If you’re like most travelers, one of the last things you think about when planning a vacation is travel insurance. After all, it’s not as glamorous or fun as choosing a resort, deciding on what sites to see and picking which restaurants you want to call ahead for reservations.
However, travel insurance is an essential part of any trip, one that you shouldn’t ignore.
Types of travel insurance
The phrase “travel insurance” is an umbrella term that covers a wide range of insurance coverages. Depending on what type of trip you are taking and your personal insurance coverage, you likely won’t need every type available.
Travel insurance is available incomprehensive policies that include many different types of insurance and as individual policies that only include one type of insurance.
1) Cancellation insurance. Cancelation insurance is what most people think of when they think of travel insurance. This is protection should your trip be canceled for a number of covered reasons, such as an illness or death in the family, a natural disaster like a flood or a hurricane, or one of the travel companies ceasing operations.
The key words here are “covered reasons.” This type of insurance doesn’t get you your money back if you cancel because you have a business conflict, had a fight with your travel companion or don’t have any spending money to take with you at the last minute.
Whether cancelation insurance is a good investment depends on how much money you have at risk. If you cancel at the last minute and are able to get most (or all) of your money back, this type of insurance doesn’t make much sense.
However, if you have to pay thousands of dollars in advance, as with a cruise or all-inclusive resort package, and that money is non-refundable, it’s a good idea to purchase cancellation insurance.
2) Medical insurance. Most U.S. medical insurance policies limit their coverage to medical services provided in the United States.
That means if you’re injured or become ill while you are traveling abroad, you’ll have to pay for your care out of your own pocket.
If your injury is severe enough to warrant air medical transport to the United States, that bill can be quite steep indeed. One thing to keep in mind when shopping for travel medical insurance is that most such policies exclude pre-existing conditions.
That means if you are being treated for heart disease in the United States and you have a heart attack while on vacation, the cost of your care will likely not be covered.
However, if you sprain your ankle walking up the Spanish Steps in Rome, that injury will most likely be covered.
3) Rental car coverage. Another type of insurance to consider is liability and collision coverage for the rental car you’re renting. Some comprehensive travel policies cover rental cars.
In addition, some personal car insurance policies cover policyholders when they rent a car. If not, you’ll want to purchase this insurance at the rental counter or risk being liable for an expensive care should you be in an accident.
4) Flight insurance. Flight insurance is a (very) temporary life insurance policy that offers benefits to your family should you be killed in a plane crash.
Although this type of insurance is usually very affordable, most people have their own life insurance policies in place and the odds of your being killed in a plane crash are really very small.
This type of travel insurance is a good idea only if you don’t have any life insurance coverage already and/or if it comes bundled with travel medical insurance.
While travel insurance may not be the first thing you think about when you get ready to plan your family vacation, setting aside a few dollars for this travel essential can give you peace of mind plus save you thousands of dollars should you or one of your party become ill overseas.