by Jenny Fliegel
Planning on taking a trip to your dream destination in the near future? You might want to consider investing in a travel insurance plan. Travel insurance policies cover you for unexpected costs that occur before or during your trip, which can lower the costs coming out of your own pocket in return.
Travel insurance is more than just medical protection; it’s financial relief. It allows you to worry about one less thing before traveling. The U.S. Travel Insurance Association reported that purchases of travel insurance policies are up by over 15 percent since 2012. Regardless of where you may be headed, accidents and injuries can happen anywhere, and it’s better to be safe than sorry.
We took a look at your options for travel insurance, and why you should consider purchasing a plan before booking your next trip.
Trip cancellation or interruption insurance
This is the most common type of travel insurance. Trip cancellation insurance alleviates the risk of losing your money if an unforeseen event occurs. It typically reimburses a majority of your expenses if you have to cancel your trip for a qualified covered reason. The exact coverage varies from provider to provider, including situations such as the injury or illness of the insured, travel companion, or family member, as well as a natural disaster striking the destination and bankruptcy of your travel company.
It’s essential to know the difference between trip cancellation and interruption insurance. Trip cancellation is when you don’t go on your trip at all, and trip interruption is when you cut your trip short. If you choose trip interruption, you’ll only be reimbursed for the portion of the trip that you didn’t complete.
Before buying a specific medical insurance policy for your trip, check with your medical insurer; you might already be covered under your existing health plan. However, you may still want to consider buying medical travel insurance. Most medical travel insurance plans will cover ambulance costs, hospital services, and 24-hour emergency assistance.
Instead of working with your existing health plan insurer, domestic and international hospitals usually work directly with your travel insurance carrier while handling billing due to costly emergency situations, such as procedures and overnight stays. If you are not covered by a medical travel insurance plan, you’ll likely pay up front and get reimbursed by your insurer at a later date.
Evacuation insurance is frequently purchased by travelers headed to an adventurous destination. This type of policy covers the cost of transporting you to the nearest place where you can receive appropriate medical treatment in the event of an emergency. Evacuation insurance is not normally included in a regular medical insurance plan.
Keep in mind that medical and evacuation insurance may not cover a traveler participating in a dangerous activity such as skydiving, mountain climbing, bungee jumping, scuba diving, or even skiing. If you’re considering taking part in a similar event, you may be eligible for adventure-sports coverage.
This type of travel health insurance policy reimburses travelers for immediate-need items — like clothes and other essentials — if baggage is delayed when you arrive at your destination. It will also kick in if your luggage is lost, stolen, or even damaged throughout your trip. Baggage insurance is included in most regular travel insurance policies. If your baggage is checked for a flight, it may already be covered by the airline.
Flight insurance is typically purchased for international trips due to higher fare costs. This “crash coverage” policy prevents you from losing money from a delay or cancellation due to strikes, bad weather, and mechanical breakdowns.
Collision coverage is important if you’re considering renting a car during your trip. This type of plan provides coverage for loss or damage to a rented vehicle, as well as the cost of repairs and replacements. It may be included in some comprehensive plans, and it is also available as an upgrade..
Keep in mind that collision coverage doesn’t cover loss or damage of personal items inside the car at the time of the incident, damage to another vehicle, or medical care for individuals hurt in an accident involving the rental car.
‘Cancel for any reason’ coverage
If you don’t want to question what is and isn’t covered by your travel health insurance plan, you can purchase ‘cancel for any reason’ coverage. This type of coverage allows you to receive up to a 100 percent reimbursement if you cancel your vacation before or during your trip for any reason not listed in the standard policy.
This type of plan is good to consider if you have worries about health issues such as the Zika virus. A typical travel policy most likely won’t reimburse you for your trip if you cancel due to the outbreak of a disease. If you’ve purchased a ‘cancel for any reason policy,’ your claims are more likely to be approved.
How to purchase travel insurance
Travel insurance can be purchased up to 24 hours prior to your departure date. The best way to lock in the lowest travel insurance rate is to purchase a plan immediately after booking your trip, because policy prices will increase as your departure date gets closer. According to the Insurance Information Institute, you’ll pay about 5 to 7 percent of the cost of your trip for a standard comprehensive policy.