Purchasing travel insurance is a very crucial step in your preparation for an abroad trip. While so many people tend to overlook this, wondering if it is worth it or when to get it. When visiting any country abroad, you should be able to financially cover sudden costs associated with traveling such as medical services in case of an accident or injury.
Therefore, deciding whether travel insurance is essential and when to get it, probably depends on what you can afford to lose. For instance, if you’re spending hundreds or thousands of dollars to book a trip abroad, it might be necessary that you buy travel insurance.
It protects your investment for a trip from unnecessary and unexpected financial loss in the event that you have to cancel or cut your journey short for many reasons including weather, illness, government shutdowns, and more. Which may leave you with a huge loss or bill you cannot afford.
However, in this article, we will provide information in full detail about travel insurance, what it covers, the pros and cons, of purchasing travel insurance, the best insurance companies, and any other important information pertaining to what you should know about travel insurance.
What is Travel Insurance?
Travel insurance is a type of insurance product that provides financial coverage for unforeseen losses incurred while traveling, either internationally or domestically. However, most basic travel insurance policies generally cover only emergency medical costs while abroad. But other comprehensive policies typically include coverage for lost luggage, flight delays, trip cancellation, and other possible expenses.
However, it only provides financial coverage for expenses incurred from unexpected events that occur after the insurance policy takes effect. Therefore, it does not provide coverage for already or pre-existing medical conditions like diabetes, pregnancy, etc.
Moreover, some insurance policies may provide coverage for damage to personal property, rental equipment like cars, etc. And even ransom requests. Travel insurance coverage most times may include 24/7 emergency services, such as re-booking canceled flights, replacing lost passports, cash wire assistance, etc.
Understanding Travel Insurance
Furthermore, travel insurance is risk-based, that is to say, that it takes into account a range of certain factors which evaluate and determine whether an individual can buy a policy. These factors generally include the destination countries or regions, duration of the trip, age of the travelers, rental vehicle excess, pre-existing medical conditions, etc. Also, some policies will also take into account the traveler’s estimated value of his/ her trip in order to determine the price of the policy.
However, a policy may be single trip insurance, which covers only the exact duration of an upcoming trip. Or it can be a multi-trip policy that can cover an unlimited number of trips of a limited duration within a year. Depending on the type of insurance product, a travel insurance policy must be bought prior to the departure or from the first departure point, such as an airport.
Moreover, the conditions and type of coverage policies offer often vary, and this depends on the product or brand. Besides, some policies may provide coverage for one-way travel for people that are relocating permanently to another country. However, a smaller number of brands often offer insurance to travelers who are already abroad and forgot to buy travel insurance or have one that has already expired.
What Does Travel Insurance Cover?
Depending on the insurance plan you choose, most travel insurance policies do offer coverage for a broad range of possible losses. Although the coverage can change from one company to another, below are the most common coverage offered by most travel insurance plans.
Medical coverage can help reduce losses with medical expenses, in case of a minor injury or illness abroad. It offers financial coverage for visits to general practitioners, medicine, ambulance fees, etc. Most comprehensive travel insurance policies may include emergency companion coverage. This means that a family member or relative can stay with the insured person while receiving treatment in the hospital abroad.
Trip Cancellation/ Interruption:
This type of coverage reimburses the traveler for any form of fees, non-refundable travel expenses, or lost deposits relating to cancellation or delay of the insured person’s trip incurred due to certain unexpected circumstances. However, the most common reasons are illness, the death of an immediate family member, natural disasters, and bad weather.
This type of coverage protects the travelers financially from loss, damage, or theft of personal effects including passports and travel documents during a trip.
Other forms of coverage may include:
- Public liability
- Accidental death or flight accident coverage etc.
What Your Insurance Might Not Cover
Moreover, there are certain circumstances where the insurance company will refuse to provide coverage. Certain countries or parts of countries where there’s a greater risk might be excluded. Also, certain events which have a low possibility of occurring such as pandemics, terrorism, acts of war may also be excluded.
However, other common exclusions may include the following:
- undeclared pre-existing medical conditions
- unlicensed operation of a motorcycle
- traveling for the purpose of receiving medical treatment
- elective surgery or treatment
- Injury or illness caused by reckless activity such as careless driving, use of alcohol, use of recreational drugs.
- leaving belongings unattended
- participating in high-risk sports & activities (such as scuba diving, extreme sports)
- traveling against government advice and recommendations
Purchasing a Travel Insurance Plan – Guidelines on How to Choose The Best
There are no best insurance plans, you just have to dig around and find the one that best meets your specific needs. Besides, travel insurance will vary by the provider on cost, exclusions, and coverage. So it’s better that you take your time and look around for the one that fits into your budget and also meets your needs.
