Travel Insurance - How To Determine If You Actually Need It

The trip that you are about to embark on is unique to you, so why should your travel insurance be any different?  Within this article I'm going to help you decide if you need insurance, and if you do, help you decide on an insurance thats right for you.  

If you do not have existing medical coverage that will follow you to your travel destination, you are going to want robust travel insurance that covers trip related benefits and medical assistance for you and your family. The following factors will help determine if you need travel insurance and which insurance is best for you:
    • Where You Are Going and Where You Are From
    • What Insurance Coverage You Already Have
    • How Long Your Trip Will Be
    • What A Comprehensive Travel Insurance Typically Covers
    • What Additional Coverage Is Needed
    • Exclusions and Limitations

    By it's very nature, traveling means that you should expect the unexpected and investing in travel insurance is a perfect way to hedge against the innate risks of travel. At the end of this article we will also go over when you should buy travel insurance, what travel insurance costs and the best travel insurance provider - lets get started!

     person holding travel pin

    Where You Are Going and Where You Are From?

    Your final destination and country of origin matters when choosing travel insurance because these factors can impact coverage.

    For instance, as I am writing this, we are still in the midst of a pandemic known as COVID -19.  As the World Health Organization (WHO) has declared COVID-19 a pandemic, it is now classified as a foreseen or known event - which means certain coverages may not apply.

    If your next travel destination has a travel ban on it or if you go against your government's travel advisories, you may not be covered for any events which may arise while you are traveling.

    Action Items before you go:
    1. Check if your destination has a travel ban placed by your government
    2. Check the travel advisories from your home country to see if the threat level in your destination
    3. Use these resources or find ones like this for country of residence:
    insurance coverage puzzle pieces

    What Insurance Coverage Do You Already Have?

    Check your current medical insurance and see if you have any coverage overseas or wherever it is you may be going.  If your medical insurance wont cover you at your final destination this is the moment when you can decide that you officially need insurance. 

    While Travel Insurance includes coverage for trip cancellations, delays, loss of baggage, etc, Medical Insurance will cover things like doctors visits, prescriptions, emergency evacuations etc. Know the difference so you know what gaps of coverage you will need to fill. 

     
    Additionally, you can check with your credit card company to see if you automatically have some type of built in travel insurance benefits included while you use preferred cards as some companies provide perks like this for travelers!

    travel calendar

    How Long Will Your Trip Will Be?

    In general, insurance companies will allow you to purchase insurance, per trip, per month or annually.  The duration of your trip matters because you most likely wont be able to go over 365 days per plan unless you wish to be covered under a long term medical plan. 

    If you need long term coverage for extended traveling or working abroad, consider investing in a global medical coverage that is built for nomadic lifestyles. There are many providers such as Geo Blue, Cigna and Allianz.  I am currently in the market for a long term plan as my travels just extended so I will be following up with another post comparing the different providers so stay tuned!

    woman holding umbrella protecting against travel dangers

    What Does A Travel Insurance Plan Typically Cover?

    When purchasing comprehensive travel insurance you can expect assistance with medical emergencies, evacuation, trip cancellation, interruption and loss or delay of baggage.

    Insurance will typically pay for medical emergencies and evacuation if:

    • A physician certifies that the evacuation is necessary
    • A local hospital confirms that you need to be transported back to your home country 
    • A natural disaster occurs
    • Political situation arises

    You are typically eligible to be reimbursed for trip cancellation and interruption due to unforeseen events such as:

    • Sickness
    • Death of a family member
    • Military reassignment
    • Natural disaster at your destination
    • Terrorism

     

     

    Insurance provider may offer protection of baggage and personal effects when:

    • The airline fails to retrieve luggage
    • Local authorities fail to locate your luggage
    • If your lost or damage items do not fall under your plan's exclusions

     

     

      In the event of evacuation due to a medical emergency, ensure that coverage extends past your return date as you will need extended coverage during recovery

      Know your maximum benefit as they will only pay up to this amount, partially or provide a voucher for your next trip

       

      You will most likely have to prove that you exhausted all resources first before claiming your benefits

       


      blue question mark on yellow background

      What Additional Coverage Is Needed?

      Now that you know what kind of coverage you already have, how long you need coverage for and what coverage is common, it is now time to decide on additional benefits you may need.

