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What is Travel insurance and why do you need it?

  • Cars Explained
  • Xavier Sabastian
  • 5 minutes

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What is travel insurance?

Travel insurance is a sort of insurance that protects you against the expenditures and losses that come with traveling. It provides good protection for those traveling both domestically and internationally. When traveling without travel insurance, over half of all Americans have incurred surcharges or had to bear the cost of damages. Following the COVID-19 outbreak, many prospective travelers buy travel insurance for international and domestic travel.

Get a travel insurance

Why is travel insurance important?

Many ticketing and travel package providers offer customers the option of purchasing travel insurance, commonly known as traveler’s insurance. Some travel insurance policies cover personal property loss, rented equipment such as rental automobiles, or even the expense of paying a ransom.

Trip cancellation or interruption coverage, baggage and personal effects coverage, medical expenditure coverage, and accidental death or flight accident coverage are the four primary types of travel insurance. Coverage frequently includes 24-hour emergency services such as passport replacement, cash wire help, and rebooking canceled flights. Some travel insurance packages may duplicate existing coverage from other carriers. They might also give coverage for refundable costs in other ways.

Canceled or delayed trips coverage

Trip cancellation insurance, also known as trip interruption insurance or trip delay insurance, reimburses a traveler for non-refundable prepaid travel expenses. The permitted causes of cancellation and interruption and the amount of compensation provided differ between providers.  Illness, a death in a close family, unexpected business problems, and weather-related issues are among the most common acceptable causes.

Trip cancellation is advantageous when you pay more upfront than you are willing to lose. For instance, consider the following scenario. You buy a $2400  package tour. If the cancellation clause states that all but $100 is refundable upon cancellation, travel insurance will only cover the non-refundable $100. Also, there is no need to protect a refundable airline ticket.

travel insurance for international travel

Baggage and personal items coverage

Travel insurance covers the baggage and personal items that are lost, stolen, or destroyed during a journey. It may include coverage when traveling to and from a location. Most carriers, such as airlines, will reimburse passengers if their luggage is lost or destroyed due to their error. As a result, baggage and personal effects coverage add an extra degree of security. The possibility of lost, stolen, or damaged luggage and personal possessions is a common travel issue. Many travel insurance policies only pay for personal possessions after you have exhausted all other eligible claims. 

Your homeowners or renters insurance may provide coverage outside of your house, and airlines and cruise lines are responsible for baggage loss and damage while in transit. Also, whether used for deposits or other trip-related fees, credit cards may give automatic insurance for things like delays and baggage or rental car mishaps.

Medical coverage (short-term and major)

Short-term medical coverage and substantial medical coverage are the two main categories of medical travel insurance policies. Depending on the coverage, a short-term policy can cover a traveler for anywhere from five days to a year. Medical insurance can assist with medical bills, locating doctors and healthcare facilities, and acquiring foreign-language assistance. 

Coverage, like other insurance, will vary depending on pricing and provider. Some policies may cover airlift transportation to a medical institution, prolonged stays in foreign hospitals, and medical evacuation to receive care.

The United States government advises individuals to check with their medical insurance providers before traveling to see if their policy extends coverage outside of the country. Before acquiring a policy, it is critical to study the policy rules to see whether exclusions, such as preexisting medical conditions, apply and avoid assuming that the new coverage is identical to an existing plan.

Emergency medical coverage may be unnecessary. If you become ill or wounded while traveling, most health insurance companies will cover “customary and reasonable” hospital fees, but few cover a medical evacuation.

Death and flight accident coverage

An accidental death and flight accident coverage compensate surviving beneficiaries if an accident results in the traveler’s death, disability, serious injury, or a family member accompanying the traveler. Flight accident insurance covers accidents and fatalities that occur during flights on a certified commercial airplane. 

If you currently have a life insurance policy, accidental death coverage may not be necessary. The benefits provided by your travel insurance policy may be in addition to those provided by your life insurance policy. This leaves extra money to your beneficiaries.

purchase a travel insurance

How to purchase travel insurance

The cost, exclusions, and coverage of travel insurance will vary depending on the provider. Before purchasing insurance, the buyer should be aware of the importance of reading all disclosure documents. Per-trip coverage covers a single journey and is appropriate for customers who travel regularly. Multi-trip coverage protects multiple trips over a year, but none of the excursions can last more than 30 days. Way.com would recommend you opt for annual coverage.

Aside from the duration of the coverage, the type of coverage determines the premiums supplied, the age of the passenger, the destination, and the cost of your trip. Standard per-trip plans range in price from 4% to 10% of the trip’s expense.

travel insurance to save yourself

When traveling, it is also recommended that travelers register their travel arrangements with the State Department. Even if you haven’t acquired travel insurance previously in this post-COVID-19 world, you might want to think about it now. 

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