Deciding to purchase travel insurance is a tough decision to make – will it be worth it?
Travel insurance gives you the assurance of getting your money back due to uncontrollable reasons before or during a trip such as: cancelled flights, travel delays, or a medical emergency. For those reasons alone, travel insurance is worth it.
Nobody wants to travel without planning ahead and so we try and sort it out before leaving. Getting sick, hospitalized, injured in an accident, losing your baggage or personal belongings are definitely the last thing that you would want to happen during your trip. But in unfortunate cases where any of these happen, the first thing you would want is an insurance to cover the hefty costs to cover for lost belongings, rebooking fees, hotel accommodations, and medical bills.
Travel insurance is an important tool when taking an international trip, where health insurance may not apply. Other than international trips, expensive domestic trips are also worthy of being insured, to prevent heavy financial losses when you suddenly have to change plans. No matter how well-thought of your travel may be, an unfortunate situation can happen. And if they do come, it is best to be protected by travel insurance.
In this article we cover other important areas around travel insurance which are outlined below.
What Is Travel Insurance and How Does It Work?
Types of Insurance
1. Single Trip Travel Insurance
2. Annual Trip Travel Insurance
3. Medical Travel Insurance
What Does The Standard Travel Insurance Cover?
1. Trip Cancellation
2. Medical Expenses
3. Medical Evacuation
4. Lost Baggage
Best Travel Insurance
1. Comprehensive Coverage
2. International Coverage
3. Reliable Medical Evacuation Coverage
4. Financial Strength
5. Top-tier Customer Service
Recommended Travel Insurance Providers
1. Single Trip Travel Insurance – World Nomads
2. Annual Trip Travel Insurance – Allianz Global Assistance
How to Get the Most from Your Travel Insurance Plan
What is travel insurance and how does it work?
Travel insurance is made to help cover your expenses if something goes wrong on your trip. It is not equivalent to a health insurance or a substitute for it.
Travel insurance works by paying an insurance company a certain amount, depending on the type of plan that you paid for. This amount will vary on the several factors such as:
- Country of residence
- Duration of trip
- Your age
- And activities you wish to partake in
The insurance company will cover costs such as emergency medical treatment, lost or stolen luggage, delayed flights, or other non-refundable expenses in cases of unexpected trip cancellations.
Travel insurance can be an affordable way to protect oneself against specific unforeseen events. Having to cancel a long-planned getaway can be exasperating, especially if you don’t get any money back. Also, your personal medical insurance at home may not always cover costs when travelling out of the country. With travel insurance at hand, you’ll feel at ease, knowing that you will still be covered.
In most scenarios, travel insurance compensates you for your covered financial losses after you file a claim and once the claim is approved. Filing a claim means submitting proof of your loss to the insurance company, so that they can verify what happened and reimburse you for your covered losses.
There are different types of travel insurance that are on offer.
Types of Insurance
1. Single Trip insurance
2. Annual Trip Insurance
3. Medical Travel Insurance
Single Trip Travel Insurance
Single trip travel insurance is a type of insurance plan that covers only a single trip that has to be purchased prior each trip. It is relatively cheaper because it pays for only one trip. If you’re planning on only one trip this year, a single trip travel insurance will have you covered. If you don’t have other plans of travelling in the future, then a single trip travel insurance will be suitable for you.
Because the single trip travel insurance option offers a lot of flexibility, conditions for each plan will vary depending on whose flying and where.
The pros of a single trip travel insurance policy include:
- Price – If you plan on going on only one trip this year, don’t waste money purchasing yearly travel insurance. Instead, opt for a single trip travel insurance to save money (and spend the extra on shopping instead!)
- Higher or no age limits – Many insurance providers won’t offer annual travel insurance for those who are above the age of 60, but sometimes offer it on single trip travel insurance plans, so this could be a good alternative.
- Pre-trip cancellation – this could come in handy if you need to suddenly cancel your trip for some valid personal reason.
