rick and andrea discuss choosing which travel insurance policy to buy
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How to choose travel insurance: 11 Things to Know

Have you ever wondered about travel Insurance? We will try to explain how to choose travel insurance, how they work, and the 11 things you need to know in a post-covid world.

Before we begin we want to tell you that we are not licensed insurance professionals and what we discuss in this video is for educational purposes only. Every time you choose to buy travel insurance you should always consult an insurance professional. Also, keep in mind that these are general rules, every insurance company is different and has a specific set of rules.

Did you know that before the Covid-19 pandemic only one in five Americans cost to buy travel insurance? If there is one lesson we learned from the pandemic is that it is important to have insurance coverage before any trip, especially if you are traveling abroad.  Let’s start discussing what is travel insurance and some important definitions:

What is travel insurance? 

Travel insurance is a travel package that covers the traveler and one or more components of the trip. Some policies only cover medical emergencies while traveling others cover many or all the components of the trip including objects such as luggage, camera, etc.

Most plans are individual and a separate insurance policy per person is required. Sometimes you can buy family plans that cover all the members of a family traveling together.

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Let’s see which ones are the components of Travel Insurance

Trip Cancellation

The trip cancellation component of the travel insurance refunds part of the whole amount of the trip in case one of the conditions in the policy happens. What does this mean? Generally, it means that in case one of the parties traveling or an immediate family member is sick the insurance company will refund part or the whole amount of the non-refundable fare. 

The key in this component is to know exactly what are the conditions that can trigger the refund and what is the amount refunded. For example, some insurance companies include illness of a close family member or business conflicts, or even adverse weather conditions.

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Some insurance companies let you purchase the “Cancel for any reason” add-on. In this case, the trip is refunded for any reason.

Also, remember that this only covers the nonrefundable part of your trip. Anything that can get refunded by the airline, hotel, car rental, cruise line, etc. is not included. Also, many insurances do no cover free flights, flights paid with points, or won in a contest! 

Generally, this component of the travel insurance must be bought before the final payment of ANY part of the trip is made. 

Trip Interruption

This component is very similar to the previous one. It means that if something happens while you are on your trip and you must interrupt it, you will get refunded the whole or a portion of the non-refundable fare.  Like trip cancellation, you need to know which are the conditions that can trigger the refund and what is the maximum amount refunded. 

Trip Delay

This component pays for any expenses incurred due to a delay in your transportation. For example, you miss a connection and you have to spend the night in a city, the insurance will pay for the hotel, food, taxis, etc. up to a certain amount.  Most of the time you will have to pay out of your pocket and submit all the receipts to the insurance for a refund.  

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Cruise lines offer a special kind of trip delayed insurance in case your flight is delayed and you miss embarkation. In this case, the cruise line will take you to the next port of call to board the ship. You might need to buy the flight component from the cruise line in order to qualify for this coverage. (If you want to know more about booking your flight with a cruise line check this article)

Baggage and personal effects

Consumers who choose to buy this type of travel insurance get their personal belongings covered in case they are lost, stolen, or delayed. Generally, the insurance company refunds you a set amount in case your personal belonging is stolen or lost and a lower amount in case they are delayed. 

In general, airlines will refund you in case the baggage is lost or damaged by their fault. This insurance just adds an extra layer of protection.  The insurance company might require some form of proof of the even (like a police report in case of stolen luggage).

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Travel Medical Insurance

Travel medical is probably the most important part of travel insurance people chose to buy. It covers the medical expenses (up to a certain amount) incurred by the insured during the trip. Also, travel medical often cover repatriation costs in case the traveler needs to be brought back home.

Most of the time you can choose to buy just this component of travel insurance. It can be short-term (less than one year) or long-term depending on the duration.  This is the most important component for this reason you have to be incredibly careful to know exactly what diseases are covered.  For example, check if it covers pre-existing conditions, the age, length of travel, and if there are any deductibles. 

Pre-existing conditions

A pre-existing condition is a condition that the traveler has before they purchase the insurance. Most insurance policies have different definitions of pre-existing conditions, and some don’t even cover pre-existing conditions, or they have a special premium for pre-existing conditions.

Many insurance companies have some medical questionnaires for the applicant to fill before being approved. In case you have a pre-existing condition it is imperative for you to consult with a licensed insurance professional before buying insurance. In fact, many companies DO NOT cover pre-existing conditions unless they are stable for at least 6 months.  It is very important to answer each question in the questionnaire with the most amount details in order to avoid problems in case of a claim. Travel medical insurance also has age restrictions. Travelers that are older of a certain age are not eligible for insurance. So be careful. 

