If you’re like many people, you believe that traveling is one of the most enjoyable ways to experience life.
However, even the best-planned vacations can become subject to life’s surprises. Illness, an unfortunate family event such as death or job loss, can cause a change of plans in an instant. If you’re truly prepared for travel, you’ll understand that all of these issues and more are the reason travel insurance was created. In the event of an emergency, all is not lost, simply postponed, as travel insurance will help reimburse you for the vacation you weren’t able to take.
What is Travel Insurance?
Travel insurance can be purchased to help relieve the financial stress associated with canceled plans. Travel insurance covers much more than the canceled vacation due to illness, injury, or an unforeseen emergency.
Travel insurance will help pay for lost luggage. It can help provide financial reimbursement if a trip needs to be cut short due to illness, injury, or an emergency. It can also provide financial relief should a vacation become disrupted due to a terrorist event or a natural disaster. This type of coverage even helps provide financial relief in the event of a theft or other criminal victimization.
Average Cost of Travel Insurance
Travel insurance is one of the more affordable types of insurance, as it is insuring a specific, one-time event. Therefore, there are no ongoing payments, and it won’t break the bank when you’re already spending money for a vacation worth insuring.
According to most insurance companies, there are several factors that determine the premium of the travel insurance, such as the age of the travelers, the cost of the trip, the number of travelers, and even the length of the trip. Typically, the average cost of travel insurance will be between four and 10 percent of the total cost of the vacation, based on the aforementioned issues.
Imagine you have booked the dream of a lifetime. Maybe you’re traveling to Australia for two weeks. Perhaps you booked a cruise to Greece and Italy. Wherever you are going, you spent around $10,000 for this vacation for you and your loved ones. Then, suddenly, you get sick the day before you plan to leave.
With travel insurance, you can be reimbursed for your vacation and schedule it for another time. Without the insurance, not only do you miss your bucket list vacation, you’re out $10,000 as well.
What Does Travel Insurance Cover?
Travel insurance covers so much more than the cost of a canceled vacation. Here are some of the issues with which travel insurance can help (and there are more!):
- Trip cancellation due to sickness, injury, or death
- Cancellation due to destination hurricane or natural disaster
- Cancellation due to loss of income
- Cancellation due to employment emergency
- Cancellation due to terrorist attack
- Cancellation due to bankruptcy of the hotel/airline/cruise line/tour company
- Cancellation due to jury duty
- Emergency causing a need to return home, interrupting the vacation
- Medical emergencies overseas
- Emergency evacuation expenses
- Lost, stolen, or delayed luggage
- Delayed flights
- Telephone assistance
What Does Travel Insurance Not Cover?
Of course, travel insurance, like any type of insurance, is not without exclusions. As comprehensive as travel insurance is, it contains exclusions designed to prevent fraudulent claims. It is also designed to ensure that you will take responsibility for your own experience and follow commonly known travel etiquette and regulations. Some of the common exclusions found within travel insurance policies include:
- Baggage loss or theft caused by leaving luggage unattended in an airport
- Undisclosed preexisting medical conditions resulting in a claim or incident
- Changing your mind and deciding to stay home
- Tickets or tours won and not paid for by the traveler
- Travel in which you are seeking medical treatment away from home
- Poor weather conditions
- Injuries due to high-risk activities
- Claims made as a result of acts of war
- Claims made as a result of venereal disease, AIDS, pregnancy, or abortion
- Claims made as a result of mental, psychological, or nervous disorders
- Claims made as a result of illegal activities
- Losses occurring while intoxicated
It’s clear travel insurance is a necessity for anyone traveling abroad or within the United States. However, not all travel policies are created equally. When choosing travel insurance for your trip, make sure you know what is available through each carrier. Decide whether you wish to have coverage that will cover cancellation for any reason, whether you want a travel package policy or travel medical insurance only.
Beyond these common types of issues, consider the purpose of your trip and whether it would be covered in any way. You may choose to forgo the insurance if you are simply traveling abroad for a medical procedure, as it would not be covered. Or you may want cancellation coverage if you are performing only high-risk activities while on vacation. Whatever your purpose, it is essential to discuss all of the options and issues with your travel insurance agent to determine the best policy for your needs.