Travel Insurance Tip: Thinking of getting a single trip travel insurance? Look for providers who offer a lot of options and customisable policies.
Annual Travel Insurance
Are you a frequent flyer? Purchasing an annual travel insurance means you’ve got yourself insured for the entire year – giving you peace of mind that if something happens, you know you’re covered and will get the help you’ll need. Annual travel insurance is a type of insurance plan with long term coverage, often 12 months. This is appropriate for people who make several leisure or business trips within a year. This flexible type of insurance covers even that last minute holiday or business trip. You can travel safe knowing your trip is ensured.
Annual travel insurance is an excellent option for those who love to take several trips.The more trips you take each year, the more you appreciate the savings and benefits, rather than booking separate travel insurances each time. But for those just taking a one-time holiday, this option won’t be the most beneficial to you.
The pros of an annual trip travel insurance policies:
- Price – Annual travel insurance may be more cost-effective instead of purchasing separate insurance policies per trip.
- Cover for the whole year – One purchase and your year round trips are covered.
- Convenience – Buying travel insurance will require critical thinking, and having to purchase it only once per year saves you time.
- Reliability and availability – annual travel insurance also covers last minute trips, unlike the single trip travel insurance.
Travel Insurance Tip: If you travel once a year, a single trip travel insurance would be your best option. However, if you travel two or more times a year, you’ll probably save money by signing up for annual trip travel insurance.
Medical Travel Insurance
Getting sick or hospitalised during a trip outside your home country is one of a traveller’s worst nightmares. It disrupts your itinerary and places the burden of seeking medical care in your hands. I experienced this first hand when I was traveling in Thailand, I got really sick because of eating some street foods. I was rushed to the hospital because I was in so much pain and I really thought I was going to die! I didn’t have travel insurance back then so I was very reluctant to go. Because I didn’t have travel insurance, I ended up paying a quite hefty bill for only a few hours of emergency treatment.
You’ll never know when unfortunate event will occur while you’re traveling and that incident made me realized how important it is to have travel insurance specially when travelling in exotic places. Being covered by a good travel insurance plan that includes emergency medical benefits may help you worry less.
Travel Insurance Tip: Make sure you review your insurance plan carefully before you buy because not all plans offer the same medical coverage.
So now the different types of insurance have been covered, let’s look into what you would expect to find in an insurance policy.
What does standard travel insurance cover?
All travel insurance policies have specific benefits and exceptions so it’s necessary to take the time to read the policy wording carefully – including the fine print. Depending on the type of insurance, your inclusions may differ. These will also vary depending on the travel insurance company, but here are some of the basics frequently covered:
1. Trip Cancellation
Few days before your scheduled trip and something goes wrong – you catch a virus making you very sick you might not be able to get on that plane. Are you ready to say goodbye to the warm sun and breeze of your beach destination? You suppose you can postpone it, but what about the cost of flights and hotel accommodations?
That’s where travel insurance comes in. It won’t pay for the emotional damage and disappointment of a cancelled trip, but it will reduce the financial losses of cancelling the trip. The travel insurance reimburses you for non-refundable expenses as a consequence of cancelling a trip. In most cases, your money won’t be returned in full, but a big portion will be – and that is better than getting nothing from a cancelled trip.
Travel insurance policies will usually include to cover the following, such as:
- Travel fees such as flights, bus and train tickets you’ve already paid for
- Hotel and other accommodation expenses
- City tours
But it probably won’t cover the following:
- Where you randomly changed your mind
- If your visa is refused or passport is expired
- If you have pre-existing medical conditions
- If you break up with your travel partner(s) (and refuse to travel together)
Keep in mind that travel insurance providers usually ask for evidence that your flight and accommodation purchases are non-refundable to prevent false claims and scams; otherwise the insurance providers will not reimburse you. Some travel insurance providers reimburse trip cancellations for any reason, while others are stricter and will only reimburse for reasons they deem acceptable.
2. Medical Expenses Overseas
This type of travel insurance policy covers medical treatment due to illnesses, accidents or injuries incurred during a trip. However, not all travel insurance companies will include coverage for injuries caused by extreme activities.
