How to Compare Travel Insurance Plans

Imagine you’ve been planning your dream vacation for years. Whether that’s a golden beach with salt in the air or the thrilling rides of Disneyland, your heart is set on the trip. You book all the best hotels and restaurants. Unfortunately, just days before your flight, you get too sick to travel. What happens to all of those nonrefundable trip expenses?

Traveling comes with financial risks. Let’s go over how to compare travel insurance plans so you can obtain comprehensive and affordable coverage.

Understanding Travel Insurance

What is travel insurance?

Travel insurance is a type of insurance that protects travelers against financial losses and risks. It is crucial for travelers because it offers valuable protection when an unexpected incident affects the trip. A travel insurance policy can cover:

• Trip cancellations and delays
• Lost luggage
• Emergency evacuation
• Emergency medical assistance
• 24-hour travel assistance hotline

Common myths about travel insurance

Travel insurance only covers medical bills

Travel insurance policies can cover far more than simply travel medical insurance. From lost luggage to emergency evacuations during a trip, travel insurance comes in many forms. You can even tailor your insurance policy to meet your specific needs through insurance riders, add-ons, and endorsements.

Travel insurance is only useful for risky trips

While regions with travel advisories and higher risks can greatly benefit from travel insurance, travel insurance can benefit most travelers regardless of destination. Accidents while traveling can happen to anyone, anywhere. Having travel insurance can provide valuable financial protecton and peace of mind to a traveler.

Cancel for any reason has no limits

While you can obtain a “Cancel for Any Reason” add-on for your travel insurance policy, this coverage doesn’t necessarily get all of your money back. Usually, you can expect 50% to 75% of your money refunded. There might also be some requirements you need to meet, such as needing to cancel the trip at least 48 hours before your scheduled departure.

Travel insurance is best for full-time travelers

Those who travel often for work or personal reasons can benefit from an annual travel insurance plan. However, digital nomads and expats who travel between different countries all the time might not be eligible for traditional travel insurance. Most standard travel insurance policies only cover trips of 60 days or less. If your trips last longer, you might need to purchase a specialized travel insurance policy to ensure adequate coverage.

Types of Travel Insurance Coverage

Trip Cancellation/Interruption

It is helpful to have trip cancellation and interruption insurance to cover unforeseen trip disruptions. This type of coverage can reimburse you for prepaid, nonrefundable travel expenses, such as hotel and airline costs.

Cancellation: If your trip gets cancelled due to an extreme personal or financial hardship. Examples include if you need to cancel your trip due to a hospitalization, the death of a family member, jury duty, natural disasters, or war.

Delay: If you can’t travel due to a delay, with a reason that is outlined in your policy.

Interruption: If your trip gets cut short for eligible reasons.

Cancel for Any Reason (CFAR): This is a special, more expensive type of trip cancellation coverage. It will give you a reimbursement for a portion of your trip costs if you cancel the trip for nearly any reason.

Medical Coverage

Travel medical insurance can cover medical expenses while you’re traveling. Travel health insurance can be helpful if your health insurance policy, such as Medicare, does not cover injuries and illnesses while you’re traveling abroad. Medical travel insurance can cover:

• Emergency medical expenses
• Hospitalization
• Outpatient treatment

Pre-existing conditions are usually excluded from travel medical insurance. Other common exclusions include fear of flying, extreme sports injuries, and travel to high risk destinations.

Note that medical tourism is also not covered. This means that if you’re traveling to seek medical treatments such as cosmetic surgery, your travel insurance provider will not cover it.

Emergency Evacuation and Repatriation

In the event of an emergency evacuation or repatriation, a travel insurance policy can cover expenses related to medical evacuation and returning to your home country. This may be necessary if there is civil unrest or a political emergency.

Baggage and Personal Belongings

Baggage loss or delay coverage can provide reimbursements in case your luggage gets lost, stolen, or damaged. This benefits travelers whose baggages get lost temporarily or permanently by an airline. Baggage loss coverage usually reimburses travelers for belongings that are stolen during a trip.

Receipts and other essential documentation are crucial when it comes to filing a baggage loss claim successfully. Financial limits may also be imposed on certain valuables, such as jewelry and musical instruments.

Accidental Death and Dismemberment

An Accidental Death and Dismemberment (AD&D) travel policy will provide financial protection in case of an accidental death or severe injury. Most AD&D insurance for travel covers three parts up to a certain coverage limit.

• Flight accident insurance: If the accident occurs during a flight on a licensed commercial airliner.
• Common carrier: If the accident results from traveling by public transportation (e.g. a train or bus).
• General travel: If the accident occurs during a trip.

It’s important to know that accidental death coverage excludes certain claims. For example, the travel insurance policy will not grant a payout if the death was caused by a drug overdose. In addition, only some injuries are covered, such as hand, foot, limb, and eyes.

Accidental death and disability insurance might not be necessary for travelers who already have a life insurance policy.

Additional Coverage Options

You may benefit from certain travel insurance add-ons and tailored options. Here are some niche insurance coverage options.

Adventure sports coverage: Adventure sports travel insurance covers expenses related to hazardous activities while you’re traveling. Common claims include injuries incurred due to scuba diving, bungee jumping, and mountain climbing.

Rental car protection: If you want to drive a rental car, you might benefit from a rental car protector plan. While car rentals sell protection plans at the rental counter, you can also obtain more affordable protection plans from other providers.

Digital nomad coverage: Digital nomads who work remotely while traveling can benefit from digital nomad travel insurance. If you expect to take numerous trips a year or are working abroad for short periods, a travel insurance plan for digital nomads can offer helpful protection.

