People travel at different times to various destinations for reasons like enjoying vacations or holidays, medical reasons, business, and work-related needs. People relax, enjoy new environments, try new foods, and learn new cultures and even languages in these destinations. In most cases, travelers tend to take a lot of their time planning for trips to make them successful. Depending on the destination one wants to go to, the preparation phase involves some activities such as budgeting for the trip, booking a flight, booking a hotel room at the destination, packing enough essentials, getting a valid passport, and making document copies among others. One essential thing that most people forget about is to buy travel insurance. Travel insurance is generally essential when traveling overseas or abroad since it’ll help you when you least expect it, mainly when some financial losses occur during your travel period. Most travelers usually overlook travel insurance until unforeseen events happen. It’s mainly designed for financial protection and the traveler’s peace of mind. Most travelers ignore buying travel insurance since they think it’s very expensive. However, according to experts, the cost of purchasing travel insurance is relatively lower than the cost involved in unforeseen happenings during travel.
What is travel insurance?
This is a plan that travelers buy to protect themselves from financial losses, risks, and uncertainties in the course of their trips. According to global statistics, at least 50% of travelers are responsible for any losses they incur due to the lack of travel insurance when moving from one destination to another. Although domestic trips also need travel insurance, the rate is relatively higher for international trips. Most companies that sell travel packages to people usually provide an option for buying travel insurance. These policies ensure total coverage of any damage to property, 24/7 emergency services, rental equipment, and personal effects, among other costs. There are two broad types of travel insurance, i.e., vacation plans and travel medical plans.
Vacation plans
These insurance plans cover most aspects of a trip, including delays or losses, flight cancelations, luggage, evacuations, and medical emergencies. The increased popularity of vacation plans has been attributed to its broad coverage of the basic needs of travelers. According to data from travel insurance agencies, vacation plans form at least 94% of the sales made in travel insurance alone.
Travel medical plans
One common mistake that most people make when traveling is to get regular health insurance. Such plans usually have partial coverage or lack it completely, especially for trips abroad. However, travelers should get travel medical plans if they need proper coverage without any limitations. Most people who purchase travel medical plans are usually less concerned with other issues such as loss of luggage, flight cancelations, or even delays. This package mainly focuses on medical expenses and emergency evacuations. The best part about these insurance plans is that they also include coverage for those with pre-existing medical conditions and people traveling on a long-term basis overseas.
Apart from these broad categories of travel insurance, some specialty plans basically focus on a particular unique need. The common specialty plan is the evacuation plan that requires annual membership and emphasizes emergency evacuations alone. Another specialty plan is the accident plan, which provides coverage in case of a serious accident that leads to injuries, disability, and even death. Most travelers choose vacation plans because they cover most aspects in one plan. If you’re traveling to a particular destination as a group, you can consider purchasing a group travel insurance cover.
How does travel insurance work?
Travel insurance works by simply reimbursing travelers for any financial losses that occur during their trips. For one to get compensation, a claim must be filed and approved. When filing a claim, you’ll be required to submit evidence or proof that indeed a loss has occurred. The insurance provider will then verify your claims and compensate you depending on the kind of loss you’ve incurred, provided that it’s part of your travel insurance coverage. For instance, you may purchase a travel insurance policy that covers flight cancelation. However, before the material travel day, you may start experiencing breathing difficulties, nausea, and high fever. Upon visiting a medical practitioner, you’re advised to stay at home until you get better so that you can travel. Upon contacting the airline, you had booked a ticket with; the customer service representative tells you that there are few chances of getting a refund since it’s too late to find another traveler to replace you. In this case, since you’ve got valid travel insurance covering flight cancelation, you’ll be better positioned to get a refund on the total costs associated with the trip. Without travel insurance coverage, you’ll incur the cost whatsoever since you won’t get any refund. The reimbursement is done through a check, debit card, or direct deposit in most cases. Depending on the insurance provider, you may get fixed payments without certain rates for a certain duration or get the entire amount all at once.
What does travel insurance cover?
Travel insurance policies generally provide cover against financial losses, travelers’ personal belongings, and well-being. Below are some top things that travel insurance policies cover:
Trip cancellation
When booking a flight to a destination of your choice, it’s normal to pay the required flight fees upfront. These fees include flight tickets, rental cars, hotel rooms, and tours. Just before you travel, there are some valid reasons that may force you to cancel your trip, such as the death of a relative, illness, civil unrest, an unexpected call from your workplace, or other family emergencies. Apart from your personal reasons, flights are also canceled when the weather conditions are unfavorable, the occurrence of natural disasters, and uninhabitable flight destinations. Regardless of the reason, you’ll be fully reimbursed if you’ve got travel insurance. However, you must have these reasons included in your coverage. Insurance experts advise travelers to add cancel for any reason(CFAR) plans in their packages to have the flexibility of adjusting or making trip changes when necessary. You’ll get 50-75% reimbursement for your trip costs with such plans.
