What to Know Before Buying Travel Insurance

May 22, 2016

Don't let the extra money deter you from making the investment of travel insurance -- the peace of mind it buys is worth every penny. A dream of Belize for your birthday or experiencing the Australian Outback doesn't have to be derailed by events outside of your control.

Travel experts have found that many recent global events have affected how travelers view insurance. For many U.S. travelers, insurance used to be a "nice to have" but not an essential, however that attitude is changing. The U.S. Travel Insurance Association reported that insurance purchases are up by over 15% since 2012.

Looking to purchase a package for an upcoming trip? Some things to do before buying:

1. Read up on the several types of coverage

The five primary types offered are vacation cancellation/interruption, medical, evacuation, baggage and flight insurance. Consider your trip, yourself and other timely factors when determining what kind of and how much coverage is right for you.

Cancellation insurance: This is the most common kind of coverage found in every comprehensive policy. This covers unforeseen reasons like sickness of you or your traveling partner, weather or carrier issues, and legal obligations (like jury duty). The exact coverage varies from provider to provider. If you are pregnant and have unforeseen complications, a note will be required from your doctor.

Medical insurance: The first thing you need to ask yourself is if you need a plan that covers a pre-existing condition. If so, look for those types of plans. Most plans cover 24-hour emergency assistance, ambulance costs, hospital services and emergency dental work.

Evacuation insurance: Within medical plans, you can also buy evacuation insurance, which allows for emergency medical evacuation to the nearest appropriate care facility if you are somewhere remote or in a place that cannot appropriately treat a condition. This is most frequently purchased by people taking adventurous trips in more far-flung destinations.

Baggage insurance: This covers travelers in two instances: It will reimburse travelers for clothes, medication and other essential items if baggage is delayed in arriving at the destination. It also covers you if your possessions are lost, stolen or damaged during the trip.

Flight insurance: Both airlines and insurance companies offer this protection solely for difficulties with your flights. Often people purchase flight insurance only for international trips because of the higher cost of fares. This can help travelers save on the fees incurred in the event of a delay or cancellation because of bad weather, mechanical breakdowns or labor strikes.

2. Read the entire policy before purchasing

This is not a time you want any surprises. Note that most insurance is sold in packages, so it's important to comb through the inclusions in each to pick the package best tailored for you. For example, you may not need evacuation insurance in a destination like London or Shanghai because they are such huge cosmopolitan cities, but if you have many connecting flights to get to those destinations, you may want a package that includes baggage insurance. Think through the practicalities of each trip and make a list of what you think would most likely need to be covered.

For many Americans with medical insurance, their policies cover care abroad. Before pulling out your credit card, see what coverage you already have.

When the Zika virus first made headlines, many travelers learned the hard way that standard travel insurance policies often do not cover canceling a trip when a traveler is at heightened risk from an outbreak. If a member of your group is a child, a senior citizen or a woman who may be pregnant, do not purchase any insurance until you know what is and is not covered in the case of infectious diseases.

3. Compare prices online

Top sites that compile information and policies include InsureMyTrip.com, Travel Guard, TripInsuranceStore.com, QuoteWright.com and Squaremouth.com. It's not advised to purchase from smaller, no-name vendors. Allianz and AIG Travel Guard are well-known companies with years of experience covering vacations, and you can purchase from them directly.

On sites like InsureMyTrip, they ask for the destination, trip duration, travelers' ages, country of residence and the price of the travel components of the trip before they can give you quotes.

4. Talk!

Ask around to see if friends or family members have had a good experience with a specific provider. It never hurts to check out travel forums for other perspectives and recommendations as well. When online, look for people who have taken a similar type of trip -- but remember they likely have completely different circumstances than you.

5. Weigh the pros and cons of getting insurance through a tour provider

Many travel companies will offer discounts with packages booked, but that doesn't ensure that what is being provided is the right kind of insurance for you. It's not uncommon for some packagers to provide more coverage than you need or not enough. Oftentimes what travelers need is a combination of a few things, and it can be harder to customize that coverage this way.

6. Purchase your coverage as soon as possible after booking a trip

This is a good way to get discounts and extra coverage. Prices will go up the nearer you are to your trip, so the best way to lock in the lowest rates is immediately after booking.

7. Immediately create paper copies and digital versions of your documentation

From itineraries to coverage policies, it's wise to save versions of all your travel documents in a safe place online. This way they can be accessed and forwarded while away.
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