Travel Insurance: Find out if you actually need it

The Importance of Travel Insurance

Have you ever considered the need for travel insurance? If you are among the people that think trip insurance is just a waste of money, you better have a rethink. Actually, the reason why some people think they don’t need travel insurance is simply because of ignorance. Probably, they don’t know what the insurance cover. An average American will be ready to save towards his vacation trip. But if you suggest the need to buy travel insurance, he will think that the insurance company is trying to force its product on him. I will say that buying travel insurance is as important as the trip itself. I like the way someone put it. ”If you can’t afford travel insurance, then you can’t afford to travel”, the person said. It is that serious.

Has it ever occurred to you that travelling involves risks? The risk is not just limited to the possibility of getting involved in an accident. Certain events can happen that will make a trip unpleasant or even force you to cancel the trip. This might result to the loss of the money you have paid for your flight tickets and accommodation. With the current happenings around the world, you will agree with me that there is nothing like certainty again. For instance, let’s consider the flooding that happened at Texas recently. Many houses were almost submerged thereby leading to the need to urgently evacuate the residents. You can imagine what would have happened to a family of five who had scheduled to have their vacation to the city during that period. They must have booked for their flights and accommodation ahead. Even though the hotel confirmed that the flood did not affect their facilities, the family would most likely cancel the trip. What a loss of investment!

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Whether you agree with me or not, vacation is actually a form of investment. A lot of people save towards it and they are eagerly waiting to enjoy it. But the truth of the matter is that, anything can go wrong. What is supposed to be a pleasurable trip can turn to a nightmare if there is no adequate travel insurance cover in place. If you actually want to enjoy your trip or vacation, the best thing to do is to make travel insurance as part of your plans. Your vacation budget will be incomplete without you buying travel insurance policy. Why do you need travel insurance? You need it for the following reasons:

Benefits of Travel Insurance

Travel Insurance provides cover against travel risks such as :

  • Loss of luggage: If your luggage is lost, damaged or stolen, your travel insurance will cover this. This means that such items will be replaced at the expense of your insurer. Some people will claim that they can always travel with less items that they can buy on their own, thereby, avoiding the cost of travel insurance. But the truth is that, if you think you can afford to replace any stolen luggage of yours, it means that you can as well afford to pay for the travel insurance premium. This will give you additional peace of mind in case your luggage is lost. Besides the travel insurance policy will cover other things. Nevertheless, it is important that you understand the need for you to take adequate care of your belongings. If you lost your luggage due to your own carelessness, you should not expect any reimbursement for this. For instance, if you leave your laptop in a vehicle overnight in an unsafe place, that will be regarded as negligence on your part. You will be personally responsible for the loss. Also, while buying your travel insurance policy, you need to be clear about which of your belongings will be cover. Some insurance companies will put a cap to the value of luggage they will cover. That means they may not cover one hundred per cent of your luggage loss. Also, certain items may not be covered at all. Therefore, you need to find out what is excluded in your travel insurance policy. In case you plan to travel with expensive items with you such as laptop, smartphone, tablet and camera, it will be better that your policy covers their full replacement value.
  • Trip cancellation: Apart from the example of Texas flooding mentioned above, certain events may make you cancel your trip. Such events include sudden illness, accident or death of a close relation, adverse weather, strike action, technical issue or financial default of the travel company may arise. If you have paid for your flight tickets and hotel accommodation, you may lose the non-refundable aspects of the fees. But in order to enjoy reimbursement from the insurance company, you will be expected to buy your travel insurance policy immediately you pay for your flight tickets and hotel accommodation,
  • Trip curtailment: You might plan to spend two weeks on a vacation but there may be an occurrence of event that will make you cut short the duration of the vacation. Your insurer may either refund you the un-utilised portion of the hotel bookings you have made. On the other hand, if you want to return to finish the un-utilised part your money, the insurer may pay for your return.