Luggage loss
There’s always a mix-up of luggage belonging to different travelers during trips. This mix-up can result in the loss of your luggage. If you’ve got a travel insurance policy covering baggage loss, your insurance provider will come in handy and reimburse you. Insurance providers usually have set limits on the maximum coverage for lost or damaged personal items in the luggage of travelers. For the damage or loss of personal items, the travel insurance provider will reimburse the replacement, repair, or actual value. You should check the list of items that are covered in the policy. This is because some items like jewelry, cash, and antiques aren’t reimbursable.
Trip interruption
Sometimes, you might be forced to cut your journey midway due to personal injuries, illnesses, or emergency situations at home. If you’ve got travel insurance coverage, you may get reimbursed even on non-refundable costs. Depending on the insurance policy you’ve purchased, you may also get all expenses back to your home covered. It’s therefore essential to check out with your insurance company the circumstances that can lead to trip interruption. This will help you avoid petty reasons which have low chances of reimbursement.
Medical expenses
Travel insurance has two categories of medical coverage, i.e., major medical coverage and short-term medical coverage. Major medical coverage policies cover long-term trips that take more than 6 months, whereas short-term policies cover trips taking 5 days and more. Both policies play a significant role in covering the medical expenses of the traveler, locating health facilities and medical practitioners, and emergency evacuations. The cost of these policies varies depending on the insurance provider. Therefore, before you decide to travel abroad, you must take time to determine if such policies apply outside your nation or not. This is because some countries restrict the use of such policies meaning that it’ll be invalid if you’re going to various destinations in such nations. You should avoid assuming what’s included and excluded to be on the safe side.
Trip delay
A travel insurance provider will reimburse you depending on the expenses you incur due to a delayed trip. Generally, the reimbursement will mainly be done on other items apart from your flight expenses. These items include local transportation, meals, and accommodation, which you’ll incur some costs before you actually travel. Trips are mainly delayed due to reasons like mechanical problems or maintenance of aircraft, severe weather conditions, civil unrest, etc. Insurance providers usually have guidelines on the waiting period that policyholders should wait before they can be reimbursed. Some providers give a shorter period, whereas others give a long duration that can run up to 12 hours.
Accidental injury and death
Accidents are prone to occur when traveling due to many things, some of which can’t be controlled by human nature. Therefore, insurance providers provide cover for accidental injuries, disability, and death. If you’re involved in a serious accident that leads to death, your travel insurance provider will reimburse your surviving beneficiaries. However, if someone dies as a result of other reasons like sickness, drug overdose, or sudden death, no benefits will be paid to your family members.
How to purchase travel insurance
Travelers can get these policies through insurance providers or brokers. Different travel insurance providers offer varied coverages at varied rates. Finding the best provider will help you get customized plans based on your travel needs. To purchase the right travel insurance policy, you should follow the following steps:
Determine the coverage you need
To determine the required coverage for your trip, you should consider some aspects like the destination you’ll be visiting, length of stay, your travel belongings, and activities you’ll take part in the destination. Experts recommend travel insurance policies that incorporate lost luggage, medical assistance, and trip cancellation. When deciding on the medical travel insurance to get, avoid any cheap policy you come across since there are higher chances that the policy is basic, thus having limited coverage. On the other hand, if you’re going for an expensive trip, you should ensure the policy covers as many cancellation reasons as possible. In this case, it’s also advisable to get a policy with a higher premium.
Research online
You’ll get a lot of comparison websites on the internet where you can easily compare and choose the best travel insurance policy. You should compare the policies based on coverage and premium rates. It’s also essential to research the most reputable insurance providers and choose one from the list. You should avoid insurance providers who don’t give enough details about their policy coverage and generally how they operate. You can also check their website’s comment section or reviews to see the kind of response from their past clients. Too many complaints from these past clients is a major red flag. You should work with an insurance provider with many positive comments. However, you can ask for the contact details of some of their past clients and hear their experiences.
Check if the policy covers your destination
It’s essential to check whether or not a travel insurance policy covers your next destination. You can ask your insurance company or simply check online. You may be surprised to find that the policy doesn’t cover your destination when it’s too late. In this case, you’ll be responsible for any damage, losses, or medical expenses incurred.
Read and understand terms and conditions
The worst mistake you’ll make when purchasing a travel insurance policy is failure to read and understand the terms and conditions carefully. Ensure you go through each detail in the fine print and find out what’s covered or not covered by the policy.
Purchase the policy in advance
Travelers are encouraged to purchase travel insurance policies in advance since they’ll cover expenses incurred due to trip cancellation, interruption, or delay.
In conclusion, these are the steps to follow when purchasing a travel insurance policy. The average cost of travel insurance is 4%-10% of the entire trip cost.