Travel Insurance - Is It Really A Necessity?

A variety of unplanned events can put even an experienced  traveler at risk of losing a lot. This could be anything from having to cancel your non refundable trip at the last moment due to an illness or death in the family; to facing the need for being evacuated from a foreign country back home. At such times, you will wish you had spent some time learning more about Travel Insurance. Even though there are several pluses to Travel Insurance, there are definitely many components that people  do not understand about the coverage. We will try and cover as many pointers to help you make an informed decision before you book that trip.

When should you buy travel insurance?

It is important hence to ask yourself why you are buying the travel insurance.

Do you have to pay for sign ificant parts of your trip before you leave?

Do you have a complex itinerary like connecting flights, flight to the cruise that might be delayed?

Are you planning an adventure trip?

These are situations where you may want to think about Trip interruption, cancellation and/or medical & evac insurancd.

You may already have medical coverage under your Homeowner's or health insurance.  The credit card you makeuation coverage. On the other hand Travel or Trip insurance is not cheap and could be up to 8% of the cost of your trip.  Don’t forget, your insurance may cover you for things like baggage delay or loss.

Where should you buy your insurance?

It seems very easy to sign for a policy with the tour operator. Most cruise liners, airlines and even online package tours readily offer travel insurance. But do think about whose side will they be on when a dispute arises! Additionally if your tour operator goes out of business, you lose both your vacation as well as the insurance. We would recommend checking your homeowner's policy and health insurance to know what all is covered. Finally check in with the credit card to see all the components that are covered. Ask as many questions as you can, pick up the phone and clear your coverage doubts in the worst case scenario. Needless to say, purchase your trip and insurance from separate companies. Once you know what you want,  we recommend using a

Does your Homeowner's policy really help?

Even though it will cover lost/stolen luggage; keep in mind that filing for a few hundred dollars may not be worth it. You will have to pay your deductible which you don’t have to with travel insurance and then filing a claim may mean your insurer raises your rate or drops your coverage!

What exactly is Travel Insurance?

Travel Insurance has been growing over the years with Americans spending more than $2 billion annually on insuring their trips. The primacy purpose of the insurance is coverage against unexpected cancellation. Travel insurance comes to you as a comprehensive package. It still pays the non refundable parts of your tip in case of cancellation, delay or interruption. There are policies which will cover cancellation for "any reason" too but these come to you at a 50% higher price. For folks with health issues and no medical coverage outside the country,  the more important component of the insurance is the Medical coverage.  For adventure travelers, emergencies like being air lifted off a mountain for $45,000 may be more worthy of insurance. Here is a summary of Travel Insurance components.

• Trip cancellation .  Pay special attention to which circumstances are covered.  For timeshare rentals, this is the most important feature.
• Involuntary job loss - Not all policies will cover this but it is good to know if a costly non refundable trip will be covered in case you happen to lose your job and cannot afford to go on the trip anymore.
• Baggage delay/ loss - In case the airline misdirects your luggage, some policies include coverage to get your baggage to the next leg of your journey. In case of permanent loss, the insurance covers the finances.
• Financial default by the trip provider - Some of the insurance policies also cover financial default of the tour operators, hotels, airlines/ cruise liners. Policies that come directly through the cruise liners may not cover this - read the fine print carefully.
• Medical Expenses - Medical component consists of medical expenses as well as medical evacuation. Most countries require that you pay the doctor/ emergency room up front and this could be a financial disaster for most without a policy cover that reimburses quickly. (Do check about Primary/ Secondary coverage).
• Emergency evacuation/ Repatriation - It is not just in movies, emergency helicopter evacuation during a stroke/ fatal injury could be a reality. A medevac may be the only option if you are far from any help. Some kinds of trip insurance cover repatriation of remains in case of death during an insured trip.
• War/Terrorism - Even though any acts of violence due to war, strike or terrorism are mostly covered; do check your policy carefully to know how these are covered.

Now that you understand some more about Travel Insurance, it is imperative that you purchase your policy from a reputable and licensed insurer. A website that lists many reputable companies that you can compare is Squaremouth.  The U.S. Travel Insurance Association (www.ustia.org) is somewhere you could check for licensed insurers; also check for feedback in your local Better Business Bureau (www.bbb.org).