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  • Unexpected medical expenses: You should not make the mistake of believing that your local medical arrangements will cover your overseas medical bills. Also, the fact that you have cheap good medical care in your home country does not mean that you will have access to the same cheap medical care abroad. Here in USA, medical expenses are crazily high. Don’t be surprised if the doctor hand over a medical bill of $10,000 to you just for a single treatment. So, medical expenses may be too much for you to be paid out of pocket. If you want to buy travel insurance, you may need to find out if it provides cover for pre-existing conditions. So it is always important that you read the fine print about any travel insurance policy you are buying.
  • Emergency assistance such as emergency evacuation: If you travel to a remote place where there is no adequate medical care, there may be need to transport you home or to the nearest hospital where you can have access to adequate medical treatments. Besides, there may be need for evacuation due to occurrence of life threatening natural disasters such as earthquakes, volcanoes or even terrorist attacks.
  • Death and disability: If you die while on trip or you suffer permanent disability, compensation can be paid to your next of kin or a disability payment to you for a period of time. Your insurer may even provide you housekeeping services for a limited period of time.
  • Personal liability cover: If you are involved in an accident and you are found guilty, your travel insurance will provide you a cover for the liability you might incur as a result of the claim made against you. However, this may not cover the risk involving in driving your car.
  • Delayed journeys: Costs incurred on food and accommodation as a result of extended stay due to adverse weather will be covered by your travel insurance policy. If you are not insured, you will need to pay this as part of your own out of pocket expenses. Airlines are not under any obligation to provide you food or accommodation for delayed flights for the reasons outside their control. If you are travelling in a long journey that requires that you connect to another flight, a delay of say six hours can make you miss your next flight.

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What Travel Insurance Doesn’t Cover

You have been told that it is a good idea to buy travel insurance before you embark on a trip. That is fine indeed. But it is important to know that there are certain situations that your trip insurance policy will not cover. These situations are referred to as exclusions in your policy. Unfortunately, some people don’t pay attention to this. If you are in doubt of what your trip insurance policy covers or what it does not cover, it is advisable to find out from your insurer. However, I will mention few of such situations that will be excluded from the policy coverage.

  • Pre-existing medical conditions: If you have a particular health issue which has been diagnosed or treated before you purchase your travel insurance, such health situation is known as pre-existing medical condition. This will not be covered by your policy. This means that if you travel and you are treated for pre-existing medical condition and you file a claim for it, your insurer will decline such claim. However, you can purchase additional coverage for this but it is optional.
  • Cancellation for other reasons: Trip cancellation has been one of the reasons people buy travel insurance policy. However, that does not mean that your insurer will honour all claims relating to cancellation. Before your claim can be honoured, you should be able to convince your insurer that the reason(s) for the cancellation is/are totally out of your control. You cannot just change your mind and decide that you will no longer travel and expect your insurer to refund the costs of your flight tickets and accommodation. Examples of genuine reasons for trip cancellation are injuries, illnesses that are not pre-existing, sudden death of a family member, theft of passport, or work related obligations etc.
  • Pregnancy: Some women embark on trip when they are close to child delivery with the aim of giving birth to their new baby in their destination city or country. You should know that your travel insurance policy will not cover your child labour expenses. The reason is simple, pregnancy is considered a pre-existing condition. Based on this ground, insurance company will not honour bills relating to child delivery. Nevertheless, if you really want to enjoy coverage for pregnancy, you will need to specifically shop as few insurance companies may provide coverage for complication in pregnancy.
  • Injuries caused by carelessness: If you injure yourself or become ill due to an act of recklessness, alcoholism or drug abuse, you will be responsible for any expenses you incur in the process.
  • War: If you suffer loss due to an act of war or civil disorder, don’t expect that your insurer will reimburse you.
  • High risk events: Most policies will not cover high risk activities such as skiing, mountain climbing and bungee jumping etc. If you want to engage in any of such high risk activities, you may need to buy separate insurance as your trip insurance policy may not cover any injury you sustain during your adventure.
  • Pets: Some people like travelling with their pets while some do this out of necessity as there may not be anybody to stay behind at home to take care of the pet. Whatever the reason may be, your policy will not cover any veterinary bill you incur on your pet while on trip.
  • Mental Issues: If you suddenly develop mental or psychological disorder or you start exhibiting nervous disorder such as depression or anxiety during a trip, your trip insurance policy will not cover any loss you might suffer as a result.

