Travel Blog


Travel Insurance

Travel Insurance Do you need travel insurance? The answer is definitely yes, however there are various types of travel insurance that you will want to consider depending on the type of trip that you are taking and where you are going. Like all insurance one has to ask themselves: What is the probability of making a claim; What will the cost be if I need to make a claim; What is the financial impact if there is a claim? Peace of mind when I travel? and what happens if I need to cancel my trip before I leave or during my trip? These are all valid questions to consider.

Travel Insurance – Types

There are several different types of insurance that the majority of travelers will consider. It also depends on your mode of travel as well.

  • Lost and damaged baggage
  • Trip cancellation
  • Trip interruption
  • Health claims
  • Car insurance
  • Private travel arrangements

We will discuss each one of these briefly for the reader, however if you have additional questions we strongly suggest that you speak to your travel agent and your insurance company. All insurance packages have conditions and it is important to understand what they are to make sure you are covered. For example the most publicized one is the “pre-existing conditions ” clause when it comes to health insurance. Basically they are saying that they will not insure you for any pre-existing conditions, so you are on your own. All insurance documents have these fine print conditions so read the details to make sure you are properly covered in all cases.

Lost and damaged baggage

This applies mainly to people who are traveling by air as well as on cruise ships, however the hotel can also lose your luggage. The airline might cover you for some damages if it is proved that they were at fault, however the money the generally provide is a small percentage of what you probably will have in your luggage. If you cannot take carry-on, then evaluate the risk of losing your luggage vs. the incremental costs of carrying insurance to make a decision. Some credit cards will provide this type of insurance, only if the trip has been charged to that credit card.

Trip cancellation

Trip cancellation can involve significantly more money if you are booking air plus a resort fee of some kind. Trips can be canceled for many reasons by customers due to illness or death in the family. Typically you cannot cancel just because you no longer feel like going. You will have to produce a doctor’s certificate or even a death certificate in order to get your money back. Again evaluate the risk of needing to cancel your trip vs. the incremental costs of carrying insurance to make a decision. Note that you must purchase the cancellation insurance at the time you book the trip and not afterwords. Some trips can cost thousands of dollars so a cancellation can have a far bigger impact on your finances.

Trip interruption

Some times a trip needs to be interrupted due to illness at home or some emergency which causes a traveler to interrupt their trip. Similar to trip cancellation, you will need to evaluate the risk vs. the cost to you to interrupt your trip and fly home.

Health claims

This is the big one, especially if you are traveling in the US from another country or need to be air lifted home. Even a visit to emergency for several hours can cost several thousand dollars and you can be out of pocket for tens of thousands if you need to stay at a hospital for any length of time. Not having health insurance with all of the coverages you need can have catastrophic impact on your financial well being. Purchase health insurance for your travel or do not travel. It is as simple as that.

If you have pre-existing conditions, you will need to fully disclose these conditions and evaluate what will be covered vs. what is not covered before you go. If you do not advise the insurance company about your pre-existing condition and you have a large claim they are going to investigate including checking with your doctor! Don’t be silly about this obtain proper health insurance when you travel.

Car/Van/RV insurance

Some people love to travel by car, van or RV. We have found that it is a good idea to check with your insurance company ahead of time to verify coverage. If you plan to go to Mexico with your car for example, most companies will charge an extra fee to add this coverage to your policy, while traveling in the US is usually included.

Private travel arrangements

Private travel arrangements are usually not insurable. This is a situation were you book a condo or hotel on your own and for some reason need to cancel. If you need to pay in advance, then you are at risk. The best insurance in this situation is to discuss up front with the person or company you are renting from, to determine what the arrangement would be if you needed to cancel for some reason. Make sure you get this in writing so there is no disagreement or confusion later on.

Travel insurance is a really important area ans should not be ignored if you plan to travel. Talk to your travel agent or to your insurance company. Many of the insurance companies have special departments that focus on providing these types of services.

Good luck and travel safely. Comments that will help our readers are much appreciated.

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