Explain Travel Insurance
Vacations can be grand adventures, but they are also an investment. Your tickets, accommodations and rental car can cost thousands.
Many of these costs are either non-refundable or are refunded at a discount.
Travel insurance is designed to reimburse you for loss and defray the expense of unexpected events, such as an unplanned hotel stay due to a weather delay.
Travel insurance varies by carrier so be sure you are clear on what is exempted from coverage. Typically a basic comprehensive travel insurance policy reimburses you financially for trips that are interrupted, delayed or canceled due to bad weather, illness, or baggage loss or delay.
It provides you with medical insurance and medical evacuation coverage should you become injured or ill while on vacation and includes a 24-hour assistance line to help you contact a doctor or your family in the event of an emergency.
Before you purchase travel insurance, find out what coverage you already have with existing insurance that may be duplicated by your travel insurance. For example, if you are planning an international trip, and your health insurance covers you internationally, travel insurance that covers your medical bills would be an unnecessary expense.
On the other hand, ensure that your health insurance covers medical evacuation. If it doesn’t, the travel insurance could be worth the expense depending on medical services in your destination country.
Some homeowner’s policies will cover losses suffered from lost baggage, but typically not at replacement value.
Commonly Covered Situations
Most travel insurance covers the most common types of problems. For example, if on the day of the trip your traveling companion has to cancel due to illness, travel insurance will reimburse you for the cost of your airline tickets, hotel deposits you may lose and any other non-reimbursable expenses you may encounter.
If you get into a car accident, it will cover your legal expenses. It covers expenses you may encounter if you miss a connection due to weather and need a hotel room.
If you purchase international insurance, it will cover the cost of a passport should you lose yours and cash up to your level of coverage should you lose your money.
Cost and Claims
Traveler’s insurance usually is charged as a percentage of the cost of your trip. For example if your trip is worth $2,000, the insurer charges three percent to six percent of that cost, which in this case is $60 to $120 for the trip. It will cover your expenses up to the actual amount spent.
Do not purchase more insurance than the cost of your trip. It will increase your premium and offer you no additional benefits. If you have a claim, most reputable companies have a 24-hour line for you to report it.
You must provide proof for anything you may claim, such as receipts for airline tickets or hotels. Make lists of what you have in your luggage so it can be replaced if lost. If you need medical assistance, keep copies of all documentation and receipts that were given to you.