Everything you should know about travel insurance
Travel insurance can give you extra protection if your holiday doesn't go as planned. So you should make sure you have cover if you're planning a trip away.
While more and more people are traveling, you might be ready to book your next vacation, but it’s smart to consider buying a comprehensive travel insurance policy that will protect you from financial losses you may incur due to unexpected issues both before you travel and during your trip.
It's particularly important to take out travel insurance if you are traveling independently because you may find yourself stranded with no way to get home and no one to help sort out your holiday problem.
“Travel insurance is often an overlooked investment until the unforeseen happens,” says Beth Godlin, a spokesperson with Aon Affinity Travel Practice. “It’s designed to give travelers peace of mind and financial protection against the risks of travel.”
While some travelers decline purchasing travel insurance because they think it will be costly, Godlin says it doesn’t have to be expensive and notes “purchasing it adds an extra layer of protection and security.”
Read this article for more information on what you need to think about before you take out a travel insurance policy.
Travel insurance is obviously valuable for big-ticket trips, such as a luxury cruise, safari, or multi-city international vacation, but it can even be helpful when you’re staying closer to home. “When deciding if travel insurance is right for you, I suggest asking yourself what you could stand to lose if you had to cancel last-minute,” says Godlin.
Select spoke to experts in the travel insurance space to get their best advice on everything consumers need to know about travel insurance.
How can travel insurance benefit you? and What is typically covered by a standard travel insurance policy
Travel insurance can protect you against the following things going wrong:
- canceling or cutting short your trip for reasons beyond your control
- missed transport or delayed departure for reasons beyond your control
- medical and other emergencies
- personal injury and death
- lost, stolen, or damaged items, including baggage, passports, and money
- accidental damage or injury caused by you.
If you don't have travel insurance you will have to pay out of your own pocket to deal with a problem while you're away. Or you may lose money if you have to cancel a trip and can't get your money back. This could cost you thousands of pounds.
Travel insurance can vary, but policies generally provide coverage for three things: protection for your financial expenses, protection for your well-being and protection for your personal belongings.
When searching for a policy, look for the following benefits:
Trip cancellation coverage
Your travel insurance policy can reimburse you for prepaid, non-refundable trip deposits if a trip is canceled for a covered reason. These outlays can include airline tickets, hotel rooms, rental cars, tours and cruises, says Daniel Durazo, spokesperson with Allianz Travel Insurance.
Examples of acceptable reasons to cancel a trip include illness, injury or death of the traveler, a close family member or a traveling companion; military deployment or civil unrest; a serious family emergency, even unplanned jury duty.
Other reasons include: your travel supplier stops offering services for 24 hours due to a natural disaster, severe weather or a strike, your home or destination becomes uninhabitable or you or a traveling companion lose your job after you purchase your policy.
You typically can’t cancel your trip for any reason and expect to be reimbursed just because you have travel insurance. For example, if you have a fight with your friend and don’t want to travel with her, or you change your mind about taking a long-haul flight to Hawaii, these are not covered reasons.
If you want the highest level of flexibility to make changes to your trip, consider adding “cancel for any coverage” to your policy. Cancel For Any Reason (CFAR) plans will bump up the cost of your travel insurance by about 40%, but it gives you latitude to cancel your trip if you need to as long as you meet certain requirements like canceling no later than 48 hours before your scheduled departure.
You won’t be reimbursed for 100% of your trip costs. Typically, CFAR coverage will reimburse between 50 to 75% of trip expenses.
Trip delay coverage
Should you experience a hiccup in your travel itinerary, your travel insurance policy can provide some financial relief.
“Travel delay coverage provides reimbursement if a traveler is delayed for one of the policy’s covered reasons,” says Megan Moncrief, spokesperson with Squaremouth. “This benefit will typically reimburse for expenses such as food, lodging and local transportation that are incurred during the delay.”
Covered reasons will generally include severe weather, airline maintenance or civil unrest.
There’s often a waiting period before your benefits kick in.
“In order for a traveler to become eligible for this benefit, they must be delayed for the amount of time listed on their policy,” says Moncrief. “Some policies are very lenient and provide benefits available for any length delay, while other policies will specifically list a length requirement. This typically ranges from three to 12 hours. All travel delay policies will come with a daily limit, as well as a policy limit ranging from a couple hundred to a couple thousand dollars.”
Daily limits typically range from $150 to $250 per traveler, while the policy limit can range from $500 to $2,000, Moncrief says. It’s very important to save all your receipts as you will be required to submit them with your reimbursement claim.
Trip interruption coverage
Should you need to cut your trip short due to illness or injury you experience during your trip, or if there’s a family emergency back home, your policy may reimburse non-refundable expenses you forfeit if you return home early.
Your policy may also cover the cost of a one-way economy airline ticket home. Not all reasons are covered, however. For example, if your beach vacation is a wash out or you miss your new puppy, your trip interruption benefits won’t apply.
