Why You Need Travel Insurance for Your Health, Flight, and Property
|Don't forget flight insurance.
The decision to buy insurance for your trip is a very personal one. Some travelers never consider insurance for their travels, while others want to make sure that they are covered for every imaginable incident. Basic travelers’ health insurance is advisable for most travelers, but other benefits, such as theft or flight delay coverage depend on the type of trip you are taking. Budget travelers rarely get insurance coverage for their baggage, but if you are traveling with a laptop computer, an expensive camera, or other valuable items, it might be a good idea to purchase insurance.
Age and previous travel experience no doubt influence travelers’ decisions about getting insurance. I have met few travelers in their twenties who were concerned about travel insurance. I have personally realized that the more I travel the more likely it is to lose a bag during a flight, to have items stolen, or to have unexpected medical expenses. Over the years I have suffered the loss of two laptop computers, three SLR cameras, various backpacking gear, stolen credit card information, and minor bouts of illness. These experiences haven’t made me a cynical or traveler, but they have made me realize that accidents can happen to anyone and that some basic travel insurance can be quite useful.
Finding the Right Coverage
Insurance for travelers can be a confusing issue. There are so many types of coverage and policies, and prices vary so drastically that it is difficult to make the right choice. In my experience, it is best to choose from one of the larger travel insurance companies, or choose one with either a good reputation or that someone you know has recommended. It is also a good idea to compare different types of coverage and prices, such that you know you are getting the best possible policy at the best price for your particular needs. There is unfortunately no away around reading all the fine print, since this is where you really find out your actual coverage. Also, try to find out what other services the company offers, such as 24-Hour Travel Assistance, or Emergency and Medical Assistance by telephone or online. Such telephone or online services can be very helpful, especially when you are unable to make arrangements for medical treatment on your own or need other travel-related help, including emergency funds. Some insurance companies will even arrange for direct payment of medical treatment or hospitalization if you contact their emergency service, in which case you won’t have to front the expenses. In most cases you will only be able to file a claim once you are back at home. This means that you need to make sure that you fulfill all the requirements for filing a claim, such as receipts for medical treatment or police reports for stolen items.
To determine the type of insurance you need for your trip, you should first find out what coverage you already have. Find out the details of your health insurance, homeowner's or renter's insurance. Your health insurance company may reimburse you for medical expenses abroad, and your homeowner’s insurance may already include theft coverage. Also check the benefits of your credit cards such as flight delay, trip cancellation, lost or delayed baggage, collision damage waiver for rental cars, accidental death and dismemberment coverage, and purchase protection. American Express for example, offers a Global Assist Hotline for its credit card holders, which provides destination information, as well as help with emergencies while you travel, such as lost baggage, medical prescriptions, emergency cash, etc. Sometimes it is cheaper to add coverage such as traveler’s health insurance or baggage insurance to an insurance policy you already have as compared to purchasing coverage from a different company.
When You Need Travel Health Insurance
There are many types of health insurance policies for travelers. The kind of trip you are planning often determines the type of health coverage you should get. To sort through the maze of available policies, you should first determine your needs. How long will you be traveling and what are your primary activities? There are now many specialized policies available, such as insurance plans for couples, families or small groups, and policies for extreme sports and athletes. If you are planning to go hiking, mountaineering, or descend a jungle river in a canoe, it might be a good idea to get comprehensive health coverage that includes Air Ambulance and Emergency Medical Evacuation.
To select the traveler’s health insurance policy that is best for you, it is likewise necessary to clarify the often vaguely described details by carefully reading the contract. If in doubt, call the company before signing up and make sure that all your questions are answered. Most insurance companies provide a variety of plans which offer you a choice from a selection of fees, deductibles and covered services. Normally, the higher the deductible in your insurance plan, the lower your cost for the coverage, and vice versa. Find out the details on how to proceed in case of hospitalization or for a possible emergency evacuation. In such an event you usually have to notify the insurance company as soon as possible. Make sure you get all the documentation you need for your insurance claim, such as bills for medical treatment and medication.
If you are traveling to a country with few health threats, you might want to consider a policy that only covers medical emergencies such as hospitalization. On the other hand, if you are planning a trip to a tropical or developing country where many infectious diseases might be present, you might want to consider a type of coverage that includes doctor’s visits and medication in addition to medical emergencies. I have traveled in many tropical countries, and several times I had to see a doctor for minor health problems. If your insurance does not cover doctor’s visit, you can go to a clinic that is part of the public health system, where treatment is usually very affordable. But if you prefer seeing a private doctor or a specialist while traveling, the cost for treatment might go up significantly, and you might want to choose a policy that includes doctor’s visits as well.