This list is not exhaustive at all. You need to ensure you read the fine print, terms and conditions relating to your policy to be sure you understand what it covers and what it does not cover.

Types of Travel Insurance Policy

Travel insurance policies come in different form. You can choose the one that best suits you or your situation per time. Below are some of the travel insurance policies you can take advantage of.

  • Single trip travel insurance: People buy single trip travel insurance just to cover a trip for vacation or attend a particular meeting or an event. After the trip is over, the travel insurance policy automatically expires. In this case, you will need to specify your departure and arriving dates when applying for the policy.
  • Multi trip insurance: If you are the type that travels frequently, you may decide to buy multi trip or annual travel insurance. This will not just cover a single trip; instead it will cover all the trips you will make within the specified period usually one year. This can help you save time and costs instead of having to buy single trip travel insurance each time you want to travel.
  • Long stay travel insurance: Your single trip insurance may only cover a 30 day period. However, you may want to stay longer than this. In this case, long stay travel insurance will be more appropriate. However, this will be more expensive than single trip travel insurance. The reason being that, staying longer increases the possibility that you may develop one health issue or the other.
  • Individual travel insurance: This is when each person that is travelling is provided coverage independently. This allows the policy to be tailored to the situation of the specific individual involved. For instance, your health conditions may be totally different from the other person travelling with you. Therefore, the person with certain health issue may pay higher travel insurance premium than his counterpart with no such health challenge. Individual travel insurance can be for single trip, multi-trip or long stay travel insurance.
  • Group travel insurance: If you are travelling on a family vacation or you are going on an excursion with other people, you may choose to buy group travel insurance. This is different from individual travel insurance where each person will need to buy his or her own travel insurance separately. In the case of group travel insurance, everybody will be provided coverage under one policy. This can actually be cost saving as the insurance company can offer group discount.

Why some people don’t buy travel insurance

It is difficult to believe that no matter the amount of preaching you do about the need for travel insurance, some will still not buy into it. If you ask them, they actually have their own reasons. Their reasons are what can be termed as myths. It is a misconception of their part. Let’s discuss some of them here

Travel Insurance Myths

  • My travel insurance claim will be declined: It cannot be ruled out that insurance companies may not approve all claims presented to them. This is not peculiar to trip insurance alone. It does happen to other types of insurance you can ever think of. Instead of running away or avoiding being insured, you just need to find out the reasons why insurance companies turn down some claims and then ensure you avoid such. For instance, there are few insurance companies that have bad records when it comes to redeeming customers’ claims. In this regard, you just need to do your homework properly when you want to buy your travel insurance so that you don’t fall into the hands of such insurance company. If you take time to ask people or read about comments and reviews about the trip insurance companies, you will have a glimpse to their customer service delivery.
  • It is too expensive: Trip insurance is not as expensive as you might think. If you enjoy certain coverage from other types of insurance or credit cards, you may be able to cut down your travel insurance premium considerably as you may not need to duplicate certain coverage. At the same time, buying your travel insurance from the same insurance company where you bought your auto insurance, home or renters insurance may help you to enjoy discount.
  • My other insurance policies provide coverage: You should not mistake your auto or home insurance for travel insurance. While your auto insurance may provide coverage against damages done to other person’s property, it will not provide coverage against loss of luggage or delay or cancellation of flights.
  • Airlines are responsible for delay: There is this general misconception that airlines can be held responsible for any costs associated with delay in flight. This is not totally correct. They may not pay or reimburse you if the delay is caused by situation that is totally outside their control. Although some may pay for your food and accommodation, there is six hours delay benchmark also. That is, the delay must have been nothing less than six hours. But at best, let’s assume that the airline pays for your food and accommodation, what of the other associated costs such as the need to extend your stay in the hotel where you have already booked? There is also a possibility of missing other connecting flights (where applicable).
  • If I cancel my flight, airline will refund me. If you cancel your flight within a reasonable time, airlines will only pay you back the refundable portion of your fare. You will lose the non-refundable aspect of it. With trip insurance, the whole fare will be refunded to you as long as you comply with the policy terms.

