Will you regret not buying travel insurance? Bleak, sometimes costly, and often confusing, travel-insurance coverage might seem like a trip-planning technicality that's all too easy to ignore. But Murphy's Law is Murphy's Law, and a good policy could afford some priceless peace of mind. There are a few things you should be familiar with before you purchase coverage, including which policies work best for your type of trip, which policies are completely useless, and how to shop for the best plan. Here are eight key travel-insurance truths that everyone should know.
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You Might Need It
Is it worth it? That's the big question that any traveler considering travel insurance faces. Here's our rule of thumb: If you're taking a long, expensive, or ambitious trip to a far-flung destination, travel insurance could be a smart choice. If a natural disaster or sudden illness were to ruin your travel plans, would you lose a great deal of money? Is this the trip of a lifetime? Have you been saving for this getaway for years? Are you traveling to a place with poor local healthcare facilities? Are your accommodations and plane tickets costly and nonrefundable? If you answered yes to one or more of these questions, you'd do well to seriously consider a plan.
Policies generally cost five to 15 percent of the total cost of a trip, depending on the age of the traveler and trip details. If a good policy fits within your budget, it certainly can't hurt to guard your health and your wallet against conceivable calamity.
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Your Homeowner's Insurance Might Offer Sufficient Coverage
If it's simply your valuables you're worried about, travel insurance might not be your best bet. Although many bundled travel-insurance policies include coverage of stolen or lost items, most people's belongings are already covered by homeowner's insurance. Allstate Homeowner's Insurance with Personal Property Coverage, for example, covers loss or theft of possessions no matter where you travel. If you have a policy like this, bundled travel-insurance policies—also known as comprehensive plans—that include coverage for baggage or personal items could be unnecessary. Consumer advocate and SmarterTravel contributor Ed Perkins advises, "Buying a bundled policy is clearly overkill if you just want property coverage." So check your policy.
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Your Credit Card Might Be Enough
Check your credit card's travel protections, too. According to Ed Perkins, "Several premium credit cards include baggage coverage, provided you pay the entire trip cost with the card. The American Express Green Card, for example, covers replacement cost, not just depreciated cost, and it even covers up to $1,250 for carry-on baggage. This is a no-charge extra. Many MasterCards and Visa cards also offer similar benefits, depending on the issuing bank."
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Read the Fine Print
This one's a given, but we had to say it: Read the fine print! In the unlikely event that you'll have to use your travel-insurance policy, you want nothing to come as a surprise. For example, depending on the policy, hurricane coverage doesn't apply if you buy the insurance after the storm in question has been named; that's a bit of (seemingly arbitrary) fine print that could essentially nullify a policy purchased too late. Take the time to read the details of your plan and become familiar with the documentation you might need when submitting a claim. Take note of coverage limits and exclusions.
Many travel-insurance plans come with a review period; this is a grace period during which you can look over your policy and make adjustments.
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Trip-Cancellation Insurance Only Covers Select Reasons
Trip-cancellation insurance is a good coverage option when you've paid a substantial amount of money for a getaway and wouldn't be able to comfortably absorb the financial loss if your trip fell through. If things don't work out, you'll at least get your nonrefundable, prepaid travel costs back. It's important to note, though, that you'll only get a payout from your trip-cancellation policy if your travel plans are canceled for very specific reasons. For example, CSA Travel Protection's trip-cancellation policy covers trips canceled for a range of different reasons, including sickness (you'll have to show a doctor's note), theft of passport, and natural disaster. Not on the list? If your family member has a baby, if you get a new job and can no longer take the time off for vacation, or if your pet falls ill.
Protect yourself against absolutely any conceivable reason for cancellation with a different kind of policy: a cancel-for-any-reason policy. The choice is yours.
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You Might Be Covered Under Your Current Health Plan
Check your health-insurance policy to see whether you're covered for medical care in a foreign country. Some plans offer full coverage abroad; others offer spotty coverage; and still others, such as Medicaid, don't provide much medical coverage outside of the U.S. at all.
If you lack adequate medical coverage overseas, consider a primary or secondary medical-coverage travel-insurance policy. A primary policy will function as your go-to coverage in the event of accident or illness, whereas a secondary plan can be used as a backup to a health-insurance policy that offers limited overseas coverage.
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An Evacuation Plan Could Be a Good Idea
Some insurance plans are evacuation plans; that is, in the event that you need medical care, your insurance provider will pay for the costs of getting you to a hospital. If you suffer a serious illness or accident while abroad, the most expensive component related to treatment will likely be evacuation. Depending on where you are, it could cost hundreds of thousands of dollars to fly you to a hospital or your home country for emergency treatment; an evacuation plan will cover these costs.
There are two things you should know about this benefit: First, evacuation policies may only cover the costs of transportation to the hospital—not your medical expenses. Second, you may not be able to choose your hospital. While some policies offer a "hospital of choice" option, which allows you to pick a preferred hospital, others don't. As always, read the fine print.
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Aggregator Agencies Can Help You Shop
An easy way to compare plans when shopping for insurance is to use an online agency that functions as an aggregator. On such sites, you'll enter details about yourself and your trip and get a results list of suggested policies. Check out sites like InsureMyTrip and Squaremouth, both of which allow users to perform side-by-side comparisons of different travel-insurance plans and to read customer reviews.
Aggregator sites are a bit different from large-scale, single-provider travel-insurance sites such as CSA Travel Protection and Global Rescue. Although these kinds of sites are less of a one-stop shop, they're worth a browse.
You Might Also Like:
- Protecting Yourself Against Vacation-Rental Risks
- Travel Insurance 101: What to Know Before You Buy
- Worst Travel Mishaps (and How to Avoid Them)
This article was originally published by SmarterTravel under the title Eight Things You Need to Know About Travel Insurance.
Follow Caroline Costello on Google+ or email her at editor@smartertravel.com.
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