There will be instances you catch the stomach bug in some tropical country, or have bouts of allergies while travelling. In these cases, you don’t want to be burdened by the cost of medical facilities and medications. Take the pain out of medical costs while travelling by having a travel insurance. Note that health insurance is not equivalent to travel insurance.
A standard medical travel insurance policy usually covers the following:
- Costs of medical facilities and doctors’ fees
- Minor (out-patient) surgeries
- Prescribed medicines
And it usually doesn’t cover the following:
- Injuries sustained under the influence of drugs and alcohol
- Injuries from illegal causes (insurance companies won’t tolerate this!)
- Sexually transmitted diseases (so please be careful!)
- Non-emergency medical cases
3. Medical Repatriation
This covers the cost for medical treatment and transport to a treatment facility or back to your country of residence.
Some travelers shy away from common tourist destinations and choose the less touristy places. This would also mean however, that the facilities in these far-flung areas wouldn’t be the same as in the big cities. With repatriation travel insurance policy, it helps you navigate the local administration to get you to a place where you can access the medical help you need.
Medical repatriation/evacuation can cover any of the following:
- Provide transportation services to facilitate transfer from one medical facility to another
- Transport you to medical facilities in another country
- Transport you back to your country of residence to receive adequate medical support
It is worth noting that not all insurance companies will cover all these under medical evacuation:
- Choice of flight (the flight class you’ll be flying in will be determined by the insurance provider)
- If you refuse transportation as provided by your insurance company
- Any pre-existing medical conditions noted on the insurance policy
4. Lost or Delayed Baggage
We treat our luggage with utmost care but we can’t expect everyone to do the same. It can get very frustrating and inconvenient when your luggage doesn’t show up or gets damaged. Travel insurance with coverage for this reimburses you for lost, stolen, or damaged bags and items and may cover the cost of personal belongings in case of a delay with the baggage.
As long as you can provide proof that your luggage was lost, stolen or damaged, most travel insurance policies can help recover the cost of the said items:
- Baggage and personal belongings if stolen or lost or damaged in a fire or another natural disaster (throwing it away personally doesn’t count as a natural disaster)
- Checked-in luggage when lost or damaged by a common carrier
Specific conditions may apply to lost documents, passports, visas, credit cards etc
It is the insurance provider’s choice whether they replace or repair an item as this depends on various policy regulations. In standard travel insurance, the following however will not be covered:
- damage to personal belongings unless checked in with the carrier
- items stolen from a vehicle that is unlocked (no visible signs of forced entry)
- items, out of your carelessness, which you lost or left behind somewhere
Best Travel Insurance
There are a number of insurance companies that offer travelers wide array of policies available. This can make choosing travel insurance quite the challenge. You want to make sure it’s comprehensive enough but won’t leave a big hole in your pocket. But finding the best travel insurance plan that fits your needs doesn’t have to be that difficult. Here are some factors to look at when choosing travel insurance:
1. Comprehensive coverage
Travel coverage comes in many shapes and sizes — some insurance companies sell only medical travel insurance, while others let you customize your insurance policy and cover the items most applicable and appropriate for your trip. Comprehensive travel insurance should cover at least the following basics:
- Medical care,
- Trip cancellation/interruption,
- Baggage loss/delay
- Worldwide coverage and assistance
Travel insurance tip: Choose the travel insurance with an array of available options and generous coverage. You’ll never know when you’ll need them.
2. International coverage
What’s the purpose of travel insurance if it won’t cover you internationally? You’re purchasing travel insurance because essentially, you’ll be travelling to a new place your current insurance does not cover. International travel insurance ensures that you’ll stay covered when travelling to foreign destinations.
Travel insurance tip: Make sure to choose a policy with medical and emergency insurance that will cover you anywhere in the world.