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How to Save on Travel Insurance

Do you know that travel insurance may not be as expensive as you think? On average, the cost of travel insurance policy can range between five and ten percent of the non refundable portion of your trip costs. This means that one can save almost fifty per cent of his policy cost. In a simple calculation, paying five per cent of your trip costs as against ten per cent is actually a lot of savings. If you are like me that always like to get a good deal in anything I buy, there are ways by which you can save some bucks on your insurance policy. These are discussed below:

  • Shop around: This is not only applicable to travel insurance alone. Shopping around can help you have a better understanding of different travel insurance policies that are available. In addition, you will be able to compare rates. Getting quotes from three or more insurance companies can save you some costs. While shopping, you may need to provide certain information about yourself and the trip you want to embark on. Insurance companies will like you to furnish them with destination country, departure date, duration of stay, type of travel insurance coverage you want to buy, your age, current medical conditions, total trip costs, initial trip payment date and whether you will be doing adventurous sporting activity. All these will impact the travel insurance quotes you will be offered. While you may not necessarily choose the insurance company that offers you the cheapest travel insurance quote, you will be able to buy the travel insurance that provides you adequate cover at a reasonable rate.  You can buy your travel insurance policy from travel agent, online broker or insurance company. The only reason I am not totally disposed towards travel agents is that they may not offer much flexibility. Some of them don’t offer comprehensive travel insurance coverage.
  • Take advantage of your credit card coverage: If you hold reward credit card, there is tendency that the card offers you some benefits such as car rental coverage, trip cancellation or curtailment insurance, lost or delayed luggage insurance. If this is the case, there is no point duplicating the coverage in your travel insurance policy. You can just simply take advantage of the benefits the card offer. Unfortunately, some people just hold card without finding out what benefits such card offers.
  • Buy Annual Travel Insurance Policy: If you are the type that travel frequently, you may be able to save some costs by buying annual trip insurance policy instead of buying policy for each trip. For instance if you need to be travelling to a particular country minimum twice every month, it may make sense to buy annual policy.
  • Buy coverage you need: Some insurance companies bundle their travel insurance and sell to travellers. The truth is that, you may not need all the coverage the insurance provides. For instance, if your travel does not involve adventure sporting or high risk activities or you don’t intend to rent a car, personal liability coverage may not be applicable to you.

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How to Claim Travel Insurance

The essence of any insurance is for you to enjoy cover as specified in the policy so that you can be able to make claim in case of eventuality. But you need to bear in mind that insurance companies don’t honour all claims. In most cases, the faults usually come from the insured. It is either that the insured didn’t bother to read the fine print behind the policy tin order to understand what it actually covers and the terms and conditions attached to the policy. But if you are sure that your travel insurance policy provides you adequate coverage, there are basic procedures you need to follow so as to ensure that your claim is not denied. The first step you need to take is to call your insurance company and notify them about the incident. Specifically, you should ask them about the steps you need to take in order for you to file your claim. Of course, you will need enough and authentic evidence to support your claim. For instance, if you are claiming reimbursement of medical expenses, you will not only need to provide the medical bill. You will need a proof of the condition for which you were treated. You should also bear in mind that you may likely be the one to pay your bill first while you then file for the reimbursement. If your trip insurance policy don’t cover pre-existing conditions, your claim may be rejected if you are filing reimbursement claim for treatment on pre-existing condition. Don’t wait till the time you will need to file a claim before you start reading your policy document. This will be like medicine after death. Let me re-emphasize it here. Before you sign up for any travel insurance policy, ensure that you read and understand the fine print. The reason is that, travel insurance policies are not the same. Therefore, if there is anything you don’t understand, you should endeavour to ask questions.

In conclusion, travel insurance may seem like an additional expense, it is actually cost saving in the long run. Besides, it gives you peace of mind and this can make the whole difference in your trip or vacation experience.

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