No one ever hopes to have to use their travel insurance. But in the off-chance that there is an emergency abroad or unexpected changes in your travel plans, having a great travel insurance policy can save you the headache when things don’t go 100% as planned. Having the best travel insurance can also save you time and money in case of unforeseen events ranging from medical accidents and personal theft to delayed flights and hotel cancellations.
There are hundreds of options out there and while there is no right or wrong way to shop for your ideal travel insurance package, it is important to be aware of the differences in type, price and coverage. To make life easier for you, we’ve summarised the essentials of a solid insurance plan to give you peace of mind on your next holiday.
What is travel insurance?
A rock climber hangs on to a steep boulder overlooking Southern California
A simple online search for travel insurance will leave you with an endless amount of results, not to mention a million unanswered questions. The number one fact to remember is that travel insurance is not a replacement for your health insurance at home. Rather it is there to protect you only in case of an accident or an emergency abroad.
What does it cover?
This depends on the specific plan that you purchase. Many times travel insurance will cover the full or partial cost of flight tickets, lost items, emergency medical expenses and more. Coming up next, we’ll present a complete breakdown of what each type of insurance covers.
How much should it cost?
A comprehensive plan will usually cost around 4-8% of the total cost of the trip. A good rule of thumb is to add up the cost of your non-refundable purchases (including flight, hotel, rental car, cruise and any other items you wish to be covered for) then multiply by 5%. This will give you a rough estimate of what you should expect to pay.
Is travel insurance right for you?
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As a general rule, if your trip is overseas, expensive, and/or more than 2 weeks, it’s a good idea to purchase some sort of travel insurance. For example, someone from the UK might consider travelling without insurance during a weekend trip to Dublin, a relatively close and familiar destination, but might strongly think about purchasing travel insurance during a three-week-trek throughout South America.
For those travelling with children, the good news is that most insurers will provide free coverage for your dependent children. Under a family policy, kids will receive the same coverage as their parents as long as they are travelling with their parents for the duration of the trip and are not employed full-time if they are old enough to work. Children travelling alone on a school trip for example will need their own separate insurance.
Senior travellers over the age of 65 are more likely to pay higher premiums, but there are many affordable and specially-tailored senior travel insurance options available. For retirees planning to travel twice or more during the year, a multi-trip policy is often much cheaper than single-trip policies.
Although not necessary for every traveller and every trip, it’s a good idea to ask yourself a couple of questions to help determine if you would feel better opting in for insurance, or if you are feeling risky enough to go without.
- Where are you going and for how long? (Is this a casual city escape during the weekend or a month long excursion in an unfamiliar location?)
- What is the total non-refundable cost of your trip? (including flights, hotel, car rental, cruise, etc.)
- What is the price limit that you are comfortable with losing should anything go wrong?
- What sort of activities will you be doing? (Will you be window shopping and café hopping or trekking and hang gliding?)
- What will give you peace of mind? (Will you have any anxiety if you do not purchase travel insurance or will you be comfortable without during your travels?)
You’ve decided to go with the travel insurance – now what?
Now it’s all about finding out what is best for your individual needs. Here are a few examples of the options you will find when shopping around:
- Comprehensive – This is the all-inclusive plan, offering compensation for travel cancellations and interruptions, delayed or missed connections, theft, lost or damaged baggage and emergency medical care up to the stated limit. This is a great option for travellers who want the flexibility to cancel their trip for a variety of reasons or who are considering additional coverage for things such as extreme sports, pet boarding fees and even rental car coverage.
- Travel medical – For those who only want medical-related coverage. This includes reimbursement for medical bills and trip interruption should you end up in a hospital or need to head back home due to a medical emergency. It also offers 24-hour emergency service if you need help finding a doctor, emergency evacuation coverage in case you need to be transported and in some cases dental coverage if you accidentally break or chip a tooth.
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- Medical evacuation – This plan, while not a full medical coverage option, will cover the cost of an ambulance or other transportation in case of an emergency where you need to be transferred to another hospital or location.
- Accidental death – Not quite the same as life insurance, this option will cover you in case of dismemberment or loss of life during travel. It is typically bought in addition to a comprehensive plan.
- Group – If you are travelling with friends or family in a group of 10 or more, group travel insurance is a good option to make sure that everyone is covered during your trip.
- Travel visa – Only required to obtain a Schengen Visa for Non-EU nationals travelling to Europe for over 3 months. This will cover things like emergency medical coverage, evacuation and repatriation.
Fundamentals of a good insurance plan
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If you have decided on a one-time comprehensive insurance plan, there are some things you should look for in a great policy.
- 24-hour call service
- High coverage limit
- Emergency evacuation care
- Availability in all countries
- Coverage of lost, damaged, or stolen property (including electronics, jewellery, luggage, and documents)
- Personal accident coverage
- Cancellation coverage, including flights, hotels, transportation
For more seasoned travellers and especially those that are planning to travel at least 3 times throughout the year, an annual insurance plan can be the most cost effective option. In addition to providing affordable medical, personal and cancellation coverage, an annual plan will give you peace of mind by ensuring that you are covered for all your trips. Although typically limited to 31 days of consecutive travel per trip, there are even some policies that will cover up to 60 travel days per trip.
Things to watch out for
Extreme sport enthusiasts celebrate at the end of their white water rafting excursion
There are many misconceptions about what can and cannot be covered. Be careful to read the fine print and know exactly what you are paying for before it’s too late. Even the most expensive and comprehensive plan might not cover everything that you think it does. Keep in mind the following, which are not commonly covered by travel insurance:
- Pre-existing medical conditions (including extra medicine for previously-prescribed medical conditions such as high-cholesterol, diabetes, mental disability, etc.)
- Extreme sports (you can pay extra for this coverage if you plan on bungee-jumping or white-water rafting for example)
- Foreseeable natural disasters (especially tropical storms and hurricanes, which become classified as foreseeable events with known potential to affect your travel once they are named by the National Hurricane Center or other forecasting entity)
Finding the right insurance plan for your trip can seem like an endless endeavour, but with the right tools and information, you can easily choose the plan that is best for your individual or group needs. Major international companies like Travelex and Allianz are great resources to see what options are available for you. For a more local approach, check with your home insurance provider or bank and get an estimate of their quotes. If on the off chance you are already travelling and forgot to purchase insurance, you can also contact your local embassy in whichever destination you are presently staying.
You can also reference online comparison sites like InsureMyTrip or SquareMouth if you need further analysis or want to read in-depth reviews.
