Travel Insurance – What You Need to Know
Why do people need travel insurance? It provides a guarantee to pay your money back in case something happens to your health, your flight is canceled, etc.
Before making a decision whether to buy insurance or not or what kind of insurance is appropriate, you have to understand all the types of travel insurance, know what each of them covers and if you need it or not.
Trip cancellation or travel protection insurance.
This type of insurance covers full or partial costs of the trip if it is canceled, delayed or interrupted by some reason. This coverage will typically cost you around 5 percent of the total price of the trip. This type of insurance can be best suitable for vacations requiring a large initial lump sum payment.
Additionally, you have to take into consideration your health problems, the probability of unexpected events in the country where you want to travel, such as political unrest or adverse weather conditions, which can result in canceling your trip.
Nonrefundable ticket coverage.
You may consider purchasing this type of coverage if there is a chance of altering your travel plans after buying a ticket.
Provides insurance in case your baggage is lost, damaged or arrived late. Airlines compensate for lost baggage up to a certain amount, which can fluctuate around $500 – $3,000 range. Thus, this type of insurance is most appropriate for people who have expensive items in their baggage, such as electronics, jewelry, or other valuable things.
This will protect you from incurring expenses associated with health issues during your stay in a country you travel. The amount of the insurance coverage will be mainly based on client’s age, health condition, and length of the trip.
Typically you have to consider around $75 of health insurance for a short trip. This type of insurance can be most valuable to people who plan to stay in a particular country for a long period of time or have some health issues that can be exacerbated during this extended period.
Accidental death and dismemberment coverage.
This type of insurance guarantees payments to the client or his/her beneficiaries in case the client dies or loses his/her limb during the trip.
However, sometimes travel insurance can be a meaningless expense for certain people. For example, if you already have an insurance, such as homeowners, auto, life, or health, buying a travel insurance can be considered redundancy as it simply overlaps with your existing coverages.
Before making a decision to purchase a travel insurance be sure you have checked the policies in all of your existing insurance contracts.
One other example where buying travel insurance is a waste of money is when your credit card provides coverage. So don’t forget to review your credit card contract too.