Travel Insurance: Is It Necessary and What You Need To Know

The skinny on travel insurance...

Travel insurance may sound lame but it can save your booty when you find yourself in one of those "it will never happen to me" situations.

Just like heath or car insurance, not all travel insurance is the same.  It is wise to know what you are going to need covered (value), what you can afford to pay (do not go into debt for this) and your destination before you buy.  As we know in the insurance field, cheaper is not always better so don't scrimp...just be informed.

Picking your policy

Know what you need so you can be clear to insurance agents - they cannot help you if you cannot help yourself.  Factors like your age, destination, health, activities you plan on doing while gone and how long you will be gone are things you need to be clear on.  

If you are a frequent traveler then annual policies will typically be cheaper than buying a single trip policy each time.  And if you travel with your whole family I suggest a joint policy but make sure you are individually covered if you are not all traveling together. Then, if you are planning on staying away for more than 90 days look into a "long stay" or "backpacker" policy.

Research, Research, Research

Before you purchase a large item like a television, how long do you shop around for?  Take that answer and apply it to your travel insurance shopping.  It is so incredibly important you know what your options are and to find the best fit for you.  There is a huge market and the best deals are usually found online so you can compare quotes easily.  

Check out these websites

CSA Travel Protection

MH Ross

TravelSafe

Travelex

When applying online go through your application with a fine tooth comb to make sure you have declared all relevant facts and if you have any questions it is always best to contact the agency whom you are applying with.  

*Always think what if...*

What to look for

There are three main categories that you need to understand: travel benefits, medical benefits and the help and support features.

Travel Benefits

Imagine you have planned a trip for months down to every last detail even already bought insurance but then something prevents you from starting the trip.  Do you know the trip cancellation policy or how you receive compensation for the prepaid and nonrefundable expenses you are already incurred?  These are questions you need to think of before you purchase a policy.  You can have things covered like missing a connection that throws off your entire trip or if the airline loses your luggage that can be covered too.  

These are all benefits that you would specifically look for in a policy among other perks you may want - just research :) 

Medical Benefits 

I feel this is the most important.

I would like to tell you a little story of friend of mine who could of used travel insurance with medical benefits.

A few years ago a guy I know was in Nicaragua on a surf trip and planned on being there for a month or so.  After a couple of weeks he found himself in a nasty situation; he was walking through an uncleared field to get to a surf break when he tripped and sliced his  knee cap open on old and rusty piece barbed wire.  At first he did not realize how bad it was or I don't think he understood what could happen without proper treatment.  Regardless, he did not go to the hospital until a few days later when it was super infected.  He was hospitalized and they treated him with typical antibiotics.  It kept getting worse and he realized that if he did not get back to the States he could lose his leg.  He had to change his flight, pay the hospital and whatever expenses he incurred in his travel to and from the city from where he was staying on the coast.  When he arrived back stateside the doctors told him he was on the verge of gangrene and if he had waited any longer he could have lost his leg. Long story short....just imagine what that simple mistake cost him since he did not have travel insurance.

Some policies have benefits that cover any sort of medical or dental emergency caused by accident or sickness.  Others have policies that subdivide the categories for medical or dental and others that covered sickness or accident.  Most, but not all, budget policies cover costs of emergency medical evaluation but be clear on what their compensation would be for treatment.  Another perk to look for is accidental death and dismemberment, some carry this and others do not - again what sort of activities will you be doing while away.

Extras

Car rentals are a prime example of the many "extras" you will have on a trip that are not included in the primary policies.  Also, do you want to have your loved one that is traveling with you covered?

Help and Support

This area is pretty cut and dry.  Most companies offer a 24-hour-toll-free or collect telephone access to travel and concierge services.  Also, once you purchase your policy you may find yourself having buyers remorse and researching the policy one more time to find you do not want it.  If that is the case just remember you have a review period that immediately follows your purchase giving you the opportunity to cancel your purchase and receive a full refund.  All review period lengths vary so check before you purchase.  

Travel Insurance Tips

* Check for multiple excesses - if you lose your bag, will you pay one excess or one for every item in the bag?

*Free credit card insurance...is it really free?

Some credit cards offer travel accident insurance free but it is not the same as travel insurance.  It only offers limited compensation for personal accidents abroad, not medical expenses.  But then some credit card companies do offer free travel insurance but be sure to read the policy carefully before deciding it is the only one you need.