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Do you need to know how to buy travel insurance for your next trip? We can help!
Whether it’s a budget trip to one of the world’s cheapest travel destinations or an indulgent week of sightseeing in Paris, nothing beats the excitement of traveling. Your flights are booked, you’ve scored ideal accommodations, and now you can dive into planning your itinerary. The right travel insurance policy can protect you and your plans both before and during your trip.
Once you start researching travel insurance companies, however, you’ll find all sorts of confusing terms and a myriad of price points. It can be overwhelming, especially if you aren’t sure what you’re looking for. That’s why we’re here.
In this piece, we’ll explain the main types of coverage offered by travel insurance companies and why you might need them. Before we get started, though, here are a few questions you should ask yourself:
- How much can I afford to spend on travel insurance?
- Do I need coverage for unexpected medical expenses?
- What if I have to cancel my trip?
- Do I want coverage for trip and baggage delays?
- How many trips will I take this year?
- Who will I be traveling with?
These questions can help define your needs and make it easier to find a travel insurance policy that meets them.
What Is Travel Insurance?
Simply put, travel insurance provides protection from certain types of financial loss that might occur before or during travel. These losses are typically related to medical expenses or unexpected changes to your plans, and they can get expensive quickly. By paying a premium up front, you can purchase a travel insurance policy that covers these costs should they arise.
How to Buy Travel Insurance: Start with a Budget
First things first: What can you afford?
When planning a travel budget, most people consider the biggies — airfare, accommodations, and experiences. Travel insurance deserves a seat at the table, too. Be clear about what you can afford to spend, and shop policies with that figure in mind.
Factors That Influence Travel Insurance Costs
Travel insurance pricing varies, but these main factors influence what you’ll pay.
- Type of Policy — Travel medical plans usually cost less than more comprehensive plans that include trip cancellation (more about that below). Adding extras, like cancel for any reason or adventure sport coverage, will usually increase the price.
- Length of Trip — As you might expect, longer trips cost more. The longer you’re away, the more likely you are to make a claim.
- Age — Coverage for older adults is more expensive, since they are more likely to have a health event that requires medical attention or disrupts their travel plans.
- Coverage Level — The higher the amount of coverage, typically, the higher the price tag.
- Deductible — A deductible is what you pay out of pocket before your coverage kicks in. Not all plans have deductibles, but when they do, lower deductibles usually mean higher premiums.
- Destination — Medical coverage in an area with high healthcare costs might cost more.
>>MORE: Is Travel Insurance Worth It?
Types of Travel Insurance to Consider
Now that you have a budget in mind, you need to understand what types of coverage are available and how they might benefit you.
There are two main categories of travel insurance — travel medical insurance and trip insurance. Under each of these, there are specific types of coverage.
Travel Medical Insurance
Travel medical insurance covers access to emergency medical treatment for illness, injury, and other health-related expenses. The exact coverage varies by provider and policy, but coverage might include:
Emergency medical expenses — This includes costs directly associated with accessing emergency medical care, such as doctor visits and hospital admissions.
Emergency dental — This is coverage for treatment of emergency dental issues.
Prescription drugs — This covers the cost of medications required to treat your illness or injury.
Emergency transportation and evacuation — Ambulance rides and other methods of transport to an appropriate healthcare facility may be covered.
Emergency repatriation — Coverage here includes transport back to your home county to receive medical care.
Repatriation of remains — This includes transport of your remains to your home country in the event of your death.
Accidental death and dismemberment — This is a benefit paid in the event of specific injuries or death.
Do You Need Travel Medical Insurance?
If you’re traveling outside your home country, then you most likely need travel medical insurance. If you don’t buy anything else, this is the one benefit you won’t want to skip.
It depends where you’re traveling, but non-resident healthcare costs in some countries can be staggering. Without medical insurance, seeking treatment for a serious illness or injury could mean risking financial ruin. I’m not exaggerating.
Being transported home to get the immediate medical care you need could also cost a small fortune. Although no one likes to think about this, if you were to die abroad without repatriation coverage, your family would also be on the financial hook for shipping your remains home.
Besides the financial risk of skipping travel medical insurance, you don’t want to be cavalier with your health. Delaying medical treatment that you need immediately could be a recipe for disaster. In our opinion, it just isn’t worth it. Purchase an affordable travel medical insurance policy instead.
Caution: Coverage for Seniors and Preexisting Medical Conditions
If you’re young and healthy, buying a travel medical insurance policy is pretty straight forward. Select the coverage you’re comfortable with and charge ahead.
Seniors and those with preexisting medical conditions, however, need to read the fine print. Some policies and providers offer flexible options for seniors, but some won’t insure you after you reach a certain age. Others limit you to low levels of coverage or charge exorbitant fees.
Coverage for preexisting medical conditions varies widely, so it’s important to understand what you’re buying. Many policies won’t cover medical expenses related to preexisting conditions. The important question to ask is, what is considered a preexisting condition?
Most providers consider a condition to be preexisting if you sought treatment for symptoms during a specific period of time directly before you bought your policy. That period of time is called the “look back” period. A look back period could include just a few months, or it may include a couple of years. Generally speaking, the shorter the look back period, the better for you as a consumer.
If you have a preexisting medical condition that has been stable for a few months but not a few years, shop for a policy with a short look back period to ensure you have coverage while traveling.
Shopping for a provider that offers flexible coverage for seniors and preexisting medical conditions? Check out our RoamRight Travel Insurance review.
