Here’s what you need to know about travel insurance in 2023
There’s nothing worse than having your travel plans ruined by something uncontrollable. It not only ruins the trip but also creates a financial burden that you wouldn’t want. This has made contingency planning more essential than before.
Travel insurance has grown more important for people looking to book future trips. Why? Because travel insurance offers coverage for unexpected events during a trip. Now that the hurricane season is upon us, it’s the best time to buy travel insurance and secure all future travel plans.
So, let’s go into what travel insurance is and what it provides.
What is travel insurance?
Travel insurance protects you against risks and financial losses while traveling. The losses can be minor, like delayed luggage, or significant, like a medical emergency or last-minute trip cancellation.
Each travel policy offers different benefits, so choosing a plan that fits your budget, your needs, and your travel plans is essential. Since travel insurance covers unforeseeable events, it’s best not to wait until a significant event occurs or is going to happen.
What does travel insurance cover?
Depending on the coverage you choose, travel insurance can cover a multitude of possible damages and losses.
Common types of travel insurance Accidental death insurance Travel isn’t without risks. The risk factor varies depending on what activities you plan. Activities such as mountain climbing are more likely to go awry. This policy covers you and your family should things go wrong during your trip. Baggage insurance Baggage insurance has two broad categories: baggage loss and baggage delay. If you retrieve your lost luggage but have missing items, baggage loss coverage will reimburse you for any lost possessions within a specific per-item limit. Your homeowners policy should cover any valuables that you have lost. Baggage delay insurance Baggage delay coverage will reimburse you for immediate necessities like a toothbrush, toiletries, change of clothes, etc., for each day you didn’t have your belongings. Medical insurance Travel medical or health insurance reimburses you for emergency medical expenses, including evacuations. If you break your arm on vacation, this coverage will protect you. However, you will not be covered if you decide on getting your teeth cleaned while abroad. Emergency evacuation insurance Medical evacuation is often included in travel insurance or sold alongside travel medical expense insurance. This type of insurance generally covers medical transportation, such as an ambulance ride or air evacuation services to the nearest medical facility. Some plans also cover the cost of a flight back home or book travel arrangements so you can return sooner. Rental car insurance If you decide to rent a car during your trip, you could be held responsible financially if you’re in an accident and don’t have your own car insurance.
You can buy additional insurance from the rental car company using your credit card or get a standalone policy through a third party. Trip cancellation insurance You can purchase trip cancellation coverage as part of a comprehensive travel policy or receive it for free when you hold certain premium credit cards. This benefit covers abrupt or unavoidable cancellations of prepaid, non-refundable reservations, including flights and hotel bookings. Cancel for any reason insurance (CFAR) CFAR is supplemental coverage for partial reimbursement when you cancel a non-refundable trip for any reason your travel insurance doesn’t cover. It is an optional upgrade to your primary travel policy. This plan is not eligible with every plan, and only a few insurers provide this service. Trip interruption insurance If you miss a portion of your trip due to any covered reasons, trip interruption benefits can reimburse you for any unused, prepaid, non-refundable travel expenses, such as hotel or excursion bookings. It may also reimburse you for booking a new flight home, additional hotel stays, or airport taxi fare.
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What travel insurance may not cover
While there are several reasons you should purchase travel insurance, there are things that it may not cover. If you have a preexisting medical condition, your policy may not cover any claims related to that condition. Some policies may cover preexisting conditions if certain conditions are met, such as purchasing the policy within a specified period and being medically fit to travel when you book your trip.
If you plan to participate in risky activities, like mountain climbing, your policy may not provide coverage if anything goes wrong. Your policy may exclude coverage against war, terrorism, self-inflicted injuries caused by alcohol, and drug-related incidents.
If you’d like to have the option to cancel your trip for any reason, you’ll need to purchase a Cancel for Any Reason (CFAR) add-on. On top of allowing you to cancel your trip, you can receive around 75% of your prepaid, non-refundable trip expenses back, depending on the policy.
Is travel insurance worth it?
Travel insurance can be worthwhile in two situations: to protect your trip and to protect your health.
If you’ve already paid for your trip and there are penalties for cancelation, it is a good decision to consider purchasing travel insurance. This insurance can cover your reservations if your trip is canceled or interrupted for a covered reason.
If weather-related problems, such as hurricanes, affect your travels, travel insurance can protect your non-cancelable reservations. Some policies even offer emergency evacuation in case of dangerous situations.
When traveling abroad, some U.S.-based health insurance policies tend to offer coverage anywhere within that country. But if you fall ill or injure yourself while traveling internationally, most policies may not cover you. Additionally, medical providers in your destination may not accept your insurance. Without travel insurance, you may end up paying for these expenses out of pocket and then seeking reimbursement from your healthcare provider.
