Travel insurance may make your vacation more expensive in the end, but it could also save you thousands of dollars. Not only can travel insurance reimburse you if your trip is interrupted or canceled for reasons outside your control, but it can cover pricey medical bills, pay for medical evacuation in the event of an emergency, replace lost luggage, and more.
But there are so many different types of travel insurance policies — and so many travel insurance providers — that finding the right policy isn’t always easy. You have to choose a company you trust first and foremost, but you also need to find a policy that makes sense for your trip and your budget.
What to look for in a policy
However, travel insurance policies aren’t necessarily created equal. In addition to buying insurance from a reputable company, you need to pick a policy that includes the types of coverage you need for your specific trip. Here’s what you need to know:
Get the basics right
As an industry standard, insurance companies allow you a 14-day cooling-off period, giving you the time to check through these basics on your policy and make sure everything is covered relevant to your trip:
Medical cover: For most of us, this is probably the most essential part of any cover; we all want to know we’re going to be OK should some medical disaster befall us in a far-off land. Consumer watchdog Which? reckons you should be looking for a policy that provides at least £2 million worth of medical cover for Europe and at least £5 million for worldwide.
Look out for further cover within policies, as some insurance companies provide 24/7 online or telephone consultation with an NHS GP back home in the UK, which is a great support.
Luggage and personal items: This represents the third-highest type of insurance claim that Allianz Assistance receives, and there are two things to bear in mind here. First, does the policy provide a sufficient level of cover for your bags? A decent one will provide coverage of £1,500 as a minimum. Second, be sure to check what the limit is for a claim on individual items; cheap policies tend to set this pretty low, particularly policies available on price-comparison sites.
With more and more budget airlines requiring you to put your hand luggage in the hold during your flight rather than in the overhead lockers, your insurance policy may not cover you if anything gets broken. Some insurance policies only cover for damage if the item is kept on your person, so be sure to read the fine print before parting with your precious belongings.
Cancellation policy: According to Allianz Assistance, cancellation is the most common reason for insurance claims. Having to cancel or cut short a holiday is bad enough; ending up out of pocket as a result is pure misery. Check how much you have paid per person for your holiday and make sure you purchase a policy with the right amount of cover, including cover for any excursions you have already organised and paid for. Your policy should also include the cost of getting you home if your holiday is cut short or if you miss a connection due to an unexpected delay.
Cover yourself for last-minute cancellations and always consider buying travel insurance at the same time as buying your holiday as advance preparation. Unexpected illness or injury, jury duty and burglary are some top reasons for people needing to cancel their holidays, yet one in five of us only buy it just before we travel.
Duration of Policy
Depending on your travel plans, you may opt for a single trip or a multi trip policy. A single trip policy will only cover you on a single trip, which could be a yearly vacation. A multi-trip policy, on the other hand is more suited for travelers who make frequent trips in a single year. The benefit of taking a multi-trip policy is that not only does it save you the hassle of having to take a separate policy for each time you travel, it also helps save money. In case of either of the policies, do check how many days of coverage is provided. While selecting a travel insurance policy, keep in mind the possibility of having to extend your trip. Considering that, choose a policy with a duration which slightly exceeds the duration of your trip itself. You could, alternately, also opt for a policy which features policy extension, in case your trip is extended and you need additional cover for a brief duration.
Though it might sound quite obvious, but do check whether the policy you’re about to choose covers the destination you’re planning to travel to or not. This is because, different policies have different terms and policies may have global coverage or specific geographical coverage. In case of a global policy, do check the clauses for further details and sub limits. Also, premiums may differ depending on where you are travelling. In case of travel to slightly higher risk countries, the premiums may be higher, along with stricter restrictions. Compare this feature between the policies you are short listing.
You can expect to pay anywhere from 5% to 10% of your total trip expenses to cover travel insurance. There are a few things you can do to save money on a travel insurance plan such as choosing a higher deductible or electing for the “basic” travel insurance policy without all of the additional policy add-ons such as identity theft protection, concierge services, rental care damage, coverage for pre-existing medical conditions, travel companion benefits, expanded luggage coverage or trip cancellation coverage for any reason just to name a few.
International vs. Domestic Traveling
Your destination will determine whether you choose an international or domestic travel insurance plan. Not all travel insurance policies cover international travel and travel to certain “named” countries may be excluded from coverage. Another thing to consider for both domestic and international travel is medical expenses. If you must have emergency care on your trip, you could likely have to have care provided by an “out-of-network” healthcare provider. If your health insurance does not cover all of the out-of-pocket charges, your travel insurance plan could make up the difference.
Check for protection against failure
Travel insurance can grant you peace of mind that your flights or holiday will be covered in the event of an airline or holiday supplier suddenly ceasing to trade. Be sure to check your policy for details of cover in the event of airline or travel agent failure, as this is often not included as standard.
Whichever insurance company and policy you go for, we recommend having paper and digital copies of your insurance documents handy, as well as any emergency contact numbers you may need, so that you can always access the information when you’re away.