8 Things You Should Know About Insuring Your Travels

Whether you’re planning a quick get-away to the beach or mountains, a dream cruise of a lifetime, an adventure trek to India or an overseas business trip, you should consider travel insurance. Below are 8 common FAQs to help you navigate the world of travel insurance.

1. What is travel insurance?

Travel insurance typically consists of three major components:

Coverage for financial losses due to a variety of travel situations, such as having to cancel a trip, lost baggage, travel delay and baggage delay.
Per trip or annual coverage for travel medical and emergency medical evacuation.
24-hour assistance for worldwide emergencies, healthcare and transportation services.

2. What does it cover?

Coverage and limitations vary by travel insurance policy. More than 80 percent of policies sold in the United States are per trip travel insurance policies that bundle comprehensive coverage into a single policy.*

Some of the general types of travel insurance are:

Trip Cancellation & Interruption: The most used type of travel insurance generally covers non-refundable trip costs if you cannot travel due to unforeseen circumstances, such as illness or weather catastrophes.
Trip Delay: Reimbursement for expenses incurred when a trip is delayed.
Travel Medical Expenses: Covers costs incurred due to injury or illness that occur while on a trip.
Emergency Medical Evacuation: In the case of accident or illness, covers land, air ambulance and/or air transportation to the nearest appropriate hospital or medical facility, or in some cases all the way home. Without insurance, medical evacuation can run into thousands of dollars.
Supplier Default: Some policies cover deposits or payments lost due to the financial default and bankruptcy of covered travel suppliers, such as a tour operators or cruise lines.
Baggage/Personal Effects Loss or Delay: Covers expenses related to lost, stolen, damaged or delayed items during a trip.
Flight insurance: Covers accidental death while flying.
Assistance: 24 hour hotline for help with medical care, transportation and accommodation needs, notification of family and friends in case of emergency, and more.

3. Why should I buy it?

Reasons to buy travel insurance:

To protect your financial investment in your trip
To protect your personal items while traveling
To protect your health and well-being.

Travel insurance is good value for those who are concerned about: their trip being cancelled, delayed or interrupted for reasons outside their control; access to medical care while abroad and payments for those services; and protection of personal baggage.

4. How much does it cost?

The cost of annual travel insurance policies is dependent on coverage and coverage limits. Per trip travel insurance policies are typically based on the cost of your trip, your age and amount of coverage you want. Most policies range between 4% and 8% of total trip price.

5. When should I buy travel insurance?

If you are going to buy travel insurance, buy it when you book your trip if possible. Many policies include additional protection, including coverage for pre-existing medical conditions and supplier default if you buy the policy at the time you book your trip. You can purchase a single-trip policy each time you travel or an annual travel insurance policy covering multiple trips.

6. Won’t my other insurance cover me?

It is important to know what coverage you may have through your home or health insurance, or on your credit card. However, only travel insurance provides trip cancellation/trip interruption coverage, protecting your financial investment. And not all health insurance plans will provide full coverage when you travel internationally or outside of a designated network area. (For example, Medicare does not cover health care expenses outside of the United States.) Medical evacuation coverage is rarely covered in most standard health insurance policies.

7. Where can I buy travel insurance?

Travel insurance is available through most travel agencies, cruise lines, tour operators, and other travel suppliers. Travel insurance can also be purchased directly from a third party travel insurance provider.

8. How do I find a good travel insurance company?

Look for membership in the US Travel Insurance Association. UStiA member companies agree to abide by a code of ethics and professional principles. The UStiA web site has a list of travel insurance, travel assistance and related companies that meet the industry’s highest standards.

UStiA is a non-profit, national association of companies involved in the development, sales, marketing or implementation of travel insurance and related products and who have pledged to uphold strict criteria in terms of doing business. Among the association’s goals are to ensure that travelers have affordable access to travel protection and travel assistance; to educate consumers about travel insurance and related issues; to promote fairness, integrity and a commitment to excellence in the travel insurance industry; and to foster ethical and professional standards of industry conduct.

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* 2004 Travel Insurance Market Survey, conducted on behalf of the United States Travel Insurance Association (UstiA).