Trip Cancellation Insurance
To be covered against an unexpected trip cancellation and have your expenses reimbursed, you can sign up for a trip cancellation policy. Travel agents routinely offer this type of insurance, but you can also choose it as an option with a comprehensive travel insurance package. Some credit card companies also offer this type of coverage for a low fee, if you charge your airline ticket to their card.
Flight Delay or Lost Baggage
This type of policy will pay you a lump sum in case your flight is cancelled or delayed or if your baggage is delayed or lost. Flight Delay or cancellation coverage is especially useful for short-term travelers who will lose a day or more of their vacation if their trip is interrupted by a delayed or cancelled flight. Delayed or lost baggage coverage is also useful, since it reimburses travelers for the cost of items they had to purchase while waiting for their delayed baggage. Keep in mind that the airlines’ liability for delayed or lost baggage is very minimal, and that only additional insurance can guarantee that the full value of your lost items will be replaced. Many comprehensive travel insurance packages include this type of coverage together with health insurance. Even if you pack simply and travel lightly, the replacement cost of lost baggage and its content is usually quite a bit higher than the compensation offered by airlines. A nice backpack or suitcase can easily cost several hundred dollars. Just adding the replacement value of clothing and personal items can easily exceed the amount paid by airlines. Airlines in the U.S. have a much higher liability limit for domestic flights than for international flights. The limit for lost, delayed or damaged baggage is $3,000 per passenger on a domestic flight, compared to $9.07 per pound on international flights, or about $450 for a 50 lbs. bag. You can buy excess valuation insurance from airlines, but it only covers the loss of baggage, and not damage. Just as with standard airline liability, cameras, computers, jewelry, etc. are not covered.
Baggage and Personal Effects
In contrast to the above-mentioned Lost Baggage coverage, which is only valid for flights, this type of coverage is much more comprehensive. It covers your baggage and personal belongings against loss, damage, and theft, while you travel, including items not covered by the airlines’ lost baggage liability, such as laptop computers, cameras, etc. Make sure you get coverage high enough to cover all your valuable personal items. Read all the fine print to find out what items are covered, before you buy a policy. This may take some time, but it is worth it. Keep in mind that that there is often a deductible for this type of coverage.
To make it easier to file an insurance claim you should document any valuable items you are taking by means of photographs. Gather the original purchase receipts, and keep them handy for when you return. While traveling, collect the receipts of the purchases you make, and keep them with you (don’t check them with your baggage). Also, find out exactly what additional documents you need to file your claim. Be prepared to make a trip to the local police station to file a theft report. Ask the local tourist information center where you can file a report, or read the section on travel safety in your travel guide. Brazil, for example, has three different police forces, but only one handles theft.
For short-term travelers, comprehensive travel insurance is fairly affordable. But those who travel for several months might want to consider medical coverage with lower benefits and a higher deductible to keep down costs. Basic medical coverage with a US$1,000 deductible might cost US$14 per person per week, which is very affordable, but any additional coverage will significantly raise the cost of insurance. For example, a premium travel insurance package, with comprehensive trip cancellation or delay, baggage delay or loss, theft, accident and sickness medical expenses for a two-week trip to Europe can cost US$80.00, and the same coverage for a three-month trip is in the US$500 range.
When on a paid vacation, short-term travelers generally have a job to return to, whereas long-term travelers often don’t have as much disposable income and need to budget their expenses more carefully. There are also low-cost insurance policies especially tailored for students, and if you fall into this category you should contact student travel agencies and find out about the types of insurance they offer. For example, a three-month travel insurance policy for Europe offered by STA Travel starts from anywhere from US$150-US$300 depending upon where you are going. Worldnomads offers a comprehensive set of travel insurance offerings for long-term travelers at a reasonable price, and is a favorite for many taking around-the-world-trips.
The best travel insurance coverage is the one with which you feel safe and comfortable. There is no point in saving a few dollars on coverage only to spend your trip worrying about health and belongings. If you take a little time and research the different options, it should not be too difficult to find coverage that fits both your insurance needs and your budget.
For a list of companies that offer travel insurance, see our Insurance for Travelers and Expatriates directory where you can find other articles on various aspects of this important issue. The U.S. State Department provides a list of travel medical coverage providers.