Why should I purchase a flight/travel Insurance?
Imagine you are enjoying your vacation in some exotic island and you have suddenly fallen ill and you are in need of an immediate hospital care. More than likely the insurance that you have at home would not cover you abroad. What do you do? This is where travel and flight insurance comes in.
The purpose of travel insurance is to protect oneself from unforeseen circumstances- situations might arise that may compel you to cancel your trip, seek accidental medical emergency treatment or return home early.
There are several benefits to having a travel insurance, the most important of them is safety and peace of mind. Most people do not purchase travel insurance and the few that do, purchase trip-cancellation insurance. Perhaps they are not familiar with the other coverages provided such as baggage, health insurances, and evacuation insurance.
According to the Today show, there are six relevant reasons to purchase travel insurance:
1) Flight/Trip cancellation- You may need to cancel your trip for any number of reasons: it could be due to an illness or an injury, family emergency, or missed your flight. Rick Steves suggests buying this insurance within a week of the day you purchased your trip because “policies purchased later than a designated cutoff date- generally 7 to 21 days, as determined by the insurance company- are less likely to cover tour company or air carrier bankruptcies, pre-existing medical conditions (yours or those of family members at home), or terrorist incidents. Mental-health concerns are generally not covered.”
Check with your credit card company before you purchase a trip cancellation insurance, you may be already covered.
2) Lost baggage- Your luggage got lost during transit. You have important items in bags that you need, such as medications. In situations like this, you would need to have baggage insurance as well as medical travel insurance for your medications.
3) Theft- Your personal items could get stolen if you leave them unattended in public places or not in a safety box in your hotel room.
4) Medical emergencies- If you get sick or injured overseas, you will need purchase an insurance program called Medical Evacuation and Repatriation program. This policy covers your treatment and your flight back to the U.S.
5) Emergency evacuation due to country instability/war- Most travel insurance policies have “force majeure” clauses. For instance, the policies will cover trip cancellation “if the U.S. State Department issues a travel warning. They will also only cover you for your trip if an act of terrorism occurs in the specific country you’re traveling to or from.” Before you make any international travel plans, read about the country that you are planning on visiting. For your own safety, make sure that the country is stable and visit the State Department website to check about any travel warnings.
6) Airline company goes bankrupt- Travel insurance programs do provide coverage for airline bankruptcy.
Most major commercial airlines like Delta and United sell their own flight/travel insurance to passengers. There are also many companies like MedJet Assist and Travel Guard that offer comprehensive packages that would cover “accidents, illness, missed flights, canceled tours, lost baggage, theft, terrorism, travel-company bankruptcies, and emergency evacuation.”
According to Rick Steves, “Insurance prices can vary dramatically, with most packages costing between 5 and 12 percent of the total trip. Age is one of the biggest factors affecting the price: Rates go up dramatically for every decade over 50, while coverage is generally inexpensive or even free for children 17 and under.”
What if I don’t want to buy a comprehensive travel insurance?
For some travelers certain types of insurance are more important than others. If you don’t want to purchase a comprehensive travel insurance, you would need to figure out what specific protection/coverage do you need in order to purchase the right type of insurance:
Medical travel insurance
Before you purchase a medical travel insurance for your trip, verify with your health plan insurer if you are covered or not. Most US insurers do cover you abroad, one exception is Medicare. According to Rick Steves, it is prudent to consider buying a special medical travel policy even if your medical insurance policy includes international coverage. You could use the special medical travel policy as a secondary or supplemental coverage. So it would cover whatever expenses that is left over from your health plan including deductibles. You could choose to buy primary coverage, which will cover your costs up to a certain limit. “In emergency situations involving costly procedures or overnight stays, the hospital will typically work directly with your travel-insurance carrier on billing (but not with your regular health insurance company; you’ll likely have to pay up front to the hospital or clinic, then get reimbursed by your stateside insurer later).” You will have to pay out-of-pocket for a regular visit to the doctor for non-emergency reasons. In order to get reimbursed for doctor visit, you will need to bring a medical documentation to send to your health plan insurer. “Whatever the circumstances, it’s smart to contact your insurer from the road to let them know that you’ve sought medical help.”
According to Frugal Traveler, there is also another reason for getting this coverage: If you are traveling abroad to a developing country, many hospital facilities will provide medical care without asking about coverage, but they will not let you go until you pay for their services. Travel insurance will help pay for your medical expenses, and “act as an advocate so that you [are] not overcharged because you [are] an American.”
Be aware that medical and evacuation insurance may not cover you if you are participating in activities that the insurance company would deem dangerous or high risk such as mountain climbing, scuba diving, and sky diving. You would need to buy an additional coverage if you would engage in those activities.
In addition to coverage for lost baggage, the policy also covers damaged, delayed or stolen baggages. This is especially helpful when flying internationally and checking bags. According to Rick Steves, some insurers have strict policies in providing coverage for expensive items.
Make sure that the baggage insurance also would cover expensive items like electronics and jewelry. In most cases, your items would be covered if you checked in your bag for your flight. Double check with the airlines, and ask about the luggage liability limit. If there are some valuable items that you would like to protect, you can purchase “excess valuation” insurance from the airlines. Ask your Insurance Agent whether your homeowner’s or renter’s insurance covers baggage.
The benefit of buying a non-refundable insurance is when you are unsure if you would stay for your entire trip or if you need to stay longer. According to Frugal Traveler, some insurance policies “offer straight coverage if you buy the non-refundable airline ticket and then can’t use it and don’t want to be hit with the minimum $100 change fee. This runs about $13 per $100 of coverage.” It may be expensive, but could be worth it if you are really not sure whether you need to change your trip after you purchased your ticket.
Adventure/extreme sports insurance
According to Today, “In most cases, there are exclusions on basic travel insurance when it comes to adventure travel. That means specifications on how high is the mountain you’re climbing, and how far are you scuba diving.” This insurance is suitable for those who are going to take part in activities that are considered “high risk” and would not be covered by your medical travel insurance. This insurance would provide you with an additional coverage, if you were to get injured. You could request for coverage for professional sporting events but for an extra fee.
Credit card insurance
There are many airline affiliated credit cards. Most of them provide numerous travel coverages. According to Rick Steves, regular credit cards do also provide certain travel protections when you purchase a ticket (with the credit card), but they are limited- rental car insurance, flight accident insurance, and limited baggage insurance. Make sure that you read the terms and conditions of your credit card. You could also call your credit card customer service line for additional guidance.
When should I not buy a travel insurance?
According to Today, the cost of your policy should not exceed the cost of your trip. For example, if you were to purchase a ticket for about $300 then it would not be necessary to buy insurance. If you bought your $300 ticket with a credit card, and if the airline ceases to operate, under the federal credit laws your trip is already covered by your own credit card company because “you bought or contracted for a service which you didn’t get.” It is always important to read the fine print of the policies because if your airline got delayed for any reason, and you wanted to cancel the whole trip, some policies would require for “more than half of your vacation has to be delayed before you can cancel and be covered.”
While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.