Karisa Garcia
Travel insurance is a safety net that can provide peace of mind when you're planning a trip. It can cover medical expenses, emergencies, trip interruptions, baggage, rental cars and more. The cost of travel insurance is usually between 4% and 10% of the overall price of your trip, and it's influenced by factors such as the length of your trip, your age, and any add-ons you choose. You can buy travel insurance through credit card companies or third-party providers, and you can compare policies on travel insurance websites. Before purchasing travel insurance, evaluate the financial risks you may face while travelling, check what coverage you already have, and carefully read the fine print of any policy you're considering.
| Characteristics | Values |
|---|---|
| Purpose | Cover the costs of medical treatment, loss or delays |
| Location | USA |
| Who is it for? | Brits travelling to America |
| Cost | Varies depending on the level of cover, activities, pre-existing conditions etc. |
| What does it cover? | Medical care, damage, loss and theft of luggage, holiday cancellation, flight cancellations and delays |
| What does it not cover? | Pre-existing medical conditions, injuries or accidents that occur while under the influence, injuries or accidents caused by winter or extreme sports, terrorism, natural disasters and civil unrest |
What You'll Learn
Travel insurance for medical emergencies
Travel medical insurance covers emergency medical expenses, such as hospital stays, doctor visits, prescription medications, and emergency medical evacuations due to unforeseen illnesses or accidental injuries while on your covered trip. It may also include 24/7 emergency assistance services like language interpretation and arranging medical appointments.
Who needs travel medical insurance?
If you have a domestic health insurance policy that will not cover you in other countries, travel medical insurance might be worth considering for your next trip.
You may also benefit from travel medical insurance if you:
- Have a pre-existing health condition and may need medical services or assistance abroad.
- Plan on participating in extreme or adventure sports such as bungee jumping, windsurfing, or scuba diving.
- Have a credit card that offers coverage for travel delays or trip interruptions.
- Are strictly concerned about covering potential health expenses abroad, not trip expenses.
According to USA Today, on average, travel medical insurance typically costs about 6% of the cost of the trip. However, age is also a factor in determining travel medical insurance costs. Travellers above age 60 might pay between 11% and 18% for a senior travel medical insurance policy.
If you encounter a medical emergency while travelling, contact your travel insurance provider about how to proceed. You will likely need to pay for your medical expenses using your credit card and subsequently file a claim for reimbursement with the insurer.
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Travel insurance for trip cancellations
Travel insurance is an important purchase when booking a trip, as it can protect you financially if you're unable to travel or need to end your trip early. Holiday cancellation insurance is usually included as standard with travel insurance policies and can reimburse you for expenses such as accommodation, unused flights, car hire, and excursions that you've already paid for.
The amount of cover you'll receive depends on the policy and the reason for cancellation. Most policies will cover you if you or a close family member becomes ill, if there's an injury or illness that prevents you from travelling, a fire or flood at your home, or if you're summoned for jury service. Some policies will also cover you if your destination becomes unsafe, or if you or your travelling companion becomes pregnant and are advised not to travel.
It's important to note that cancellation cover is not the same as changing your mind about a trip. You also won't be covered if you cancel due to a pre-existing medical condition that you didn't declare.
When purchasing travel insurance, it's a good idea to buy it on the same day you book your holiday so that you have cancellation cover in place. Check that the cancellation cover is enough to cover the cost of your trip, and consider buying a separate policy if it's not.
Additionally, the price of trip cancellation insurance can vary based on factors such as the traveller's age, destination, length of trip, and cost of the trip. It typically ranges from 2.3% to 9.4% of the total trip cost.
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Travel insurance for lost luggage
Travel insurance can be a real help when it comes to lost luggage. It can provide monetary assistance and peace of mind when things go wrong. There are two types of baggage coverage: loss and delay.
Baggage Loss Insurance
This covers baggage that is lost, damaged, or stolen during your trip. However, not everything in your bags might be covered. Certain items may be excluded, such as electronics, watches, jewellery, and other high-end items. It's important to check the terms of your policy carefully. The best travel insurance plans provide $2500 or more for baggage loss. If your suitcase only contains clothes, this is likely much more coverage than you'll need.
