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There is no other feeling like the excitement that washes over you once you finally book your next adventure. Whether you are traveling to another state to see friends, taking your family to Disneyland, springing for a big European trip, or even venturing to Antarctica – the excitement is palpable.
But happens if you have to cancel your plans?
Or if you have a medical emergency? In any of these cases, you may be losing a considerable amount of money on the non-refundable hotel and airfare costs or special trip arrangements (such as a cruise, an organized tour, or excursion). And in case of a medical emergency, you’ll have additional medical expenses on top of that.
Certainly, it is not the vacation you were hoping for.
Travel insurance is designed to protect you from losing on the experience and your money.
Consider purchasing traveler’s insurance if:
- You are traveling internationally
- You prepaid the vacation (partially or in full), and it is non-refundable
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Some people would argue that half the fun of going on a trip is the planning and the anticipation. Maybe you spend hours carefully crafting your itinerary and booking all your hotels and excursions. Or perhaps you are a free-spirited, fly by the seat of your pants type of traveler. In any case, unless you show up at the airport and randomly decide to go on a trip, you have to book some things in advance. Most of the time, it will include airfare, transportation, and accommodations at least for the first few nights of your trip.
Unfortunately, life doesn’t always happen according to plan
Travel Insurance is designed to help with those non-refundable costs and of course, medical emergencies. Actually, the name Travel Insurance is a bit misleading as the term is used interchangeably to discuss Travel Insurance and Trip Insurance. These insurances cover different situations, however ideally can be combined into a single policy if so desired.
What is the difference between travel insurance and trip insurance?
Trip Insurance, also sometimes called Travel Assistance, reimburses you for the non-refundable deposits you paid on your bookings such as airfare, transportation, and lodging. It will also cover pre-paid travel plans like organized tours, cruises, etc. as well as the cost of flight delays and lost baggage.
Travel Insurance covers medical expenses. It comes in especially handy overseas where your regular medical insurance may not cover you. Even if your medical insurance covers you, they will not cover the expense to get you back to the US.
Travel medical insurance will provide coverage for:
- Emergency hospital stay
- Doctor visits
- Dental trauma (some policies) to otherwise healthy teeth (i.e., no pre-existing conditions)
- Limited coverage for lost prescription medication such as an asthma inhaler
In a nutshell, Trip Insurance protects things, and Travel Insurance protects people.
Generally, pre-existing conditions like Diabetes, Pregnancy, or any other conditions known prior to travel are not covered. You may be able to include coverage for them for an additional premium.
When should I skip purchasing travel insurance?
As with any time you deal with insurance, it all comes down to balancing your risk and the cost to eliminate/reduce such risk. Not every trip calls for the purchase of travel insurance. So when is your risk relatively low and your money will probably be better spent elsewhere (hotel upgrade anyone?)?
And the answer is – drumroll, please…. Domestic travel with no other pre-paid expenses.
One of the biggest cost factors of travel insurance is the medical portion as emergency medical costs can add up quickly. When you travel domestically, this is not an issue since your medical plan will cover any emergencies in the US.
The real value of domestic travel insurance
The only real value in a travel insurance policy when you travel domestically is the reimbursement for the cost of non-refundable plane tickets. In this situation, it comes down to figuring out the cost of travel insurance vs. the financial risk that you agree to undertake. If you scored a super cheap deal on a trip to Florida for $95 and plan on staying there with friends – probably not worth it. If we are talking about $500-$600 a ticket, it might make sense depending on your financial situation and other trip variables.
Purchase your travel insurance soon after booking your trip.~ Broker Tip!
Many providers require you to purchase the travel insurance within 10 days of finalizing travel arrangement to be covered for pre-existing conditions.
Decide if you need travel insurance
Once you booked the trip and all the arrangements are finalized, decide if you need to purchase the insurance. Consider the money you stand to lose if the trip got unexpectedly canceled and decide if this is an acceptable risk.
Check with your credit card
Many credit cards such as AMEX and Visa offer limited travel insurance protection if you book the trip with their credit card at no additional cost. The coverage will not be as robust; however, for a quick domestic trip, it just might be enough.
Get a few quotes
Reach out to a few insurance providers and compare quotes. Pay special attention to the fine print and any exclusions the policy entails. If you want to ensure any pre-existing conditions, discuss with your representative before signing on the dotted line.
If the travel was booked through a travel agent, they should be able to help you get a quote as well.
Read your policy!
This step is usually not done until something goes awry. Skip at your own risk! It’s essential to read your policy to make sure that nothing was left out or accidentally excluded (especially important in case of pre-existing conditions), as well as getting familiar with instructions on how to submit a claim, the required documentation to get the claim approved, etc.
About the Author
As a former insurance broker for over 10 years, Olga has deep knowledge of insurance concepts and policies. She is passionate about helping others understand the insurance policies they are purchasing and find policies that suit their unique needs.
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