Under What Circumstances Should I Buy Travel Insurance?
Photo: Duncan Harris
Travel to a far off land is not as unusual an event as it once was. With familiarity comes expectation: Your travel plans are a recreational investment and investments should be protected, hence the increasingly popularity of travel insurance. Is travel insurance worth the cost? Yes, under many circumstances. But be careful your travel insurance doesn’t duplicate coverage you already have.
Types Of Travel Insurance
Travel insurance can be purchased either through traditional insurance companies or through the operators of specific travel venues like tour operators or cruise lines. The latter option only protects policyholders for trips arranged through that operator.
The two main categories of travel insurance are coverage pertaining to trip logistics and coverage pertaining to medical emergencies. Common exclusions include many pre-existing medical conditions, pregnancy after the first trimester and injuries or illnesses related to substance abuse. War and terrorism used to be automatic exclusions as well, but these days travelers can buy policies that will protect them in countries where terrorist attacks occur routinely.
• Trip cancellation insurance: Trip cancellation insurance is designed to reimburse policyholders for financial losses that occur when they cancel a trip. Traditionally, trip cancellation insurance only applied when some reason beyond the policyholder’s control necessitated the cancellation. More recently, however, plans that allow policyholders to cancel for any reason have become popular. These are considerably more expensive than conventional trip cancellation policies.
• Trip Delay Insurance: Trip delay insurance is designed to reimburse policyholders for flight connections missed through airline inefficiency as well as travel delays due to inclement weather.
•Travel Medical Insurance: Travel medical insurance typically includes coverage for emergency medical treatment and evacuation to a more critical care facility or even back to Australia if a qualified physician deems it medically necessary. Some travel medical insurance provides access to services that will recommend English-speaking physicians while you are abroad.
You will be required to pay for any medical services you receive abroad; the insurance provider will reimburse you after the fact.
Other types of travel insurance include covers for 24-hour traveler assistance, lost or delayed baggage, legal assistance, overseas funeral expenses, curtailment and return of a minor child. Additionally, some travel covers also provide reimbursement for costs associated with rental car damage, risky sports, kidnap and ransom, and hotels or transport carriers that go out of business.
Should You Buy Travel Insurance?
In a typical year, the Australian government’s Department of Foreign Affairs and Trade handles 1,200 overseas hospitalizations, 900 deaths and 50 evacuations for medical reasons. The affected travelers are held personally liable for the cost of these services. The Department strongly recommends that all Australians traveling abroad purchase travel medical insurance, stating that if you can’t afford to buy travel medical insurance then you can’t afford to travel.
Before you buy any kind of travel insurance cover however, check to see what coverage you already have through existing insurance policies, credit card benefits and association memberships. Your medical insurance may already provide some level of protection when you’re traveling abroad. Your homeowner’s or renter’s policies often include protections for theft even if that theft occurs far from home. Quite often in the case of natural disasters and other extreme events that require travel providers to cancel trips, ticket costs are automatically refunded. Certain credit cards already entitle you to generous accidental death and dismemberment benefits, while others offer coverage for rental car damage as well as reimbursement for lost luggage.
When you’re buying trip cancellation or interruption insurance, consider the size of the investment you are protecting. If you’re planning a short flight from Sydney to Hunter Valley, chances are you don’t need travel insurance. But if you’re planning a round the world, once in a lifetime cruise? Go for it. That way if you fall ill, miss your connecting flight, or your travel provider goes belly up, you’ll be disappointed but you’ll still have the financial wherewithal to book another trip. One caveat: Do not buy cruise trip insurance from the same company with which you booked your cruise. If that company goes out of business, they won’t reimburse your claim.
If a delay on the part of your travel provider makes you want to say, “To heck with this!” and cancel your trip, be sure you’ve read your policy’s fine print: With some policies, more than half your planned trip must be delayed before you can cancel and claim reimbursement.
When you’re shopping around for medical evacuation insurance, be sure to read the fine print on the prospective policies. Many companies will stabilize you and then fly you to a physician and medical facility of their choice, not yours.
Since airlines are already required to reimburse you if they lose your luggage, you might be tempted to forgo lost luggage insurance. If you value what you’ve packed, this may be a mistake. Qantas Airlines has an extremely laborious procedure for lost luggage reimbursement; they won’t even initiate your claim until your baggage has been missing for 21 days. International claims are subject either to the limits of the Warsaw Convention (AU$30/kg) or the Montreal Convention (maximum AU$1,950.)
Related posts:
- Under what circumstances should I buy travel insurance?
- Travel Insurance: Staying Safe While You Travel
- Cruise Ship Travel Insurance – The Basics
- How Travel Insurance is Valuable for Cruises
- How Travel Insurance Can Make for a Smooth Trip
This article contains general advice about travel insurance. The author has not taken into account your financial situation or needs and you should consider whether the advice provided is appropriate for your own circumstances before relying on it.
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Filed Under: Travel Insurance
