Your decision to take out travel insurance will depend upon:
â¢ The risks that you are willing to accept and those that you aren't
â¢ The risks associated with your destination
â¢ The activities you intend to undertake
â¢ The expense of your trip
â¢ Any pre-existing medical conditions
â¢ Your personal financial circumstance
Do you need it?
Well... thats up to you... but consider the following:
If, a week before you leave on the $10,000 trip of a lifetime you need to cancel the trip because the airline ceases operations, a family member passes away, your wife leaves you, you fall ill, there is a flu pandemic in your destination country or any one of a number of reasons, you will wish that you had trip cancellation insurance.
If you are involved in a car accident overseas in a country with sub-standard medical care and you need to be evacuated home, you will wish you had travel insurance when you are presented with a bill that could reach into the 10s in not 100s of thousand dollars.
Types of Insurance
There are two major forms of travel insurance:
Complete coverage including trip cancellation prior to departure and trip interruption during travel, and medical coverage during the trip only. Both forms include baggage loss protection.
Complete coverage is considerably more expensive than just medical coverage.
Before you consider travel insurance, first check if you have any coverage (and what the coverage is) with any of your current insurance policies (life insurance and home insurance)
- Some credit card companies also offer a level of travel insurance for their card holders.
- Most credit cards offer a very basic level of cover called "Traffic Accident Cover" which only covers the traveler whilst they are "literally" traveling
- Credit card travel insurance tends to be very basic, and is often called "Travel Accident" cover.
- It does not cover cancellation, interruption or possesssions.
Areas of Coverage
Trip Cancellation and Interruption Insurance
- Definitely worth it if you are going on an expensive trip or you have secured a budget travel deal with a non-refundable ticket
- Probably not worth it if your return flights are worth $59!
- Interruption insurance refers to something as simple as a Doctors visit causing you to miss a fligh
Health Care Insurance
- Your existing health care provider may (but will probably not) cover you for health care when you are overseas.
- Some countries (particularly developing countries) will admit you to hospital without caring about insurance coverage, but won't let you leave until you pay.
- Health care insurance can help facilitate payment in these situations and act as an advocate to ensure that you are not overcharged.
Medical Evacuation and Repatriation Insurance
- This is generally a more expensive clause within the policy (an annual subscription of around $400 approximately).
- Some covers will insure you for initial treatment and stabilisation and then send a medically equipped jet and staff to fly you to the Doctor and medical facility of your choice
- Others will just fly you to the Doctor and Medical facility of their choice.
- Most airlines have a policy for lost baggage to certain payout limits.
- If these limits are not suitable for you, then baggage insurance may be a good idea.
Adventure / Extreme Sports Insurance
- Most basic travel insurances will not cover you if you intend to participate in adventure sports.
- If you are climbing, some will only cover you to a certain altitude.
- If you are diving, some will only cover you to a certain depth
- There are third party insurers that can provide you with coverage - but it is expensive.
Acts of God / Force Majeure
- Most policies will include "force majeure" (Act of God) clauses, which will include natural disasters like tsunamis or earthquakes.
- In general, travelers will not be covered (completely) for such events
Terrorism / War
- Some will cover your trip cancellation if (for example) an act of terrorism occurs in the country you are travelling to or from
- Others will not cover you if there is a last minute "anxiety" ie: September 11 for trip cancellation
- Some insurers offer business specific clauses (at a fee) for business related interruptions including:
- Being required to work during the trip dates,
- Re-assignment or leave cancellation,
- Various damage to a business locations
- Most insurers will provide an emergency assistance service that will assist you if your passport or key travel documents are stolen or lost
- They can also provide you with a list of English speaking medical and legal help for most countries