Moreover, just like we mentioned earlier, travel insurance coverage is available for single and multiple trips or travel. The single trip covers one exact travel while multi-trip coverage protects numerous travels that occur in one year, but none of the excursions can exceed 30 days.
Furthermore, insurance premiums are evaluated based on certain factors. Such as the type of coverage, traveler’s age, destination country or region, the estimated cost of your trip, etc.
What to Consider When Purchasing Insurance
However, to cut things short, when planning to purchase travel insurance. It is important that you first put into consideration the following features:
- Make sure that you buy the insurance policy from a reputable insurance company
- Know what is covered and what is not covered in your insurance policy
- Research online and get insurance quotes from several insurance providers or companies. This is to get the coverage and also at a cost that meets your budget and needs
Meanwhile, when purchasing travel insurance or any other form of insurance policy, you should first evaluate and decide how much coverage you need. When we say evaluate, we mean that you should consider your destination, the duration of your stay, valuable items you will be taking with you, etc. Therefore, you should choose a policy that covers at least lost luggage, medical services, cancellation, etc. for your trip.
Moreover, note that not all insurance cover every destination. As result, make sure that you find out if the policy covers your country of destination. Finally, make sure that you purchase the insurance policy as early as possible. So you will get coverage for any financial losses, in case you need to cancel.
How Does it Work?
Furthermore, here’s an overview of how travel insurance for abroad trips work.
Firstly, you will need to purchase an insurance plan:
- Get an insurance quote from a reputable insurance provider company.
- Read the fine print.
- Complete the travel medical insurance application.
- Receive a Certificate of Insurance.
Then, if any of the unfortunate events or incidents coverage under the insurance plan occurs, you can file a claim with the insurance provider. However, you will need to provide all the necessary documents you can get to prove the claim. Then, the insurance company will consider it legitimate and will reimburse part or all of the costs. Which typically depends on the policy agreement.
Moreover, you should contact the insurance providers to confirm the documents that you will need to make a claim. Make sure you do this before departing for your trip. Remember to read the insurance policy to know the steps you are required to follow to make a claim.
How much does travel insurance cost?
Travel insurance is risk-based, the insurer takes into account certain factors. Which determines if a traveler can purchase a policy and what the premium (price) will be. These factors may include destination countries, the age of the travelers, the duration of the trip, etc. However, most insurance policies will take into account the estimated value of the traveler’s trip to determine the price.
However, the cost of your plan will be between 4% to 12% of the estimated value of your trip. Therefore, the more expensive trips cost more to cover. As the insurance company will have to reimburse higher if the trip gets canceled or any other incident covered in the policy occurs.
Pros and Cons
However, there are a number of advantages and likewise disadvantages for having travel insurance while on a trip abroad. Therefore, in this section, we cover the pros and cons of the best travel insurance plans.
- It covers overseas medical expenses which may not be covered under your local health insurance plans.
- It also offers personal item loss and theft protection
- Loss from travel delay such as non-refundable travel expenses can be reimbursed by travel insurance policies
- Even when you get injured while on a trip abroad. Some travel insurance policies will cover your expenses for a period of time due to your loss of income.
- It also offers vehicle rental protection. Most tourists usually choose to hire a vehicle to ease their exploration and movement while on a trip.
- Moreover, you can access 24/7 emergency assistance while overseas, as accidents and unforeseen events can happen at any time.
However, there are not many serious factors that can be the disadvantages of purchasing travel insurance. Only that the insurance policy will not cover everything. Not every destination will get coverage from the travel insurance policy. There are exceptions for such parts of countries or regions where there might be greater risks.
Moreover, other events that might not be covered in the policy include ones that result from actions such as reckless behavior, change of mind, etc. Other disadvantages of travel insurance may include unexpected costs.
Top Travel Insurance Companies
Having travel insurance is a smart way to protect against sudden incidents when you have a lot of investments for a great trip. While the best travel insurance policies provide exciting coverage at an affordable rate. They also have a few limits and exclusions, likewise different levels of customer satisfaction ratings.
Besides, when or before purchasing a travel insurance policy. It is important that you research and ensure that you get the policy that meets your needs and at your own budget. Therefore, in this section, we have outlined the best travel insurance companies of 2021.
- Travelex: Best overall
- Allianz Travel Insurance: Runner-up (second place) , best overall
- InsureMyTrip: Best value
- World Nomads: Offers the most comprehensive coverage
- HTH Travel Insurance: Best for seniors
- Nationwide: Best for cruises
- GeoBlue: Best for medical coverage
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