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Why choose travel insurance? Travel insurance is something that we purchase to insure we have less travel headaches. Just like car insurance and medical insurance, we don’t want to use it. However, it’s there just in case you need it. Let’s look at why travel insurance can be a smart choice.

Important Insurance Basics

Travel Insurance cover five catagories: trip interruption and cancellation, flight insurance, baggage, medical and evacuation. Additionally, there are supplement policies that can be purchased for specific concerns. Certainly, most are sold in combinations and cover these main five categories.

“Comprehensive insurance” covers all of the above (plus expenses incurred if your trip is delayed, if you miss your flight or if your tour company changes your itinerary).

Travel insurance companies such as Travelex and Travel Guard offer comprehensive packages that serve as your primary coverage; the insurance company will take care of your expenses regardless of what other insurance you might have. That means your policy pays first and doesn’t ask questions about your other insurance. This can be a real life saver! Saving you additional out of pocket/out of network expenses.

Travel Insurance Prices

Travel insurance prices vary widely, with most packages costing between 5 and 12 percent of the total trip. One of the biggest factors affecting the price is age: Rates go up dramatically for every decade over 50, while coverage is generally inexpensive or even free for children 17 and under.

Your travel agent may recommend that you get travel insurance, but it’s not just because they get a commission when you buy it. The agent can be held liable for your losses if they don’t explain insurance options to you. While travel agents can give you information and advice, they are not insurance agents — always make sure to direct any specific questions to the insurance provider!

Travel Insurance Varies State By State

The policies that are available vary by state. Not all insurance companies are licensed in every state. If you need to make a claim and encounter problems with a company that isn’t licensed in your state, you have no case.

Some travel insurance, is reimbursement-only: You’ll pay out-of-pocket for your expenses, then submit the paperwork to your insurer to recoup your money. If you have a problem, it’s important to contact your insurance company immediately. Make sure you ask them how to proceed! Many of the major insurance companies are accessible by phone 24 hours a day — handy if you have a problem.

Types of Coverage

Travel insurance can vary greatly even within the same company. Certain companies and policies have different tiers of coverage depending on where you purchased your travel (did you purchase from the travel company directly, travel agent or online with a third party.) Read the fine print and ask lots of questions. Your research could be worth it’s weight in gold.

Trip-Cancellation or Interruption Insurance

This may be the most beneficial kind of travel insurance. If you ever canceled a trip or had a trip interrupted, you understand. Once you travels are paid in full, it is costly to change them without insurance. Insurance is just a fraction of the cost of your whole trip and so worth the piece of mind.

I know for James and I we have forgone travel insurance on some trips. We were young, strong and so we thought, invincible. But we have been very lucky and never needed it. As we get older, we are not quite so willing to roll the dice as they say.

An uncovered accident will definitely ruin our vacation memories, especially if our vacation costs us extra than what we planned. With that said we now purchase insurance all the time. The thing is you don’t have to wait, it is less expensive when you are younger, and an important layer of protection if you need it. Plan accordingly.

If you are a credit card holder, check with your cards to see if they offer limited coverage. Your credit cards may offer limited coverage for flights or tour purchases with you card.

Standard Trip Interruption or Cancelation

The standard trip interruption or cancelation covers nonrefundable financial losses. You incur these when you cancel a prepaid tour or flight for and acceptable reason. An acceptable reason would be:

• If a family member at home gets sick (check the fine print to see how a family member’s pre-existing condition might affect coverage)
• Your tour company or airline goes out of business and/or can’t perform as promised
• If you, your travel partner, or a family member cannot travel do to sickness, death, layoff, or a list of other acceptable reasons
• You miss a flight or you need an emergency flight for a reason outside your control (such as a car accident, inclement weather, or a strike)

So, if you or your travel partner accidentally breaks an arm. A few days before your trip, you can both cancel (if you both have this insurance). Without you losing all the money you paid for the trip. In addition, if you’re on a tour and have an accident on your first day, you will be reimbursed for the portion of the tour you were unable to use.

