What is Travel Insurance and why is it Necessary?
Just like health and life insurance, travel insurance is one of those products that nobody wants to pay for, but everybody feels that they should have. The chances are high that you will not even need insurance while traveling. However, a good travel insurance policy can make all the difference in case of any unforeseen circumstances and is worth having for the peace of mind alone.
Travel insurance covers you in the event of such things as a delayed or canceled trip, death or illness, emergency medical assistance and lost baggage. If you buy an airline ticket, the airline already includes liability for lost or damaged luggage; the amount is usually adequate but it will not cover any irreplaceable or particularly valuable items. If you do not have any type of travel insurance and need to change your travel plans, the cost of changing an airline ticket or cruise itinerary can be substantial, especially on short notice. Also, the costs of emergency medical assistance while traveling overseas are beyond the budget of many individuals and families.
Most people take out a policy known as trip cancellation insurance; and as the name suggests, this type of insurance specifically covers the cancellation of your trip, either by yourself or by your airline, cruise line or tour company. The most common reasons for a trip being cancelled are an airline or cruise company going bankrupt, natural disasters or weather delays, strikes or labor disputes. Trip cancellation insurance is easy to get; it can generally be purchased directly from your airline, travel agent or cruise line.
It is a good idea to have travel insurance that protects you in the event of your airline going bankrupt. Several of the major airlines have declared bankruptcy recently, and many people are understandably concerned about booking a trip several months ahead on an airline that may not be in business. An airline that declares bankruptcy and ceases operations is required by law to refund your ticket or protect you on another airline that provides a similar flight schedule. However, it is still reassuring to have the additional peace of mind that a travel insurance policy provides.
As far as trip protection for cruises is concerned, it is usually a good idea to have the extra coverage. In fact, many cruise lines require you to have adequate travel insurance and may want to see evidence of your coverage, such as a copy of the policy. Many people purchase travel insurance or trip protection insurance if they have a particularly expensive or a once in a lifetime trip, such as a honeymoon. People also tend to take out more travel insurance the further away from home they are traveling to, especially if it is somewhere remote, dangerous or primitive.
The cost of travel insurance can vary greatly, depending on the amount of coverage you need, the length of your trip and even whether you plan to participate in what the travel industry describes as hazardous sports, such as diving, skiing and skydiving for example. If you travel frequently throughout the year, you can generally take out a policy that will cover multiple trips; and if you are traveling as part of a group or as a family, some travel insurance policies will cover groups specifically – taking out group coverage can often be significantly less expensive.
In general, most comprehensive travel insurance packages that cover everything that a traveler might realistically need tend to cost between 4% and 8% of the overall cost of the trip itself. If you need insurance to cover extras such as emergency medical evacuation, hazardous sports coverage, or emergency reunion services (which covers the costs of flying family members to you if you are hospitalized) your travel insurance will almost certainly cost quite a lot more. If you do not want these extras, then do not feel that you have to pay for them. In most cases, it is entirely up to you.
Pre-existing medical conditions can often be an issue when purchasing your travel insurance. Some policies may include pre-existing medical conditions while others may not; it just depends on the policy. Having a pre existing condition generally means you may be paying more for the coverage, but it will not necessarily prevent you from being insured. Make sure you accurately inform your insurance company of any pre-existing conditions, otherwise your insurance company has the right to revoke your policy at a later date.
Do not forego travel insurance just to save money. You probably will not need it, but you may just be glad that you took it out.