Travel Insurance

Photo of a big happy family walking on the beach

You're probably going on a trip. So first of all, congratulations! Now, what about all those nitty-gritty details you have to think about, like, let’s say, travel insurance?

This article does not aim to be a full and analytic guide concerning those interested in purchasing a travel insurance. Instead, it aims to consist a brief introduction for the skeptical travelers on the dilemma of “To buy or not to buy” travel insurance, as well as some details that should be taken into account.

Travel insurance offers travelers coverage for unforeseen problems, from a cancelled flight to a serious illness—or in rare cases, the financial default of a travel supplier. If an illness, accident, or other covered unforeseen circumstance forces a traveler to cancel or interrupt their travel plans, they face two financial losses—money invested in nonrefundable pre-payments and medical expenses. This won't include coverage for essential steps on your trip that you failed to arrange for yourself, e.g., lodging, meals, fully adequate connection times between flights.

In case you feel like purchasing travel insurance for international trips, it is recommended to do so from an insurer in your country of residence, which means the country to which you'd want to return to after a serious medical emergency and/or the country you'd need to travel to if a family member became very ill (these are assumed to be the same country). You can also obtain travel insurance through your personal insurer, travel agents that offer this service or a specialist travel insurer.

If you travel within the EU or in Iceland, Liechtenstein, Norway and Switzerland and you have a European Health Insurance Card (which has replaced the old E111 form) you will get discounted or free medical treatment at public health centers in the 25 EU countries and the four mentioned above.
 

Consider...

In practice, to wisely purchase coverage, carefully read the policy before buying to assure that it provides the coverage you need. To be able to use your policy and procedures effectively, print copies and take two or more in separate bags. In addition, take copies of the instructions on how to contact the insurer's claims section at least in two separate bags.

Exclusions
Most policies have a long list of activities that are excluded from coverage. These can include, for example, waterskiing or mountain-biking, which you might do without even thinking about insurance. So before buying, read through the list and make sure you won't be doing anything that will invalidate your cover.

Existing or undeclared medical conditions
Insurers are hot on this. If you have treatment abroad for a condition from which you had already suffered but had not told the insurer about, any claim is likely to be denied. Even if you have an annual policy, you are still duty-bound to tell the insurer if you develop a condition during the term of the insurance.

Age limits
Travel insurance becomes an expensive problem once you pass 65. Premiums tend to double, and they rise even more sharply at 75 or 80. Many insurers won't offer cover at all.

Dates
When buying travel insurance, you should review the dates of coverage (include the day you leave and the day you arrive home plus a day or two for delays), that it covers what you need, and the exclusions.

One-off or annual policy
If you or members of your family travel abroad more than three or four times a year, and especially if one trip is a ski holiday, a single policy covering you for the whole calendar year - an "annual multi-trip policy" - is likely to be your cheapest option, and certainly the most convenient one.

Existing coverage
Sometimes you may be insured via an existing deal or your current health insurance policy. Are you covered under your parents' policy or through your school? Does it protect you outside your country? Some credit card companies insure any trip you take as long as you buy the tickets on a particular credit card. Business travelers may be covered by a company-wide insurance policy, but if you intend to take any side trips or have a personal holiday, check the coverage: usually personal holidays on the side must be of a fairly short length to be covered by a business policy. Be sure to check any "existing coverage" carefully and ideally get confirmation in writing of your coverage. Credit card insurance deals, for example, often offer just basic coverage, and may be invalidated for travelers who paid travel deposits in cash rather than using the card.

Pay attention to the details
As you buy, the number and age of travelers, plus the total known and estimated costs of the trip will primarily determine the cost of insurance, though other factors influence it. Do not underestimate any facts as you apply for/purchase a policy. Your claim for reimbursement for some "covered" cost may be denied.
 

To buy or not to buy travel insurance?
 

There is no important need to buy a travel insurance:

  • If you are in for a short, simple and inexpensive trip.
  • If you are spending less than $5,000, or if you don’t mind losing the value of your trip, should something happen before or during your vacation.
  • If you have insurance that would cover a medical emergency or medical evacuation.
  • If your trip includes components that are not covered by insurance. For example, say you’re staying at a friend’s house, using a flight voucher, or redeeming frequent flier miles for your vacation. Travel insurance would probably be minimally useful. (Some travel insurance policies may cover the cost of re-depositing miles when you need to cancel for a covered reason.)
  • If you have a pre-existing medical condition that would not be covered. Read your policy carefully; some travel insurance policies do cover existing medical conditions when certain requirements are met. Normally, preexisting conditions that are controlled are covered if the policy is purchased within a certain time following initial deposit and payment of your trip.
  • If coverage would be redundant. For example, if your credit card or other insurance would cover the same event—then don’t worry about it.

Think twice:

  • If you are a nervous traveler and just need the peace of mind that comes with having a policy. Even if you can’t recover all of your money, you may still be able to take advantage of certain benefits.
  • If you are spending more than $5,000 on a vacation. That’s known as a “big-ticket” purchase.
  • If you have a complex or lengthy itinerary. If you’re on a tour with a lot of moving parts, then insurance could be useful to avoid a domino effect. When one part doesn’t go as planned, the right policy can provide additional economic support, while your travel agent is dealing with a quick recovery.
  • If you have an important medical condition.

 

Author: Konstantina Dritsa

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