The coronavirus has thrown a wrench into everyone’s summer plans, grinding to a halt one of the busiest times a year for travel. But global pandemic or not, we wanted to bring you the need-to-know information on travel insurance and if it’s right for you when the time comes to pack a suitcase and jet off on your much-needed vacation.
Travel insurance tends to be one of those insurance policies that people tend to think aren’t needed, much like an extended warranty on a device or appliance. And if you’re shelling out a lot of cash on your trip, you’re likely to hesitate to spend more on travel insurance. But sometimes it’s worth the cost.
What Travel Insurance Covers and How Much It Is
Like other insurance policies, travel insurance coverage varies by carrier and individual policy. In general, travel insurance is meant to protect you against unforeseen travel circumstances; for instance, if you get ill and have to cancel your trip. You can purchase travel insurance directly from an airline or cruise carrier, as well as an independent travel insurance agency. The cost of travel insurance ranges from about 5% to 10% of the total cost of your trip.
There are four main types of coverage included in travel insurance.
Trip Cancellation and Trip Interruption
This reimburses you for non-refundable travel costs if your trip is cancelled or seriously delayed due to a natural disaster, illness, or if your carrier goes out of business. Independent and carrier-provided insurance policies offer protection up to the amount you purchased. If you want to add coverage to be able to cancel for any reason, be ready for the cost to raise. This type of insurance will allow you to cancel your trip up to a few days before departure and get 50-75% of your costs back. While you might not think at the time you’d change your mind, you must also consider events such as a job loss or other financial circumstances that could impact your decision.
Baggage and Personal Items Coverage
If someone steals your bag or it is lost or delayed, this coverage will help reimburse you for new gear. Typically, coverage pays $500 to $1,000 per bag.
Travel Accident Insurance
It is important to stay covered medically when traveling abroad, just as you would back home. If your healthcare policy does not provide coverage abroad, travel accident insurance is vital. This typically covers doctor visits, ambulance rides, hospital stays and prescription medication. It may also cover the cost of evacuation to get you back home during a medical emergency.
Accidental Death or Dismemberment
If someone in your party dies or suffers a life-altering accident, this insurance feature pays out up to about $500,000, depending on the situation.
Is Travel Insurance Worth It?
Now that you know what is typically included in travel insurance, you can consider if the cost is worth it. If you are traveling abroad and your health insurance does not cover medical emergencies or healthcare outside of the U.S. travel insurance is strongly encouraged. If a large portion of your trip is non-refundable and you are unable to go due to unforeseen circumstances, it may also make sense to have travel coverage. If your life insurance policy extends death and dismemberment coverage to travel abroad or you aren’t worried about missing personal items, travel insurance may not be necessary for you. Ultimately, it is up to each person’s unique circumstances to determine whether travel insurance is worth additional cost or not.
So, where will you head once it is safe to do so and travel bans are lifted? Have more questions about travel insurance? Give us a call. We’d love to chat and daydream about island getaways.