If your credit card already provides some travel insurance protection, such as cancellation, trip interruption, and baggage delay, consider getting a separate travel medical insurance policy to cover medical emergencies that may occur on your trip.
Travel insurance for this active hurricane season
Meteorologists are forecasting an above-average hurricane season this year, meaning there is a higher chance of multiple hurricanes. Since there’s nothing you can do about natural events, this can greatly impact your travel plans. If you’re planning on traveling to a hurricane-prone state or going close to the sea, it’s ideal to have a good travel policy in place.
If you plan to travel between June and November, watch out for these two coverage options on your travel insurance.
Trip cancellation coverage
You will get full reimbursement for prepaid and non-refundable expenses, like flight tickets and hotel bookings, should your trip get canceled, or you cancel it for any covered reason. You will have to meet one of the following criteria to be eligible for a claim:
Your carrier airline is significantly delayed.
Your destination is under a hurricane warning.
Your destination is uninhabitable due to severe weather or evacuation orders.
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Trip interruption coverage
This coverage on your policy will cover prepaid, non-refundable deposits if you miss any part of your trip. If you have to cut your trip short due to a reason covered in your policy, it will also cover an emergency flight home.
Travel insurance only covers unexpected events, so don’t wait until a storm has been named. It will be too late to get insurance once the storm is named. So, buy travel insurance as quickly as possible and check for endorsements and changes you can make to build a policy that fits you best.
How much does travel insurance cost?
What you pay for travel insurance may vary a lot depending on a number of factors, such as the duration of your trip, the destination, the cost of your trip, the level of coverage you need, and your age and health status.
According to Forbes Advisor’s analysis, the average cost of travel insurance is 5% to 6% of your trip costs. For a $5,000 trip, the average travel insurance cost is $228, ranging from $154 for a basic plan to as high as $437 for a plan with extensive coverage.
How to use your travel insurance?
Travel insurance works like any other insurance policy. You purchase coverage to protect yourself from certain risks. If a covered event occurs, you can make a claim with your insurer to request payment or reimbursement for any financial losses incurred.
Travel insurance policies generally only cover prepaid or non-refundable reservations. If you can get a complete refund by canceling your reservations, you should do so directly with the company. Also, most travel insurance plans don’t cover reservations made with hotel points or airline miles.
You will be required to provide evidence of your loss when filing a claim. This could involve documenting the reason for the problem, such as a flight delay or cancelation, and providing receipts to support your claim. Since many potential types of losses could arise, the claims process can vary depending on the insurance company and the nature of your loss.
So, should you get travel insurance?
If you already have your next travel plans made, it’s best to get travel insurance. You can see that it’s a smart way to protect your trip against any unexpected events. It is important to note that coverage limits and benefits may vary depending on the insurance provider and budget.
Hence, it is recommended to evaluate all available options and choose the one that suits you best. We also recommend reviewing your travel policy to ensure you aren’t paying more than necessary and getting the best possible coverage.
If you require help finding the best insurance policies, quotes or the best insurance agents, Agency Height is here to help.
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Frequently Asked Questions
How can I get travel insurance?
There are three ways to get a travel insurance policy:
Purchasing a travel insurance policy: Many companies sell standalone travel insurance in varying lengths. It can cover an individual or an entire family. You can get basic coverage or opt for comprehensive coverage.
Add-on coverage when booking a trip: Some companies offer the option of getting insurance while booking a trip. They usually cover only a specific reservation, so it’s ideal to purchase it when going for financially large travels.
Access via travel card benefits: You can also get travel cover from travel cards. Many include protection that covers varying issues, such as issues with your flight, bags and other aspects of your trip.
Will my travel insurance cover my camera and equipment
You can purchase a camera insurance policy along with travel insurance if you’re worried about potential damage to your camera gear. A camera insurance policy will protect you during your trip and when you’re at home as well. But make sure to review your existing travel insurance policy before you purchase a camera insurance policy. Comprehensive travel coverage should cover most travel concerns, which can save you spending extra out of pocket.
Where can I get the best travel insurance?
Here’s our list of insurance companies that offer the best travel insurance in 2023:
Allianz Global Assistance: We recommend Allianz travel insurance for economical travelers looking to add on cheap rental car protection.
Travel Guard by AIG: AIG travel insurance is well-suited for travelers with preexisting medical conditions.
Seven Corners: You can get robust upgrade options and benefits on Seven Corners’ Roundtrip Choice plan.
World Nomads: World Nomads offers great plans for thrill seekers and covers 200+ adventurous activities.
AAA: AAA’s travel insurance is ideal for anyone looking for coverage, and you don’t have to be an AAA member to buy a policy.
