As more Americans emerge from the COVID-19 pandemic and begin to travel, you may be planning your own getaway. With delays, breakdowns, and cancellations — and even new medical issues — occurring more frequently than in the past, you might also consider travel insurance. While travel insurance is not required like at home or, taking out a policy before you leave can protect you from losing most or all of the money you have invested for the trip. This can be things like plane tickets, rental cars, hotels or even expensive tours.
Various types of travel health insurance can also protect you against financial loss if you cancel a trip due to illness, suffer a medical emergency during the trip, or even die abroad. When traveling internationally, travel medical insurance may be particularly important, or you may be responsible for the full cost of any expenses associated with an unexpected medical emergency or accident abroad.
Consult an experienced agent or financial adviser who is familiar with travel insurance, as policies (and prices) can vary widely. Before you travel, do some research. Getting started is easy.
How does travel insurance work?
In most cases, travel insurance will reimburse you for the costs covered by your policy once you make a claim and it has been approved by the insurer. The insurer will require proof of your loss or expense before approving your claim. It’s a good idea to find out what your current insurance policies (like health, home, and auto insurance) already cover. Some airlines and other tour operators, such as cruise and travel companies, offer what is called a “cancellation waiver”. This is not travel insurance and is not normally regulated by state insurance agencies. It’s also worth noting that US federal law dictates that consumers are entitled to a full refund if their flight is canceled or significantly delayed.
How much does travel insurance cost?
According to the US Travel Insurance Association (UStiA), travel insurance is typically 4% to 8% of your total trip.
For example, a policy for a trip that costs $2,000 would cost $80 to $160. The prices vary depending on the length of the trip, the destination and the age of the travelers. CFAR policies cost at least 50% more than other policies, according to the National Association of Insurance Commissioners. A note: travel insurance is often suggested as an add-on from another service. These deals are often offered by a single company, which may not have the best price or coverage. So before you hit the buy button, do some shopping.
Whatever your plans, it’s a good idea to thoroughly research and compare travel insurance policies and coverage before you travel, not once you’re on the road.
What types of travel insurance are there?
There are different types of travel insurance. The most popular are:
Trip Cancellation: This covers travel expenses if you have to cancel due to illness, death in the family or any other reason specified in the policy. Some policies include natural disasters at home or where you intended to travel, or legal obligations such as jury duty. Check what is included in the policy before you buy. Travel Interruption: This can cover prepaid travel expenses if you have to end your trip early because you or a family member becomes ill or dies or other interruptions listed in the policy, which can range from airline strikes to natural disasters. Trip Delay: This reimburses prepaid expenses if a delay means you miss your trip. Cancel for Any Reason (CFAR): Although the reason doesn’t matter, CFAR is usually the most expensive type of travel insurance. CFAR policies typically only reimburse 50% to 75% of the total cost of your trip (sometimes less). Travel Medical Insurance: This is a policy on top of your existing medical insurance that can be particularly useful when traveling abroad. Medicare and most US health insurance plans don’t cover you outside of the country. Medical Evacuation: This covers the cost of your transportation to an approved medical facility in the event of a medical emergency. Most U.S. health insurers do not pay for repatriation into the country from overseas.
With so many travel insurance options to choose from, it can quickly become confusing. Speak to a travel insurance expert today who can advise you.
What does travel insurance usually cover?
Remember to check your policy to make sure it covers what you want as policies vary widely. Typical coverage may include:
Cancellation or interruption due to illness or injuryA natural disaster preventing or interrupting your tripAirline or transport strikeLost luggage and rental car damageWhat does travel insurance not cover?
Not every unforeseen event is covered by travel insurance, so check the policy carefully. These exceptions may include, but are not limited to:
Certain natural disasters Some illnesses or medical emergencies Some events such as war or terrorism Pre-existing health problems in certain circumstances Pregnancy and childbirth Risky activities such as skydiving or daring skiing Known pandemics/epidemics Fear of contracting COVID-19
If you have additional questions about travel insurance, speak to a professional who can help. They can help you find the best travel insurance for your trip.
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