How to Choose the Right Travel Insurance for Your Next Vacation

March 05, 2015

“To Insure….or Not to Insure”….that is the question!

“Expect the best, plan for the worst” is perhaps the best advice there is when it comes to travel.  Included in your ‘plan for the worst’ may be the purchase of a travel insurance package in the event of incidents and accidents that can occur when you’re a long way from home.  You can purchase insurance coverage for a specific thing (ie. baggage) or you can purchase a travel package.  Whether you opt to purchase insurance or not depends on a number of things.  Do you feel that insurance is just a waste of money?  You may argue, ‘What could possibly happen?’  You’re the picture of health now and you darn well intend to stay that way until you return home, right?  In the wise words of Dirty Harry ….”You’ve got to ask yourself one question: ‘Do I feel lucky?’  Well, do ya, punk?”

There are 4 main types of travel insurance:

1. Flight insurance – covers accidental loss of life, limbs or sight during the flight for which the insurance was purchased.  Plane crashes are very rare – and you alone need to decide if this insurance is really necessary for you.

2. Health & Accident insurance – offers emergency medical assistance and covers medical expenses in case of accidents and hospital benefits if you fall ill on your vacation.

Some policies require that you pay the bills upfront and then get reimbursed at a later time.

Regardless of what medical treatment you receive, it’s important to let your insurance carrier know right away.  Your insurance card will have a 24-hour phone line that you can contact as soon as you are able.

Read the fine print here!  We’ve all heard the horror stories of travelers who thought they were covered for all types of accidents and illnesses only to find they were not.

Many pre-existing conditions can be covered by medical insurance depending on when you buy the coverage and how recently you have received treatment for that specific condition.

3. Baggage insurance – protects you against loss, theft, or damage to baggage and personal effects packed in your luggage.

This coverage will protect your baggage throughout your entire trip – not just on the flight portion.  It also will cover purchases you make while traveling.  Just be aware that you will be reimbursed only up to the maximum amount of coverage that is stated in the policy.

If you purchase a travel medical plan or an annual plan, check the details as it may include coverage for lost, stolen or damaged luggage.  You don’t need double coverage.

Bear in mind that airlines may pay you a pittance if your bag is lost or damaged while in their care and any amount you receive from the airline will be deducted from the amount you receive through an additional baggage policy you purchase.  Airlines are not required to pay you anything if your luggage is delayed a day or two.  Pack a spare blouse/shirt and underwear in your carry-on.  This way, if your luggage doesn’t arrive at the same time as you, you can still go to that morning meeting looking fresh as a daisy!

Purchasing travel insurance that includes baggage protection will reimburse you for incidental expenses you rack up while waiting for your luggage to catch up with you.

4. Trip Cancellation or Interruption insurance – reimburses you for non-refundable prepayments if you have to cancel your trip for a covered reason.  If you simply change your mind about going…..that is NOT a reason that will be covered in the policy.  You can purchase ‘any reason’ coverage which is super expensive but, while it won’t cover 100% of what you have prepaid, it will cover a sizeable portion.

Check your credit card insurance before buying this insurance as your credit card company may provide some coverage for any flights or tours you have booked and paid for with that credit card.

Your Trip Cancellation insurance also may cover any pre-existing medical conditions you have, depending on when you buy the coverage and how recently you have received treatment for that specific condition.

Double check that the country to which you are traveling will be covered by your cancellation insurance – it may not if it is deemed to be a high-risk country.  It would be necessary to buy supplemental coverage for travel there.

This coverage is one that may well be worth your money to purchase as it is very costly, without this coverage, to cancel or interrupt any travel or tour for which you’ve prepaid.

Some travelers definitely should have travel insurance – for other travelers it may not be so cut and dry.  Some things (among many) to consider when making your decision include:

  • Will you be more relaxed knowing you have coverage or do you think it would be a waste of money?
  • How is your health?
  • Where are you traveling? (some destinations are higher risk than others)
  • What’s the value of your luggage and its contents?
  • How reputable is the airline with which you’re flying? Have they been in business a long time?
  • If you pay entirely for your trip with a credit card, you already may have some travel insurance through the card.
  • If you have extended health coverage through your place of employment, it may include travel insurance.

Minimize the risk of your checked luggage being stolen by following these tips:

  • Go to the baggage carousel promptly to be there to pick up your luggage before someone else does.
  • Always use a TSA lock for every piece of checked luggage.  You can set a combination but the TSA will be able to open it with a master key in case they need to inspect it.
  • Do not pack items of value in your checked luggage  – documents, electronics, cameras, jewelry, medications, etc.  Take them with you in your carry-on luggage.  You will need to purchase supplemental insurance coverage above and beyond baggage insurance for these items.  Check with your homeowners’ or renters’ insurance carrier before purchasing additional coverage as they may be covered already.

If you decide to purchase an insurance travel package, ensure that you know before you travel exactly what will and will not be covered.  To be forewarned is, indeed, to be forearmed!  You have prepared for the WORST….now expect the BEST and enjoy yourself!

Written by Emma Ghattas