Do I Need Travel Insurance

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Determining whether you need travel insurance means first determining what that phrase means to you. Travel insurance is a confusing term because it can mean a variety of things. Broadly speaking, you might seek insurance to cover any or all of these areas:

  • Trip Cancellation
  • Medical Service (Routine or Emergency)
  • Medical Evacuation
  • Lost baggage
  • Rental Car and Liability

In this post, I’ll go over each of them to help you decide if you need travel insurance.

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Image courtesy of Photobyphotoboy via Adobe Stock

Trip Cancellation

Trip cancellation insurance covers the costs associated with canceling or cutting your trip short. This is typically due to either issues with your health or that of an immediate family member. Payments can cover costs from a pre-paid package trip, airline tickets to get home, and cancellation fees for activities or lodging. As with all insurance policies, read the “fine print” to see what constitutes a health issue and who counts as a family member.

This type of insurance makes more sense when you purchase it well in advance of the trip. Booking plane tickets for a trip nine months from now, for example, you may want to consider getting cancellation insurance. Airlines frequently offer cancellation insurance as an add-on fee. But read the fine print and crunch the numbers. Only purchase the insurance if the fees are less than the change fees on the tickets or trip package.

Medical Services

Getting sick sucks. Getting sick or injured while on vacation is worse. Take a look at your existing health care insurance plan. Make sure it provides coverage while you are traveling overseas. Make sure it doesn’t exempt the kinds of activities that you plan to do while traveling (African safari, scuba diving, trekking).

If you’re covered, great. Write down any international contact numbers that you’ll need to reach your insurance company and move on. Otherwise, you might want to consider getting additional coverage, either through your existing company or a travel medical insurance specialty company.

Medical Evacuation

There’s medical care and then there’s medical evacuation. If you have to be airlifted by helicopter from a remote location to a city with decent medical care, that procedure can cost tens of thousands of dollars. Is that covered under your existing policy? Is it a likely occurrence?

All insurance is a way to manage risk. If you’re traveling to a major metropolitan area, like Sydney or Barcelona, you probably don’t need this. If you’re going to an extremely remote location and/or doing highly dangerous activities, you may decide it’s worth the expense.

Lost baggage

Your airline carriage contract provides coverage in cases of lost luggage but it is likely limited to a maximum of $200-300 per bag. If you determine that this will not cover replacing all of your belongings, you may want to consider a lost baggage rider. Similarly, you should look at your existing homeowner’s policy to see if it covers replacing high-value items like cameras, phones, and computers while traveling.

Rental car and liability

Do you plan to rent a car while on vacation? Insurance fees can quickly add up and even double the cost of the rental. Before you sign the rental car agreement, check with your existing car insurance provider and your credit card company. You may already have full or partial liability coverage through them. Make sure you know what is required to maintain that coverage – for example, do you need to have an international driver’s license? Is the policy voided when you drive off-road?

Travel Insurance Providers

Below are links to several providers that specialize in travel insurance. I’m not endorsing any of them, just providing information. You should definitely do your own research and determine whether you need travel insurance.

For more travel tips, check out Travel With Kids: How to Travel With Kids Without Losing Your Mind.

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