Medical expenses and emergency-evacuation benefits
If you’re traveling within the U.S., your personal health insurance should cover any illness or injury you sustain while you are on a trip. But if you’re traveling to a foreign country, your U.S. based health plan will provide zero or very little coverage, and Medicare isn’t accepted abroad, so it’s good to sign up for additional coverage.
“Domestic health-care plans are usually not accepted outside the U.S., so it’s especially important to get travel insurance with medical coverage and emergency medical transportation when traveling internationally,” says Durazo. “If you do become ill or injured while traveling, these benefits can cover your medical costs including doctors’ fees and hospital costs.”
In addition, your travel carrier’s customer support hotline can help. “Allianz’s 24/7 assistance team can coordinate your care with the doctors treating you in your destination, as well as ensure you’re at an appropriate medical facility up to U.S. standards,” he says.
Even more expensive than medical treatment is an emergency medical evacuation, something the right travel insurance policy can arrange and cover. “Medical evacuation and transport costs range from $15,000 to $200,000+, depending on the traveler’s health condition and their location in the world,” says Durazo.
“If you’re heading overseas, you’ll need the additional protection of emergency medical benefits and emergency medical transportation benefits,” he adds. “And if you’re visiting more remote areas, there’s always a chance you may need emergency medical transportation to get you to an appropriate health care facility.”
Baggage loss
Should your checked baggage take a detour and not arrive at your destination, your travel insurance policy could be a saving grace.
“If your travel insurance plan includes baggage benefits, your insurer can reimburse you, up to the maximum shown on the Confirmation of Coverage, for covered loss, theft or damage to your baggage and personal items,” says Durazo. “Every plan has specific coverage limits for each benefit, which are outlined in the plan documents.”
For example, Allianz Partners’ OneTrip Prime plan, covers baggage loss up to $1,000 and baggage delay up to $300 while the OneTrip Premier includes up to $2,000 in baggage loss/damage and up to $600 for baggage delay.
Your personal possessions are also covered if lost or stolen while you’re traveling. “Travel insurance can reimburse you for the actual cash value, repair or replacement — whichever is less, based on the limits in your insurance policy’s letter of confirmation,” says Durazo.
You must report losses to your airline, airport, police or other relevant authority like a tour operator or hotel manager. You will need this documentation when you file a claim.
Not all items are covered by your travel insurance policy. For example, cash is not reimbursable, and many policies won’t cover very expensive jewelry, art, antiques or heirloom items. To reduce the risk of losing irreplaceable items, don’t bring these items on vacation. And make sure to read your policy carefully to see what is covered.
How to find an insurance carrier ?
Purchasing travel insurance is relatively easy, and there are lots of different options in the marketplace. If you have never purchased a travel insurance plan, a good place to start are sites like InsureMyTrip.com, CoverTrip or Squaremouth, which lets you compare different carriers based on both price and coverage. You simply fill out a brief questionnaire about the trip and the traveler.
The benefit of using aggregator sites is shoppers have the ability to view the entire travel insurance marketplace and compare policies all in one place. Squaremouth also provides verified customer reviews to help travelers feel confident about the policy they are purchasing.
There is no charge to use Squaremouth, as they receive commission on every sale directly from the provider, and do not charge any type of fee to consumers.
Beyond comparison sites, you can always visit a specific travel insurance carrier’s website for a quote or call the company’s toll-free customer service number for information.
If you’re using a site like Expedia, for example, to book your reservations, you usually have the option to purchase travel insurance, too, through a third-party provider. You should make sure to carefully review the full details of the policy, because the plans are based around the trip elements (hotel, flight, rental car) and could differ every time you book, and you want to make sure you’re understand what you’re getting.
Where can you buy travel insurance?
Travel insurance is widely available. You can buy it from:
- insurance companies
- banks
- retailers and supermarkets
- travel agents
- online comparison websites
- holiday companies.
Sometimes, travel insurance might be included as an extra service offered through your bank account or credit card. You should check how much you're paying for this and what kind of cover it offers. For example, cover may be limited for your spouse or partner. It might be better to buy a stand alone policy.
Your travel agent may offer you travel insurance as part of a package holiday. You can opt for this if you want to but you don't have to buy this insurance. The travel agent is breaking the law if they try to make you take it out or charge you more for your holiday because you refuse to accept it. If this happens, you should get advice.
Tips Before Buying Your Travel Insurance
Again, I must stress that I am in no way, shape of form, qualified to give financial or insurance based advice. These tips are purely from my experience booking travel insurance for myself over the last 10 years or so.
I recommend that you seek out your own professional advice if you are still unsure about what policy is going fully cover you for your whole trip and everything you do while you are away.
It's important to get the right type of cover for your needs. Think about:
1. Get the Duration Right
It might sound pretty simple, but, when you are calculating how many days you will be away, make sure you get this right.
If you miss calculate and are away for one or more days more than your policy covers, this automatically makes it invalid. Attention to detail is so important here!