Trip insurance (also called trip protection) protects the financial investment you make in your trip. It may include:
Trip cancellation — This includes reimbursement for all or part of your non-refundable trip deposits when you cancel for a covered reason. Covered reasons may include death, illness or injury, severe weather, or financial default of a travel provider. A special type of trip cancellation coverage, called cancel for any reason, is sometimes available at an extra premium.
Trip interruption — This includes reimbursement for all or part of your non-refundable trip costs when you have to return home unexpectedly before your scheduled return date. Trip interruption may also cover costs associated with returning home early.
Trip/travel delay — This coverage pays a benefit when your trip is delayed for a certain amount of time. It may cover inconveniences like buying dinner while you’re waiting an extra six hours at the airport or getting stuck in a layover city overnight.
Baggage loss/delay — This is a benefit paid when your baggage is lost or delayed for a certain period of time.
Do You Need Trip Insurance?
Beyond travel medical insurance, your next big decision is whether you need trip cancelation. If you’re taking an expensive trip with large non-refundable deposits, you should strongly consider it. After all, you could be out a lot of money if you or one of your traveling companions has to cancel for a covered reason.
That said, if your airfare and hotels are refundable, maybe you’re okay without cancelation. It’s the most expensive travel insurance benefit, so consider the cost when weighing your decision. If your trip costs are low and the premium is high, it might make more sense to take your chances.
You might think you don’t need seemingly minor benefits like trip and baggage delay, but stop and think: what’s the most common travel annoyance? Delays! Being stuck in a layover airport overnight while you wait for your delayed flight is a lot less irritating when you don’t have to pay for your hotel and food out of pocket. Just saying.
>>HOT TIP: The best travel reward credit cards often include solid trip protection, including trip cancelation, so check your card’s benefits before buying a policy.
There are a couple of extras you’ll find on many policies that don’t really fall under travel medical or trip insurance.
Rental Car Insurance — Typically covers the cost of damage to a rental car caused by collision, natural disaster, or straight up theft. It usually doesn’t include liability, which applies when you cause an accident that leads to damage or injury.
24-hour Assistance — It goes by different names, but this benefit provides around the clock assistance for miscellaneous needs. That could mean concierge services, replacing a passport abroad, or making new travel arrangements. It could also mean securing medical care or legal services. Hopefully you never need that kind of assistance, but it’s good to know it’s available around the clock.
Other Factors to Consider When Buying Travel Insurance
How Much Coverage Do I Need?
In addition to the types of travel insurance, you also need to consider how much coverage you need in each category. For trip protection, it’s pretty easy – add up the value of your non-refundable deposits and make sure you’re covered for at least that much.
For travel medical insurance, it’s tricky because it depends on your health concerns and the cost of healthcare in your destination. My rule of thumb is at least $100,000 for both emergency medical and repatriation, but consider your destination. The further you are from home, the more repatriation might cost.
Single Trip Vs. Multi-Trip Coverage
Another factor to consider when buying travel insurance is how many trips you’ll take this year. With a single trip policy, you buy coverage for your exact travel dates for a set price. But frequent travelers might get better value from a multi-trip policy that covers all trips of a certain duration taken in a 12-month period.
Are You Traveling with Kids?
If you’re traveling with kids, it pays to shop for a policy that targets families. For example, some policies cover children under 18 for free when traveling with an adult. If you have a couple of kids, that amounts to serious savings!
>>HOT TIP: Our Travelex Insurance Review has the details on a great family-friendly policy.
Do You Already Have Travel Insurance?
Many travel rewards credit cards include some basic travel insurance coverage for their cardmembers. Some employee benefits packages may include travel coverage as well.
With that said, people generally make two common mistakes when it comes to existing coverage: They either forget they have it or they overestimate its value. The first mistake can lead to wasting money on coverage you already have, while the second can open you up to major risk.
If you hold a credit card with travel insurance benefits or have a sweet employee benefit package, make sure you check the details before assuming you’re good to go. In most cases, credit card travel benefits only protect trip costs you charge to your credit card. So if you didn’t book your trip using your card, you’re probably not covered. Second, they may not include enough coverage — especially when it comes to emergency medical .
For example, the Chase Sapphire Reserve Card offers an impressive suite of travel benefits, but only $2,500 in emergency medical coverage. That just isn’t enough for most people. That said, Chase Sapphire Reserve cardmembers might be happy with the included trip protection and opt to purchase a separate travel medical policy to increase their coverage. This is far less expensive than buying a policy that also includes trip insurance.
Where to Buy Travel Insurance
When shopping for and purchasing travel insurance, you have a few options. You can work with a travel insurance broker, your travel agent can hook you up, or you can DIY it.
If you’re already using a travel agent to book your travel, this is the easiest option because there’s no extra work involved for you. Be aware, though, that you might not get the best price this way, and your options might be limited.
A good insurance broker can work with you to find you a plan that meets your needs and your budget. Of course, that means finding a broker, and having a meeting, either virtually or in person. Some brokers charge their clients a fee, while are others only collect commission from the providers they partner with.
If you’re taking the DIY route, there are sites that act as online brokers, collecting your personal and travel info and showing you the providers and plans that meet your needs. These price comparison sites are quick and easy to use, and won’t cost you any extra money.
We hope this guide to buying travel insurance has been helpful. Thanks for reading and happy travels!