Travel insurance is not widely purchased. In fact, only one third of travelers buy it because they think it duplicates coverage or is too expensive. But, depending on the cost of the trip, travel insurance may pay off. Travel insurance combines trip cancellation or interruption coverage, personal effects insurance and emergency medical coverage. But, before deciding if the insurance is worth the price, you should understand what is covered.
Current Coverage
Check your existing insurance plans before investing in travel insurance. Several plans including health insurance, life insurance, credit cards and auto policies offer travel protection. Check for redundancy with your homeowner’s coverage for the loss of personal effects, since the amount of reimbursement for lost luggage dramatically reduces when you travel internationally. Most credit cards also provide additional travelers insurance that may protect you against car rental incidents, lost baggage and cancellation of services before they were rendered.
Price Check
Once you identify coverage gaps, shop around on sites like InsureMyTrip.com or TripInsuranceStore.com. Coverage plans and prices vary, so do your research to find what works for you. Figure about 5% of the total cost of your travel. But credit card protections or your travel agent may include some trip cancellation coverage. You should buy the insurance quickly after booking to protect yourself as early as possible.
What’s Covered
Travel insurance can include rental and lost baggage coverage, medical visits and trip cancellations due to natural disasters, weather problems or political unrest. But, it can be expensive. However, if you are taking a once in a lifetime luxury trip around the world, insurance can help to avoid high cancellation losses. Another reason to opt for travel insurance is if you intend to participate in high risk or extreme sport activities, such as rock climbing, diving, or snowboarding. Your existing health insurance may not cover emergency treatment abroad or cover evacuation costs.
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