If you are planning a trip, you may be considering travel insurance. Below are tips to help you evaluate your travel insurance needs.
Understand the different types of travel insurance – There are three main types of travel insurance: medical coverage, trip protection, and luggage or car rental protection.
- Medical Coverage – A medical/health policy covers medical and dental expenses incurred because of injury or illness. Then there is medical evacuation coverage, which covers you in case you need to be transported to a hospital. It is typically included under medical coverage, but can also be purchased as a stand-alone policy. You can also purchase an accidental death and dismemberment policy. This covers you on your flight over, back, and at all times during the vacation. It acts like any life insurance policy, paying your beneficiary a set amount in the event of death.
- Trip Protection – This coverage is broken down into three parts, beginning with cancellation coverage. In the event that you need to cancel your trip due to illness, your prepaid expenses will be reimbursed. It also allows cancellation if a family member is sick or dies. Delay coverage handles transportation delays. The last type of cancellation coverage is trip interruption protection. If you get sick while away, or a family member falls ill or dies, you will want an interruption policy. It also covers your trip if it is cut short due to bad weather, travel company bankruptcy, an airline strike, and even jury duty.
- Luggage/Car Rental Protection – This covers your rental car in the event of an accident and your baggage and personal items if they are lost, damaged, or stolen. This kind of policy usually does not cover loss or damage in flight, and some of your personal items may be too expensive to cover. Read the fine print about what is covered and under what circumstances.
Check your current coverage first – The first thing to do when determining your insurance needs is to check all your current insurance policies and credit cards. Your health, life, auto, and even homeowners insurance often cover a great deal of what you would pay for with travel insurance. You should also check your existing policies closely if you are traveling abroad to ensure coverage in foreign countries. The best thing to do is to talk to your agent, and see what he or she recommends.
Make a coverage checklist and compare policies – Here are some important items to look for when purchasing travel insurance:
- Check to see if your expenses are covered up front, or if you pay and get reimbursed later.
- Make sure you understand the deductible and any coverage limits.
- If you are on medications, be sure your policy covers replacement costs.
- Beware of policies bundled with your trip by your travel agent. They are often substantially more expensive.
- As with any insurance, shop around. Check prices and compare coverage.
- Check your destination’s national medical plan. Some are less expensive than travel insurance and tourists can even be covered under the country’s health care system.
- Check with your insurance carrier about adding a rider to your existing policy to cover expensive items like laptops and jewelry.
- Check to see if cancellation due to terrorist acts is covered.
- Ask if the coverage is primary or secondary. Secondary policies require that you go through your standard insurance first. Primary covers you outright.
- Make sure there are no destination restrictions.
- Find out what hazardous activities are covered and weigh that against your recreation plans.
- Maximize your coverage by buying at least two weeks before your trip.