This type of travel insurance can be used whether you’re on an organized tour, cruise, or traveling independently. The differences between the two are understandable: Trip cancellation is when you don’t go on your trip at all, you cancel. Trip interruption is when you begin your trip, but have to cut it short; in which case, you’ll be reimbursed only for the portion of the trip that you didn’t complete. If you’re taking a tour, it may already come with some cancellation insurance, just ask.

Flight Insurance

Some travel insurers won’t cover certain airlines or tour operators. Many are obvious — such as companies under bankruptcy protection — but others can be quite surprising (including major airlines). Make sure your carrier is covered, again check the fine print.

Flight insurance is basically a life insurance policy that covers you when you’re on an airplane. Since plane crashes are so rare, there’s little sense in spending money on this insurance. But if your plane should crash, your loved ones left behind will appreciate it.

Medical Insurance

Before purchasing an additional medical insurance policy for you trip, check with your medical provider. You may already be covered on you existing medical plan. I know for our policy we are only covered in our home state. But your policy maybe different, do your do diligence. On the same lines, be aware of your policy exclusions and preauthorization requirements.

Even if your health plan does cover you internationally, you may want to consider buying a special medical travel policy. The hospital will deal directly with the travel insurance provider but not you primary medical insurance. So, if you just use your primary insurance you would need to pay up front expenses and submit your bills for reimbursement.

Travel Warnings

Keep in mind that the US State Department periodically issues warnings about traveling abroad and to at-risk countries. If you’re visiting one of these countries, your cancellation and medical insurance will likely be voided, unless you buy supplemental coverage.

For travelers over 70 years old, buying travel medical insurance can be expensive, it will be a chunk of your travel expenses. I have seen many travelers need these policies and I so hope they have them when an accident occurs.

In addition make sure you compare the cost of a stand-alone travel medical plan with comprehensive insurance. Some plans comes with good medical and evacuation coverage. A good travel-insurance company can help you sort out the options.

Theft Protection

Theft can be very concerning when consider the dollar value of the items we pack with us. Laptops, tablets, cameras, smartphones, and ebook readers are all expensive to replace if they are stolen or lost.

There are two ways to protect these items: the first is to leave them at home or to protect your investment with a specialized insurance company such as Travel Guard. Before purchasing a policy make sure to ask how they determine the value of your stolen items. Also, is there any maximum reimbursement limits for items like jewelry, electronics etc.

Homeowners and Renters insurance

If you have homeowners or renters insurance check to see if your personal property is covered for theft. While your there check the deductible for a loss. It maybe more expensive than the replacement item. You can look into adding a rider to your existing policy, if you are a heavy traveler. If thats not the case, adding specialized protection maybe in order.

When bringing high ticket items on vacation make a list of serial numbers, make and model information. This will be a life saver if anything happens to them while you are away. Remember that if you do need to file a claim you may need a police report.

Evacuation Insurance

Evacuation insurance will cover you if you need to be transferred to another place for appropriate medical treatment. If you need to be medivac/air lifted it is incredibly costly and it is not usually covered by your regular medical insurance plans. Although you may need a supplementary adventure sports coverage. Only if you are planning on skydiving, bungee jumping, skiing and/or mountain climbing.

Collision Coverage

Collision Coverage is an important type of insurance for car rentals. This coverage may be included in some comprehensive travel-insurance plans, on your credit cards or available as an upgrade on others.

Travel Insurance Providers

For extensive travel insurance coverage, go with a big-name company. Avoid buying insurance from a no-name company you find online. Consider the package deals sold by:

• Betins
• Allianz
• Travelex
• Travel Guard
• Travel Insured International
• Chubbs Travel Insurance

You can compare insurance policies and costs between various providers at SquareMouth and at Insuremytrip.com(both also sell insurance).

Make sure to buy your travel insurance policy within a week of the date you book your trip. Policies purchased later than the companies cutoff will result in less coverage.

Hence, why choose travel insurance.

Happy Travels!