What Is Travel Insurance and Do I Need It?
Simply Put Travel insurance is the way to protect your travel investment.
A travel insurance plan is limited term insurance policy composed of a package of benefits intended to protect you, your travel investment and your belongings.
At a minimum, a good plan will provide benefits for:
- Trip Cancellation to reimburse your non-refundable travel arrangements should you have to cancel your trip for a covered reason prior to departure. Depending on the policy the reason can be important. So selecting the right policy is important.
- Trip Interruption to reimburse your unused travel arrangements should you have to interrupt or return home early from your trip for a covered reason.
- Medical Expense/Emergency Assistance to cover medical expenses and emergency transportation for a serious illness or injury that occurs while you are traveling.
- Missed Connection to cover additional expenses that you must pay to make alternate travel arrangements when a flight connection is missed due to tour consultancy such as bad weather or mechanical issues.
- Travel Delay Benefits to cover your out-of-pocket expenses for meals and accommodations when you are unexpectedly delayed due to flight delays or cancellations or for other similar covered reasons. Generally, you must be delayed for a specified amount of time, such as 6 or 8 hours or more.
- Baggage and Baggage Delay to cover loss or damage to your baggage or personal items or the cost of buying toiletries or personal articles if your baggage is delayed for a specified amount of time, such as 8 or 12 hours or more.
Some additional benefits that may be included in the “Better” or “Best” plans generally include:
- Enhancements to provide more covered reasons if you have to cancel or interrupt your planned trip. Many of the “Best” plans also include a Cancel For Any Reason Benefit which allows you to cancel your trip, generally two days or more before scheduled departure, for any reason whatsoever and receive a benefit for most of your non-refundable trip cost. This is by far the best way to go and it generally doesn’t cost much more. A good travel agent will recommend this.
- Higher levels of protection for most benefits
- Additional benefits for things like Rental Car damage, Accidental Death and Dismemberment.
To understand which type of plan (Good, Better or Best) is right for you, it is important that you understand the benefits offered and how they may help you. For example, if you will not be renting a car on your trip, you will not need to purchase a rental car damage benefit. If you are traveling within the United States, higher limits of medical protection may have less importance to you.
For a variety of reasons, it is important to purchase travel insurance when you book your vacation. Most policies contain time sensitive provisions that will limit coverage if you wait. This may include limiting your coverage to by not covering Pre-Existing medical conditions that have been treated or even that have been recommended to be treated 60 – 180 days prior to the purchase of the policy. Another thing that may not be covered would include a supplier Bankruptcy or Insolvency coverage, ie an airline going out of business, and the most will drop the best reason to buy insurance, Cancel For Any Reason Benefit.
Why Buy Cancel For Any Reason?
Regular Travel insurance does cover many covered reasons that allow you to get your Trip Cancellation Benefit.
Without this important clause remember not every possible reason is covered. For example, the fear of traveling or a change of mind or other similar discretionary reasons. The Cancel For Any Reason policy gives the traveler 100% freedom to cancel a trip for a non-covered reason, generally 2 days or more before the scheduled departure date, and be reimbursed for a percentage of the cancellation penalty amount (such as 75% or 80%). Of course, if a trip is cancelled for a covered reason, then reimbursement would be at 100% of the cancellation penalty amount under the Trip Cancellation Benefit.
Many people only think of themselves when deciding to purchase travel insurance and this can be a costly mistake. For example it is not uncommon for younger people to assume that because they are healthy, travel insurance is not needed. But what about parents, grandparents, children, grandchildren, aunts and uncles? Remember travel insurance covers you if something happens to you or to any of these people, causing you to cancel your trip. Also you may be healthy now but all too often injuries from an active lifestyle can suddenly appear, like a broken foot from playing softball or volleyball. Insurance can also help you cover extra costs of getting home if you unfortunately get injured while on vacation.
Generally, the more coverage the better the plan, but ask your travel agent which they recommend..The better policies may cover many of the following additional reasons:
- involuntary termination or transfer of employment
- air carrier delays or cancellations due to strike, bad weather or mechanical breakdown
- damage or destruction of your home or place of employment
- a terrorist act or incident
- revocation of military leave
- Bankruptcy or Insolvency of an airline or other travel supplier
- And of course Cancel For Any Reason Benefits
If you are purchasing a vacation on-line be careful, most sites won’t or don’t offer you insurance without hunting for it. They really don’t care about your travel just getting your booking, where as a travel professional wants to develop a longterm relationship with a happy loyal client. While people often focus on one or two concerns such as elderly relatives or political unrest that might affect travel, it’s the unexpected that happens: like Icelandic volcano eruptions, Tsunamis, earthquakes, hurricanes, winter storms, torrential rains and on and on… that can affect you or your travel investment.