Like most insurance policies, one usually never needs to use it. However, because if and when the need arises, the costs can be so great it’s worth considering. Illness, a family emergency, a missed flight, a canceled tour, lost baggage, or an airline strike, among other things, are all possibilities.
Here are the basic features of travel insurance: (1) trip cancellation, interruption, and delay; (2) medical; (3) emergency medical evacuation; (4) baggage delay or loss; (5) air flight accident and travel accident insurance.
You might take a look at Insuremytrip.com for a comparison of policies provided by different insurers.
(1) Trip Cancellation, Interruption & Delay: This kind of insurance covers the non-refundable financial penalties or losses you incur when you cancel a prepaid tour or flight because of a personal financial crisis, sickness, death in the family, accident, etc.; when you need to return home early because of a medical reason, family emergency, etc.; or when a tour is delayed for reasons outside of your control (e.g., an airline strike). Some insurers even sell a “cancel for any reason” add-on.
Before purchasing this type of insurance check with your credit card issuer. They may offer limited trip cancellation or interruption coverage for flights or tours purchased with their card.
(2) Medical: Before buying a special medical insurance policy for your trip, check with your medical insurer; you might already be covered by your existing health plan. Ask about benefit caps and deductibles, and have them walk you through the procedure of making a claim. Much of the additional coverage you buy is supplemental/secondary, so it covers whatever expenses your primary coverage does not. In making a claim with a travel insurance company your expenses will usually be out-of-pocket, and you’ll bring home documentation to be reimbursed later on. In some cases you may have to contact your insurer for approval before seeking medical help. Please note, while many USA insurers will cover you overseas, Medicare will not.
Travel medical insurance generally covers emergencies only. So when you talk to the insurance provider ask what happens after you are moved from the ER to a recovery room. The hospital will typically work directly with your insurer on billing, while a quick visit to a doctor will more likely be an out-of-pocket expense for which you’ll be reimbursed later on.
Pre-existing health conditions may be covered by medical and trip-cancellation coverage depending on when you buy the coverage and how recently you’ve been treated for the condition.
The U.S. Department of State periodically issues warnings about traveling to at-risk countries. CLICK HERE to visit the Dept. of State website. If you’re traveling to one of these countries, your cancellation and medical insurance will likely not be honored.
(3) Emergency Medical Evacuation: Evacuation insurance covers the cost of getting you to a place where you can receive appropriate medical treatment in the event of an emergency. This is usually not covered by your regular medical insurance plan back home. Sometimes this coverage can get you home after an accident, but more often, it’ll just get you as far as the nearest major hospital. Ask your insurer exactly what’s covered before and after you get to the hospital.
(4) Baggage Delay or Loss: Baggage insurance is included in most comprehensive policies. This kind of insurance puts a strict cap on reimbursement for such items as jewelry, eyewear, electronics, and photographic equipment. Also, if you check your baggage for a flight, it’s already covered by the airline. Check with your airline for its luggage liability limit; if you have particularly valuable luggage, you can buy supplemental “excess valuation” insurance directly from the airline. In addition, check if your homeowners’ or renters’ insurance covers baggage, perhaps with a “floater” supplement, if necessary, for international travel. It may be cheaper, and you’ll have coverage even after your trip. Travelers’ baggage insurance will cover the deductibles and items excluded from your homeowners’ policy.
(5) Air Flight Accident & Travel Accident: Air flight accident and travel accident policies are coverage for loss of life or limb when flying or traveling, respectively.