Key Factors to Consider When Comparing Plans

Coverage Needs

Travelers should evaluate what coverage is necessary based on the type of trip and personal circumstances. For example, if you plan on participating in extreme sports and hazardous activities (e.g. scuba diving in Hawaii), you might want an insurance policy that covers adventure sports. If you know your health insurance policy already covers medical expenses while abroad, you likely won’t need travel medical insurance.

Policy Limits

Travelers who plan on buying travel insurance should be aware of the maximum coverage amounts for each type of coverage they obtain. For example, a coverage limit on medical travel insurance of $150,000 would mean that after your insurance reimburses that much, you will need to cover the rest of the medical bill yourself.

Exclusions and Limitations

Make sure you’re aware of the exclusions and limitations listed in your travel insurance policy. Don’t assume that your travel insurance policy will cover any type of injury or loss during your trip. Here are some common travel insurance exclusions:

• Natural disasters that are expected before you buy insurance (e.g. a hurricane being named)
• Last minute itinerary changes
• Non-severe weather conditions, like regular rain
• Pre-existing medical conditions (e.g. asthma)

Pre-existing Conditions

Before purchasing a medical travel insurance policy, check how your plans handle pre-existing medical conditions. This may mean any medical condition that was diagnosed before you begin your trip will not have its treatments covered during your trip.

Different insurers may have different definitions of what is considered a pre-existing medical condition. Always review your insurance policy to see if any of your health conditions or risks are excluded under pre-existing conditions.

Claim Process

No traveler wants an insurance provider that has a complicated claims process that takes ages to complete. When comparing insurance plans, look at customer testimonials and expert reviews to assess the ease and efficiency of a travel insurance provider’s claim process.

Customer Reviews and Ratings

Make sure to check reviews and ratings of insurance providers before you commit to an insurance policy. This will let to know if there are any common, serious complaints that other travels have had.

Steps to Compare Travel Insurance Plans

Identify Your Coverage Needs

Before purchasing travel insurance, assess your coverage needs. Consider your type of trip, destination, activities planned, budget, and personal health. These factors will play essential roles in what type of travel insurance you need.

Research and Gather Information

As with all insurance policies, it is a good idea to use online comparison tools and visit top insurance provider websites. Good travel insurance providers to consider include:

• Favy: Provides fast and reliable coverage for domestic, international, and cruise trips.
• TravelInsurance.com: Easily compare quotes for travel insurance at the guaranteed lowest price.
• Generali Global Insurance: Offers a 24/7 emergency assistance hotline as well as a free look period where plans can be canceled for a full refund.

Compare Policy Features

Trip cancellation options: See what types of trip cancellation reasons are covered. Choose the type of trip cancellation coverage that makes the most sense to you.

Medical coverage: If you have pre-existing medical conditions like heart disease or asthma, make sure to choose a policy with coverage that aligns best with your needs.

Emergency evacuation: Are you traveling to a destination that may suffer from civil unrest or a political emergency in the near future? Emergency evacuation coverage can provide valuable reimbursements.

Baggage coverage: Review to see if your travel insurance policy offers enough coverage for any valuables inside your baggage.

Add-ons and extra features: Do you expect to practice extreme sports and activities while abroad? If so, consider choosing a travel insurance policy with the necessary add-ons for better financial protection.

Evaluate Policy Limits

When choosing travel insurance, make sure to compare the maximum coverage amounts. The overall policy maximum ranges from $10,000 all the way to $8 million, varying depending on your plan and insurance cost.

There may be separate dollar limits on different covered situations. For example, you might have a $100,000 maximum limit on emergency medical expenses, but trip interruption protection might only reimburse up to $5,000.

Check Exclusions and Conditions

Travel insurance policies typically come with a list of exclusions and conditions. Thoroughly review what is not covered by each plan so you have a good idea of what incidents and claims are not covered.

Understand the Claim Process

Each travel insurance provider has its own methods regarding processing insurance claims. When reviewing policy options, look at how claims are filed and processed, as well as the time frame for reimbursements. Some travel insurers have mobile apps that let you quickly file a claim in case of an incident while traveling.

Consider Cost Factors

Here are the cost factors that travelers should consider when comparing travel insurance plans.

Premium: Travel insurance costs an average of around $221. However, the actual premium you will need to pay can differ greatly, going as low as $11 or as high as $800 depending on your chosen policy. Travelers typically choose a suitable premium that falls within their travel budget.

Deductible: Your travel insurance policy may include a deductible. This is the dollar amount you need to pay out-of-pocket before your insurance kicks in. However, not all travel insurance policies come with deductibles.

Potential discounts: Some travel insurance providers provide discounts during certain seasons or time periods. If you want a more affordable policy, make sure to look for travel insurance as early as possible to find discounts.

Tips for Making the Final Decision

Before making the ultimate travel insurance decision, here are some key considerations to keep in mind and ask yourself.

• How much financial risk are you comfortable taking?
• Consult an insurance broker or travel agent for individualized, expert advice
• Buy insurance as early as possible for potential discounts and lower prices
• Did you double-check all of the coverage details?

Summary

Travel insurance comes in many forms. It can cover lost baggage, travel cancellations, injuries while abroad, emergency evacuation, and other expenses. Based on what type of coverage you choose, your insurance cost and coverage limits can vary greatly.

Travelers should assess their individual needs, risk tolerance, and budget. If you’re looking for travel insurance, check out our expertly reviewed best travel insurance companies.