3. Reliable medical evacuation coverage
Standard medical coverage will cover your treatment, but medical evacuation is a separate coverage item that is just as critical. Getting flown home or airlifted can cost you a fortune. Not all insurance companies offer this. If you feel like your health is not in top condition, you might want to consider this when choosing travel insurance.
Travel insurance tip: See to it that your travel insurance covers both medical expenses and medical evacuation, these are often listed separately, so be sure to double check.
4. Financial capacity
To make sure your travel insurance is worth it, it should be able to pay you back your losses from a cancelled trip or hospitalization during a trip. Otherwise, it forfeits the purpose of having a travel insurance.
Travel Insurance Tip: Check out company reviews regarding payouts and claims, companies with poor payout might mean you won’t be getting what you paid for. Choose wisely and do some background research first.
5. Excellent customer service
Travel insurance companies should be committed to providing not only a good insurance policy but also a high level of customer service. They should be able to answer your queries and attend to your needs promptly.
Travel Insurance Tip: Look for providers who had your best interests in mind rather than their profits. Won’t answer your queries unless in exchange for personal information? A big no-no.
There is no single best travel insurance. It depends on who’s flying, for what purpose, the destination, and the budget. It is important to weigh all the benefits versus the consequences when planning to purchase travel insurance. Below are some of our recommendations.
Recommended Travel Insurance Providers
1. Single trip insurance – World Nomads
One insurance company travelers commonly come across is World Nomads. They offer simple and flexible insurance. You can buy insurance before the trip, and even while on the trip – that’s how flexible their offers are. They offer everything from the most basic policies to policies that cover all your activities.
According to their customers, they have good coverage (virtually anything can be covered – from trips to gadgets to activities). They also have a good reputation for paying out claims promptly. Another amazing thing about World Nomads aside from being a reputable travel insurance company is that they undertake humanitarian acts such as helping fund projects in poverty-stricken areas. Not only are you protecting yourself with travel insurance, you will also be supporting them in their charitable deeds. Get a quote from World Nomads below.
2. Annual Trip Travel Insurance –Allianz Global Assistance
Allianz Global Assistance is a large travel insurance company. It isunder the umbrella of Allianz SE, who has several businesses involved around different types of insurance and assets. They offer a wide range of solo, family, and corporate insurance services with worldwide coverage over more than 200 countries.
Allianz offers comprehensive insurance at relatively lower rates (cheaper premiums) thanks to the success of its parent company. The company works fast on claims and resolves most complaints quickly, ensuring high customer satisfaction.
So now that the insurance details have been explained and recommended companies given, let’s now cover one last area to help you find the best travel insurance for you.
How to Get the Most from Your Travel Insurance Plan
1. Decide when to purchase travel insurance
Once you’ve completed your travel arrangements’ it is time to proceed to the least considered, yet equally important part of your planning– purchasing your travel insurance. The best time to buy travel insurance is when you’re done planning your itinerary and done with the necessary bookings. In general, as a rule, the earlier you buy insurance, the bigger your coverage window. Don’t wait last minute to buy travel insurance, some policies may not cover last minute changes.
2. Read and understand your policy – fine print included!
It is your duty as the traveler and owner of the travel insurance to know its inclusions and exclusions. Don’t just rely on brochures or representatives to divulge information to you because they might miss something. Read the policy carefully – twice, or more if you must.
3. Ask for help when needed
If you cannot understand certain aspects of your insurance policy, don’t hesitate to contact your insurance company’s customer service team.
4. Prepare your evidence
When filing for reimbursements, make sure to keep evidence of your fees. Always keep a copy of your airline tickets and hotel accommodations receipts. Always have your medical certificate, receipts and other documents ready. These are tiny things we tend to miss out on. Without these, insurance companies reserve the right not to reimburse you.
Buying travel insurance may not be the most exciting part when planning your travel, but it will definitely be a crucial part. At this point you might still be weighing whether travel insurance is worth it or not. In the end, it will be your decision to make, but trust the thousands of travelers who can testify to how handy travel insurance can be. Surprising things can happen when you travel. Be prepared and have your travel insurance ready.
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