More insurance websites will allow you to put in the date you leave and the date you return so you can avoid this mistake. Just make sure you input the actual date you land at home. If you are flying over time zones, you may arrive home a day after you left.
.2. Ensure All Your Destinations Are Covered
If you are visiting more than one country, be sure to check that every country you are visiting is included in the policy you intend to visit.
Usually when you book you are asked which country you will spend the most time in. Not always are you asked for every country. If in doubt, call the insurance provider and ask before booking online.
3. What’s a Pre-Existing Medical Condition?
To this day, I am still a little confused about this one. You see, I have asthma and have had it since I was a child. It’s not chronic like it was when I was a kid, but I still take daily medication. So to me, that means I have a pre-existing medical condition, which under most policies, won’t be covered unless you declare it and in some cases, pay extra.
However, most insurance providers have a list of pre-existing medical conditions that are covered because they are lower risk. Asthma is usually on that list.
It’s important to be honest with your insurance provider about any ailments you may have. If you’ve been seeing a chiropractor for a back problem, they need to know about that. If your back goes on you while you are away and you need to seek medical care, you’ll cop an expensive bill if you are not covered.
And don’t think you can get away with not declaring something. If you need to make a claim while you’re away, the insurer has the right to request access to your medical records. If they find out you didn’t declare your pre-existing condition, this will likely void your policy.
4. If There’s An Element of Danger, You’ll Need Extra Cover
Planning to go bungee jumping, sky diving or horse riding or skiing? Be sure to check that a standard, off the shelf type policy will cover you for these activities.
Some insurers won’t cover you are all for some of the really high risk activities, however in most cases, you will just have to pay a little extra to ensure that you are covered should the unfortunate happen.
Call and check with your insurer before you book if you are unsure.
5. Make Sure You Can Afford the Excess
Like with any other insurance policy, an excess applies to any claims you might make. For example, say your bag never arrives at your destination and you file a claim for $2,000 to recoup the costs. If the excess is $500, this means you pay $500 to replace your items and the insurer will give you the remaining $1,500.
The lower the excess the higher your policy will be. The higher the excess the cheaper the policy will be. But don’t decide to just go with a higher excess just because the policy is cheaper. It is more important that you know you can afford the excess.
6. Are All of Your Belongings Cover?
In most cases, yes, everything you take with you on your trip is covered. However, if you travel with expensive camera equipment or jewellery (I don’t recommend taking expensive jewellery on your trip), it may not be covered unless you declare it to the insurer.
In some cases you may need to pay extra to cover these expensive items.
Some policies will also show you an amount you can claim up to for your belongings. If you calculate that your belongings are worth more than this, then you may need to keep looking for a policy that will cover you.
One thing I’ve heard more and more recently is insurers not covering mobile phones. How many stories have you heard of friends and family going for a swim with their mobile phone while on holiday. Or leaving it on the restaurant table for pickpockets to easily grab on their way past.
The amount of claims people make for mobile phones has sky rocketed over the past 10 years, which has turned some insurers off covering them.
7. Report Any Type of Theft IMMEDIATELY
Got your wallet pinched from your back pocket? It sucks I know and you probably just want to get on with your holiday and worry about claiming your losses late. But for most insurers, if you don’t have an official police report outlining what happened, you won’t be able to claim for it.
There are terms to this also. In most cases you will need to file the police report within 24-48 hours. So don’t wait around feeling sorry for yourself, get to the nearest police station, report your theft, get your report and then get on with enjoying your holiday.
8. Don’t Miss Your Flight!
Whether it’s your fault or not, missing your flight, usually isn’t covered on your policy. And even if it is covered, you will have to have solid proof that you made every effort to get to your flight on-time.
Leave home with plenty of time. It is more inconvenient to miss your flight than to spend a little extra time before your flight in the airport.
If you are that way inclined and find yourself running late often, I would recommend checking with your insurer on this policy before you leave home so you know what you are and aren’t covered for.
9. Buy Your Policy Early
Don’t leave buying your travel insurance to the last minute. There are two reasons why I recommend buying early.
Firstly, if you leave it to the last minute, you are most likely to forget or not have enough money left to pay for it, and therefore won’t be covered.
But the other reason is that if something, like illness for example, occurs before your trip and you have to cancel, you will be covered to a certain extent. Ensure you check what exactly the policy covers in these cases before you purchase.
Conclusion: Choosing the right insurer
I'll say it again, DO NOT SKIP BUYING TRAVEL INSURANCE, it is the most important thing you will buy for your trip and could save you hundreds of thousands of dollars should the unfortunate happen.
The cheapest policy may not offer best value for money, so it's important to check what the policy includes as well as how much it costs.
You can check what different policies offer and how much they cost by using an online comparison website. However, comparison websites usually only offer general cover. If you have particular needs, it may be better to find an insurer that offers specialist cover.
References and Sources:
Everything you need to know about travel insurance before you book your next trip
Travel insurance
Things to Look Out For When Buying Travel Insurance
10 Best Travel Insurance Companies in February 2023