      If you don't need a full comprehensive plan see what other benefits insurance companies offer that may be applicable to your situation. Here are a few examples below:

        Benefits and Add-Ons To Inquire About

        Coming Home Early & Resuming Your Trip

        • Some travel insurance ends the minute you get home. However, some coverage allows you to continue your trip at a later date and the travel insurance remains intact until then.
        CFAR - Cancel For Any Reason
        • It has to be booked in a certain window (usually up to 21 days) after booking the trip.
        • The entire cost (100%) of your trip has to be insured.
        • You will only ever get 50-75% of your trip costs back.

        Travel Insurance Add-Ons

        • Vision
        • Detal
        • Car Rental
        • Maternity

             

             

           

          magnifying glass read the fine print

          Exclusions and Limitations

          Exclusions means that your travel insurance simply doesn't cover it whereas limitations means that you will be covered up to an extent. 

          Know the exclusion and limitations of the insurance you choose so you can stay away from risky behavior that your plan doesn't cover.

          Common Limitations and Exclusions
          Loss Of Or Caused By The Following:  An Example of Why Fine Print Matters
          • Pre-existing conditions
          • War
          • Participation in Extreme sports or Professional Sports
          • Childbirth
          • Traveling against the recommendation of your physician
          • Theft of luggage while unattended
          • Traveling to undergo medical treatment
          • Personal effects with a motor i.e. boats, cars, motorcycles
          • Medical luggage i.e. glasses, hearing aids, medications 
          Imagine you purchased travel insurance just to protect your professional electronic business equipment.  Unfortunately, your equipment is stolen, you then go to make a claim and realized that these items are not covered by your insurance to be replaced or reimbursed.  If you read the exclusions and limitations prior to purchasing you would have realized that the item you really wanted to protect isn't protected under your plan. Be conscious of your coverage and always read the fine print!
          when you should buy travel insurance

          When Should You Buy Travel Insurance?

          If you’re going to see your beloved Auntie who lives a quick 45-minute flight away, perhaps skip the insurance and just buy plane tickets that can be changed at any time without fees.

          If you want to travel for an extended time, going to a trusted and transparent insurer for year-long comprehensive coverage seems the most sensible route. That should be done as soon as you can after booking the trip.

          Additional Notes:
          • If you’re going for the Cancel For Any Reason (CFAR) type cover, you have a small window to book it and cancel by
          • Without travel insurance, the airline is still liable for missed flights and lost baggage. So you are technically covered without cover on this one aspect.

          insurance savings jar

          How Much Does Travel Insurance Usually Cost?

          As a general rule of thumb, you should expect to pay anywhere from 4-10% of your total trip cost – that’s the total pre-paid and non-refundable cost of your trip. So, let’s say you have spent $3,000 on flights, hotels, and a cruise, the policies offered to you will likely be priced from about $150 - $300. If however, you decide to add Cancel For Any Reason coverage it can add 40-60% of the policy price again.

          If you’re crossing international waters, of course, these prices just go up and if you are over 40 you can expect the price to go up again.

          Who Is The Best Travel Insurance Company?

          For trips under 365 days, my personal recommendation for a brilliant insurer, who is completely transparent and clear about what they offer is the World Nomads.

          Founded by an ex-nomad, they truly understand what travelers need and have cultivated a reputation for being reliable and processing claims lightning fast. They can also help you solve problems via social media which is, need I say, amazing! And last but not least, they provide a lot of coverage at very fair prices.

          Lonely Planet and National Geographic have endorsed World Nomads, which proves that they are a brand highly worth considering in your search for travel insurance.

          I also love them because they put an emphasis on adventure and showcase all of the activities that their plans cover. For the proper adventurer this takes all the questions away of which activities are covered and which are not!

          Key Insurance Phrases To Know

          Deductible - What you will pay out of pocket before the health insurance takes effect

          Co-pay - What you will pay per visit to a doctor or for a prescription.  Its a set amount that you can expect to pay each time.

          Premium - Calculated bases upon your age, deductible and the coverage you want or need.

          Final Words Before You Depart

          Before you set off on your big adventure, be sure you do the following so you are prepared should you need help during your journey.

          1. Know how to report a claim if you need to
          2. Know your plans deadlines on when to file claims
          3. Have your insurance plan documents accessible for reference
          4. Save your Insurance's 24/7 number on your phone

          I hope you now have a better understanding of what type of coverage is needed for your trip.  Thank you for taking the time to read through this article and safe travels ahead! 

          **Please note that nothing within this article is a paid endorsement, it is my personal opinion and I have done my best to compile what I know thus far on travel insurance due to experience and my own personal purchases. I encourage your own research as every traveler and trip is unique and I am not liable for the use of any information listed here as I am not an insurance provider so please use at your own discretion**