Many travel insurances do not cover adventure sports such as bungee jumping, Kite surfing, etc. Be aware of this exclusion when choosing a travel insurance policy to buy. Also excluded from medical travel insurance are inquiries caused by alcohol or drug consumption.  Up to before 2020, you could choose to buy almost any travel insurance policy, only to find they didn’t cover pandemics. Fortunately, this changed and nowadays a pandemic event is included in most policies.

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Accidental death and flight accidents

Accidental death is a morbid part of insurance policies and covers all the costs incurred to repatriate a body. In this case, the beneficiary of the insurance will receive a lump sum from the insurance company.

Similarly, the beneficiary will receive a lump sum of money in case of a plane accident involving the traveller.

Even though this part of travel insurance is important, it is one component that we hope nobody will have to use.

After choosing the different components of Travel Insurance, let’s explore some important details that we need to know when it’s time to buy.

Validity duration of the insurance

Validity duration is another very important detail to consider. The insurance MUST be valid for the entire duration of the trip. Many online travel insurances only cover trips up to 21 days. If you are going away for longer you need a different option. 

It is also very important to know if every country on your trip is covered by the insurance. Sometimes it is necessary to buy extra insurance for a specific country. (For example, Europeans going to the US need to buy specific insurance for that).

How to use travel insurance

This part is incredibly important to know! When you think that you have a condition (illness, stolen baggage, etc) that might trigger an insurance claim it is imperative to call the number provided by the insurance company IMMEDIATELY and follow the instructions that you receive. Well, first contact the authorities, 911, or whomever.  But next, call the insurance company.  Do not skip this step otherwise, you might not be refunded by the insurance.  

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You see, some insurance companies only allow using specific hospitals while others cover any hospital (even private). This is another reason to call your insurance (if possible) before going to a hospital. 

Our experience with travel medical insurance

In fact, we had to experience this procedure ourselves. A couple of years ago we were about to board an Alaska Cruise when I had a gallbladder attack. Rick brought me to the Emergency room and immediately after he called the Insurance company.

The Agent on the phone advised him that in order to submit a claim, for the cruise to be refunded, we had to have a letter from the doctors saying “Patient CAN NOT TRAVEL TODAY”. After the call, we asked the doctor and he prepared the letter right away. We submitted it to the insurance company and 3 weeks later we got the full refund.

If Rick did not call the insurance company, it would have been a nightmare. We would have had to find the same doctor that treated me. And then, ask for the letter after the event happened.

When you choose to buy travel insurance you will receive a card with a worldwide number. Certainly, you will need to use it in case you need to file a claim.  And everyone I’ve seen always accepts collect calls. We strongly recommend you save this number on your phone right away so you won’t lose it.  Actually, I recommend keeping a copy of the policy in PDF format on your phone as well – you never know!

Credit card travel insurance

Many travel points credit cards and gold and platinum credit cards come with built-in travel insurance. In most cases, this is enough to cover someone during the trip. But you still need to know what is insured, how much, and for how long.

Don’t just assume that because your card has travel insurance you are set. If you see that the coverage is not enough or your trip is longer than what is covered you can call your credit card company and ask if it is possible to buy extensions or extra coverage. 

If you decide to use your credit card travel insurance also check the fine print. In fact, some credit cards require you to buy part of the whole trip using the card in order to be eligible for travel insurance.

Similar to credit cards, many health insurance plans cover medical expenses when traveling. These plans usually do not offer trip cancellation, trip interruptions, and baggage and personal effects insurance but just medical. If this option is sufficient for you contact your insurance provider to find out the details of the coverage while traveling. 

credit cards that offer travel insurance and some that consumers can choose to buy as an extra

On line travel insurance

Online travel insurance works well for younger and healthy travelers. Like People with no preexisting conditions or that are taking any medications. Online travel insurers can be a cheaper option. But, if you decide to buy this type of travel insurance make sure it’s from a reputable company. So if you decide on this option do your research. 

Annual plan versus per trip

If you travel abroad more than once or twice a year you should consider buying an annual plan that covers every trip you make, rather than a per trip insurance. Always do the math and see which plan is more beneficial for you.

The annual Travel Insurance plan, insurance lets you travel abroad for a set amount of time (15, 21, 30 days) at the time several times a year.

Final thoughts about choosing to buy travel insurance

We hope you enjoyed these few tips designed to help you choose and buy travel insurance. Even though it is a bit of a very dry topic it is very important to know about it before traveling! If you have any questions leave a comment below. 

See you next time!

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