Baggage Delay Insurance
If your luggage is delayed, this type of insurance can reimburse you for expenses you incur while waiting for it to arrive. For example, if you need to buy toiletries, a change of clothes, or other necessities, you can claim this money back under baggage delay coverage. The typical daily allowance for baggage delay reimbursement is around $200 per person per day.
Making a Claim
Documentation is very important when making an insurance claim. Keep all your receipts for anything you buy while waiting for your luggage, as you will need to submit them with your claim. If your bags are stolen, file a report with the local authorities. If your bags are lost, be sure to get a report from the airline or other transport provider.
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Travel insurance for rental cars
When renting a car, it is important to consider whether you need rental car insurance. This is a specialised type of travel insurance that can be purchased as an add-on to many travel insurance policies. It is also offered when you rent a car.
Types of Rental Car Insurance
Collision/Loss Damage Waiver
This covers the cost of repairs in the event of an accident. Rental car companies can charge for towing, loss of use, diminished value, and administrative fees, so this insurance can save you money.
Supplemental Liability Protection
If you cause an accident, liability insurance covers the damage to another person or their property.
Personal Effects Coverage
This covers items stolen from your rental car, such as a laptop or clothing. You may already have this coverage under your renter's insurance.
Personal Accident Insurance
This covers medical bills for you and your passengers, as well as ambulance costs and death benefits. You may already be covered by your health, life, or auto insurance.
When You Need Rental Car Insurance
Business Travel
Your personal auto policy will not cover you if you are travelling for business, so you will need rental car insurance.
Higher-Value Vehicles
If you are renting a vehicle of higher value than the car you usually drive, your auto policy may not provide enough insurance. In this case, you may need additional insurance.
Keeping Premiums Down
If you are worried about your premiums increasing due to a rental car accident, it is a good idea to take out rental insurance.
What to Look Out For
Rental Contracts
Some rental car companies will ask for damages above policy limits, so be sure to read the contract carefully.
Credit Card Insurance
If you are using your credit card's rental car insurance, make sure you pay with that card. Also, don't sign up for supplemental rental car insurance, as this may negate your credit card's coverage. Check your card's terms, as insurance may not apply to luxury vehicles, RVs, motorcycles, or trucks, or when travelling in certain countries.
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Travel insurance for cruises
Even if you have health insurance, it may not cover you while you're on a cruise, especially if you're travelling internationally. Travel insurance for cruises can protect you in the event of unexpected medical emergencies, evacuation, trip cancellation or interruption, and lost luggage, among other things.
Cruise travel insurance typically covers:
- Emergency medical treatment and evacuation
- Trip cancellation and interruption
- Missed connections
- Lost, stolen, or delayed luggage
- Pre-paid shore excursions
- Financial default of the cruise operator
- Bad weather, including hurricanes
- Identity theft
It's best to purchase travel insurance for your cruise as early as possible, ideally right after booking your trip. This will ensure you get the maximum trip cancellation coverage and give you access to time-sensitive benefits like pre-existing condition waivers.
Where Can You Buy Cruise Travel Insurance?
You can buy cruise travel insurance from third-party insurance providers, your cruise line, a travel agent, or a travel insurance agent or company. Keep in mind that cruise lines and booking sites may offer limited coverage, so it's worth comparing policies to ensure you get the protection you need.
The cost of cruise travel insurance will depend on factors such as your age, the length of your trip, and the policy you choose. On average, you can expect to pay around 4-10% of your total trip cost for travel insurance.
When choosing a cruise travel insurance policy, consider the following:
- Whether it covers both onshore and offshore activities
- If there are any age limits or restrictions
- The medical coverage, including for pre-existing conditions
- Protection against lost or stolen possessions
- Protection against trip cancellation or interruption due to unforeseen circumstances
- Benefits like evacuation, repatriation, and missed ports
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Frequently asked questions
The cost of travel insurance is affected by the length and cost of the trip, the cost of local healthcare, the traveller's age, the amount and breadth of coverage, and any optional add-ons.
Travel insurance can cover unforeseen events such as illness in the family, the loss of a job, natural disasters, strikes at transportation companies, terrorist attacks in your destination, and travel provider bankruptcy. It can also be useful if your health insurance does not cover you abroad.
If your hotel room has a good cancellation policy, your airfare is flexible, your trip is already covered by your credit card, and you haven't booked any non-refundable activities, you may not need travel insurance.
