December 11, 2018

What is Travel Insurance?

Travel insurance helps recoup your financial losses if something unexpected happens on a trip. Is it worth it? Here are 10 ways it protects you.

© CreditDonkey

You're going on vacation. You've saved for it and you're ready to start packing. Your trip will be a dream come true... or will it?

No one wants to think that something bad will happen on their trip. But let's face it - things happen.

Even delayed luggage could put a serious damper on your plans.

You might've heard about travel insurance. What does it do? Is it worth the extra cost to protect yourself?

Read on.

Trip Insurance vs Travel Medical Insurance

Most policies fall into two categories: trip insurance and travel medical insurance.

Trip Insurance

Trip insurance protects your trip and the money you spent.

  • Cancellation:
    No one wants to cancel their vacation, but life happens. Sometimes you have no choice and other obligations take priority. Trip cancellation insurance will reimburse non-refundable expenses you have already paid (such as hotels, flights, tours).

  • Flights:
    Trip coverage can help you rebook a missed flight and cover the fees. Ever sprinted across the airport to catch a flight? When your 400-meter time is not up to par, insurance can help with rebooking costs.

  • Interruptions:
    Airlines can, and do, change flight schedules. Bad weather or mechanical problems can alter flight plans. If your plans are interrupted, trip coverage helps get you on an alternative flight and cover the fees.

  • Baggage:
    Airline lost your luggage? Washing your undies in the sink of a hotel bathroom? At least your trip coverage helps with the cost of replacing your essentials.

  • Disasters:
    The tropics are beautiful - unless a storm tears the beach apart. Old world cities are enchanting - unless there's a political riot. It's scary enough to watch on TV. No one wants to put themselves in that situation. Insurance can help recoup your pre-paid costs if your destination isn't safe.

If you travel often, it's smart to consider a credit card that has travel benefits. Travel reward cards usually offer a range of travel benefits, including trip cancellation and lost baggage protections. You just have to book the trip with the credit card to receive these insurance benefits. However, they don't provide travel medical insurance, so make sure you understand what the coverage is.

Travel Medical Insurance

Travel medical insurance covers expenses that your normal health insurance won't pay for while you're traveling.

  • Getting Help:
    You're probably not familiar with the healthcare options on your trip. And even though Americans think everyone speaks English - they don't. Travel insurance can help you, in your native language, get medical treatment. This includes finding the best local hospital and arranging your transport. Travel insurance companies have multilingual staff to help with translating.

  • Payments:
    The sniffles you developed on your flight have gotten worse. You have a fever and you may need a hospital. There's a good chance the hospital wants payment from you - in full - before you're discharged. This isn't how your family doctor works. It's a shock. If your limit is high enough, you can put the bill on your credit card. If not, now what?

    Enter travel medical insurance. Insurance companies form relationships with hospitals all over the world. If your insurance and your hospital know each other, you're in luck. The hospital will likely bill the insurance company instead of you.

  • Evacuation:
    You've always wanted to go rock climbing. What better place for your first time than the mountains of Central America? Use your imagination. This story could turn into a nightmare pretty fast. Sometimes injuries are so bad the local hospital can't help. A medical evacuation will get you to a better hospital. When it's time to recover, your insurance can bring you home. This could involve a medical escort or even an air ambulance. Having an accident on your vacation might seem unlikely, but it happens.

Travel medical insurance is best if you are traveling abroad, or if you're planning on participating in extreme sport activities on your trip.

Travel insurance policies offer many different benefits and coverage options. Some benefits overlap between trip plans and medical plans. Keep in mind your specific needs and destination when shopping for travel insurance. Select a plan that best covers your health and your money.

10 Reasons to Buy Travel Insurance

  1. You're canceling your trip:
    Doses of cold medicine aren't helping your kid feel better. You must cancel your vacation. Travel insurance helps recoup the money you spent on plane tickets, tours, and non-refundable expenses. For a family vacation, this could mean saving thousands of dollars.

  2. Your flight is canceled:
    Your flight to Thailand is canceled due to mechanical issues. It's a headache, but do you want to get on a plane with engine problems? You're forced to buy a new ticket and stay in the airport hotel. Instead of blowing your spending money, let insurance cover the cost of the new flight and hotel.

  3. You missed your connecting flight:
    You planned your tour of the Parthenon perfectly. When your connecting flight to Greece leaves without you, your plans don't have to be ruined. Trip coverage can help get you on the next best flight to catch up with your tour group.

  4. Your baggage gets lost:
    You're in London but your luggage isn't. Trip insurance helps track down lost baggage. Better still, it covers the cost for some replacement items while you wait. You won't have to tour Kensington Palace in sweats and flip-flops.

  5. There's a terror attack:
    A bomb goes off in Istanbul, where you planned to visit in a few days. The embassy issued a travel warning for U.S. citizens. You're left with a canceled trip and an empty vacation account. That is, unless you have insurance. Your insurance policy will help reimburse the money you spent on your trip.

  6. There's a natural disaster:
    Every year there's a tropical storm somewhere. This year, it happens to be pounding the St. Croix resort you booked for next week. If the resort has a no-refund policy, your insurance can cover the expense.

  7. You get sick on your trip:
    Mexico was beautiful until you ate some ice at the hotel bar. Now your view consists of the bathroom floor. Montezuma's Revenge gets worse and you decide you need a doctor. Your insurance can arrange transport to the hospital. At the hospital, the insurance team can help with the Spanish translation. When it's time to pay the bill, your travel insurance can help with that, too. Instead of begging your parents for help, work with your insurance to pay the bill.

  8. You need an emergency evacuation:
    Montezuma's Revenge has gone from bad to worse and you're not getting better. Contact your travel insurance. Their staff will step in to work directly with your doctor. Your insurance can arrange your transfer to a better hospital. If you need it, they'll also send a medical escort.

  9. Someone at home dies:
    You're touring the Egyptian pyramids with your fiancé and you get a phone call. Your elderly grandparent has died. The services are in less than a week. No one wants to imagine this scenario, but it happens. If it does, your insurance can cover the flight home and back to join your fiancé.

  10. You lose your passport:
    After some heavy-duty partying in Ibiza, your passport is MIA. It's scary to be in a foreign country without your passport. You have to get it sorted out but you're not sure where to go. Your insurance team can tell you what to do and help with the documents. Your policy may even cover some of the replacement costs.

More from CreditDonkey:

What Does Travel Insurance Cover

How Much Does Travel Insurance Cost

Is Travel Insurance Worth It

Travel Insurance

Allianz Travel Insurance Review

What is covered by Allianz travel insurance? A lot. Keep reading to learn if this company is good for you.

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