage.
Travel insurance can also cover expenditures incurred as a result of identity theft, passport theft, luggage theft and ticket theft.
Travel insurance can assist you if legal problems arise while traveling. Your travel insurance company might also have a network of lawyers available for consultations, if needed.
What Isn't Covered?
It depends on your policy but usually policies only pay out for "covered" events, which will vary by company. Talk with your insurance agent about what isn't covered.
How Much Does Travel Insurance Cost?
According to the U.S. Travel Insurance Association, travel insurance policy costs will vary depending on your trip costs, your age and the amount of coverage in your policy. But most policies range between 4-8 percent of the total trip price.
When can I buy travel insurance?
Buy it when you book your trip if possible — you might get a discount or additional coverage if you purchase it as part of a travel package. Pre-existing conditions might also be waived at that time. Also, you can buy insurance for just one journey or purchase year-long coverage.
Where can I buy travel insurance?
You can buy travel insurance through travel agents, tour operators, travel insurance agents or other vendors.
Read your policy carefully.
Start a "travel insurance" folder for your trip for copies of:
Contact details for your travel insurance agent and company
Contact info for your medical and homeowner's insurance agents as well
Ask your travel insurance and homeowner's or renter's insurance agents about specific instructions on how to make a claim.
If you have to cancel your trip due to illness or another emergency, call your agent right away.
WHN Tip: Bring along a copy of your policy. Store your originals in a safe location outside your home (like a relative's house or bank safe deposit box), in case your home is damaged in any way.
During Your Trip
Keep copies of receipts for all expenses during your trip
If something happens, don't delay! Call your agent immediately and explain exactly what has happened.
Ask what is needed in order to file a claim.
WHN Tip: Prove It
In most cases, the insurance company will need a record or proof showing the event took place. Keep copies of the police report, airline claims, receipts, take pictures of damaged luggage, the incident, and so on.
If you need monetary assistance, ask the agent how you'll receive the money. Will it be wired? Will you be sent a check? Should you pay the bills and keep the receipts?
For medical bills, you might have to pay for the care first and then be reimbursed later. Save all receipts, records and so on. Can't pay the bills? Be sure to call your insurance agent immediately for assistance.
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