Whether you've planned a quick weekend getaway or booked the trip of a lifetime to a resort located halfway around the world, nothing can ruin travel plans faster than a cancelled flight, last-minute illness or lost luggage. Travel insurance can’t prevent unfortunate events from occurring, but having travel insurance can reduce the financial bite. However, all travel insurance plans are not created equal, and in many cases, purchasing travel insurance involves taking on unnecessary expense.
Trip Cancellation and Interruption
Travel insurance policies often cover trip cancellation by the airline or due to documented illness of the travelling passenger. However, many policies do not cover trip cancellation due to so-called Acts of God, or for illnesses that do not require hospitalization. Other policies provide coverage for trip interruption or delay due to missed flight connections and other circumstances. It's important to read the fine print to ensure that the policy you purchase provides the coverage you want.
Luggage Loss and Delay
Airline liability for lost luggage is limited, and often does not cover the cost of the clothing and personal effects packed inside. Travel insurance often includes coverage for financial compensation for lost luggage. Other policies include lower amounts of compensation for delayed luggage, to allow policy holders to purchase changes of clothing.
Lost or Stolen Passports, Credit Cards and Cash
A lost or stolen pocketbook or bill folder is always upsetting, but even more so when you're away from home. Many travel insurance policies provide emergency assistance for policy holders to obtain replacement passports and cancel lost or stolen credit cards. Some policies also provide cash advances – which must be repaid once policy holders return home.
Many travelers are dismayed to learn that their domestic insurance policies don't cover the cost of medical care abroad. Other domestic policies do provide coverage – but only as reimbursement, requiring individuals to make initial payment out of pocket. Travel insurance policies that cover medical emergencies provide up-front payment for medical treatment, sparing policy holders the need to pay large medical bills. If you are confined to hospital, many policies will pay for a friend or family member to travel to your location to assist you.
Many travel insurance policies provide services beyond the basics. Such services vary by policy and may not be applicable to certain types of trips.
- Car Rentals
- Travel Companion Benefits
- Free Child Coverage
- Concierge Services
- Legal Referrals and Bail Bond Assistance
- Emergency Evacuation
Do You Need Travel Insurance?
In general, if you are traveling overseas or have booked a domestic vacation with a total cost of 5,000 dollars or more, purchasing travel insurance makes sense. By contrast, the limitations and exclusions associated with many travel insurance policies make such policies less worthwhile for low-cost domestic flights, unless coverage specifically includes reimbursement for nonrefundable fares. However, obtaining quotes is easily accomplished online, for no cost. Nearly all policies allow for a full refund with a specified period – if no travel has taken place and no claims have been made. That gives you time to read the fine print to determine if the policy actually provides meaningful coverage for your trip.