When we pack our suitcases and embark on an adventure, anything can happen — and usually, that’s the fun of it! But for times when “anything can happen” means lost baggage, missed flights or health emergencies, there’s travel insurance.
What Is Travel Insurance?
Travel insurance policies were designed to cover risks associated with all types of travel — from weekend getaways to once-in-a-lifetime vacations. Different plans cover different issues when you travel abroad. You can get coverage for trip cancellation and interruption, lost or damaged baggage, flight insurance, medical care or evacuation due to natural disasters. You can purchase policies individually, or you can buy packages with broader protection. Common types of coverage include:
Travel Health Insurance
Commonly used for international travel, these plans provide healthcare insurance when you’re away from home. Your U.S.-based medical insurance is not likely to work while you’re traveling internationally, and Medicare typically doesn’t provide any coverage once you leave the United States.
Trip cancellation coverage reimburses you for prepaid, nonrefundable expenses if the tour operator goes out of business or you must cancel the trip for one of the covered reasons outlined in the policy, such as illness, death and natural disasters.
Baggage and Personal Belonging Coverage
Baggage and personal effects coverage protects lost, stolen or damaged belongings during travel to, in, and from a destination. Keep in mind, though, that many travel insurance policies pay for belongings only after you exhaust all other available claims, like reimbursement from the airline.
Vacation Rental Insurance
Vacation rental insurance covers costs from accidental damage to a vacation rental property. Some plans also offer trip cancellation and interruption to help reimburse costs when you can't use your vacation rental due to things like lost keys and unsafe or unsanitary conditions.
Accidental Death and Dismemberment (AD&D) Insurance
If death or serious injury occurs while traveling, AD&D coverage pays a lump sum to you or your beneficiaries. It may not be necessary if you already have life insurance, so be sure to review any existing policies if you’re concerned about something happening to you while on the road.
How to Choose Travel Insurance
With so many options, you may find yourself wondering if you need travel insurance and, if so, how much travel insurance you need. As you plan your next vacation, consider these five questions when deciding if buying travel insurance is worth it.
1. Do You Have Existing Coverage?
Several credit card companies offer some form of travel protection against issues like lost luggage and travel cancellation. Determine what coverage you already have that may cover you abroad before purchasing additional protection.
2. Does the Trip’s Overall Expense Justify the Cost of Insurance?
Comprehensive travel insurance premiums average 4 to 10 percent of the total cost of the trip. On a $5,000 cruise, for example, travel insurance could cost between $250 and $350. You might not need travel insurance for domestic travel with few pre-paid costs or for inexpensive trips where the cost of travel insurance would exceed the cost of the trip. When traveling abroad, emergency medical and evacuation coverage is essential.
3. Have You Shopped Around?
You compare prices and coverage for other insurance policies, right? Travel insurance should be no different. Check with travel agents, insurance agents and online booking sites, then compare policies and prices before purchasing travel insurance.
4. Did You Read the Fine Print?
When deciding if buying a travel insurance plan is worth it, you need to understand the terms and conditions. Make sure the policy covers the full cost of nonrefundable trip arrangements and understand any exclusions. For instance, some policies don’t cover medical emergencies related to pre-existing conditions. Others may not cover injuries related to adventure sports or travel to certain destinations.
5. Do You Travel Often?
If you travel a lot, consider annual coverage. Annual plans are best for travelers who take multiple global trips, and prices are based on estimated number of trips, average length of travel and coverage options. Several companies offer annual travel insurance that provides worldwide coverage for 12 months.
These plans are more economical than standalone policies — and more convenient than purchasing new policies for each trip — but there are limitations. For example, most annual plans offer limited coverage for trip cancellation and interruption.
Travel insurance can provide essential protection in cases of accident and emergency, but it’s not needed for all travel. Knowing when you need a policy — and what to look for — can give you peace of mind on your next trip. If you do purchase travel insurance, keep written confirmation of the policy (including receipt) accessible and a print copy with you.
Find Out If You Need Travel Insurance
Your local Farm Bureau agent can help you figure out if travel insurance is worth it for your trip so you can focus on the fun.