Travel Insurance: Do You Really Need It?

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* Travel insurance covers trip cancellation and interruption
* It can save you thousands of dollars in the event of an emergency
* Usually travel insurance includes other perks like baggage delay coverage

So you’ve just booked a trip abroad. Congrats! Now make sure that vacation isn’t going to bankrupt you when something goes wrong. Get travel insurance to protect yourself and those who are traveling with you. Before you decline the option, here are a few things to consider.

What Is Covered?

Most travel insurance policies cover any unexpected costs that arise from trip cancellation or interruption due to medical emergencies or other unforeseen circumstances.

For example, if you have a car accident while in a licensed taxi in Italy, travel insurance will supplement your normal health insurance to cover your medical bills and even pay for your evacuation from the country if necessary (knock on wood that you don’t need it).

In addition, travel insurance usually has a few other perks like baggage delay coverage and 24-hour help lines. Here are a few things you’ll find in most policies:

  1. Trip Cancellation Coverage – If you need to cancel a trip for a medical or weather-related emergency, your insurance will reimburse any deposits or payments already made.
  2. Trip Interruption Coverage – If you need to cut your trip short for any covered reason, the insurance policy will help you get home.
  3. Emergency Medical – If you have an issue while abroad, the travel insurance will pay for you to get to a hospital and pay for your treatment (although most travel insurance only supplements your normal health coverage).
  4. Baggage Loss/Delay/Damage – If the airline loses your bag, you’ll be entitled to a per diem allowance or be reimbursed the cost of the items in the bag should it never reappear. 
  5. Travel Delay – If you are delayed for more than six hours, travel insurance will reimburse any extra expenses you have incurred due to the delay.
  6. 24-Hour Hotline – Most travel insurance companies provide a 24-hour hotline, so you’ll never be left questioning or without assistance in an emergency.

What Isn’t Covered?

Travel insurance isn’t a catch all for cancelling a trip or acting like an idiot while abroad. There are plenty of situations that aren’t covered.

For instance, you are supposed to be going to Cancun this week, but the Weather Channel just announced a tropical storm is set to hit the Yucatan Peninsula the day after you arrive. You race to you computer to buy travel insurance so you can cancel your trip, but your claim will ultimately be denied due to prior knowledge of the storm.

While not an exhaustive list, here’s what’s not covered by travel insurance:

  1. Changes to a trip due to medical reasons without a doctor’s proof
  2. Pre-existing conditions
  3. Claims without documentation (always call the hotline to see what’s needed)
  4. You cancel your trip too soon, but a delay was only necessary
  5. You cancel your trip for a reason that isn’t covered (always read the policy)

So do you need travel insurance? It’s really a good thing to have. As they say, better safe than sorry right? And with rates starting at just $17 (roughly the price of lunch), it’s really a small price to pay for peace of mind.

However, be sure to check with your health insurance provider and any credit cards you use to ensure you aren’t paying for overlapping coverage. Also, search for reviews of the travel insurance company before purchasing. We’ve found Allianz is always a good option, but do some research to find the best one for your destination and needs.

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