Travel Insurance: What to consider

You bought plane tickets. You made hotel reservations. You’ve started packing for your trip. You’re all set, right? You certainly don’t need to waste any more money on something like travel insurance?

 

Think again.

 

I know, I know, mention “insurance” and your eyes glaze over. But the decision to purchase insurance — and the mundane details of your policy — could save you literally hundreds of thousands of dollars. Interested yet?

 

In this post, I’ll walk you through why you should consider purchasing travel insurance, what to look for in a policy, and what to do if you need to file a claim.

 

What travel insurance can do for you

 

This is what a ferry full of hot, exasperated travelers looks like
Trapped on a way-overcrowded ferry because bad weather wrecked havoc on the schedule

 

There are two main things travel insurance can help you with: disruptions to your trip and medical costs.

 

Disruptions to your trip

 

Have you ever found yourself in these situations when traveling?

  • Your flight/train/bus is delayed or cancelled
  • A delay on one flight/train/bus snowballs into missing several other connections
  • Missed connections cause you to miss hotel reservations or tour departures within the lose-your-full-deposit cancellation window
  • In order to minimize the damage from a disruption, you’re forced to buy expensive last-minute tickets

 

Disruptions to travel plans suck for any number of reasons. But if you have travel insurance, at least they won’t cost you extra money.

 

If you buy your plane/train/bus tickets with a credit card, there’s a good chance your card actually provides some basic protection for your trip. Most bank cards/debit cards don’t offer it.

 

It’s generally more difficult to get your claim covered by your credit card company than it is with specific travel insurance. But this type of protection is great for short trips where your home health insurance covers you — and it doesn’t cost you anything extra. All you have to do is book your travel on the card that’s protected.

 

Example: On my way home from New Orleans with a friend, our flight got delayed three hours. My friend had bought bus tickets to head to New York from the airport. The delay in NoLa caused him to miss the bus. He had to buy new tickets. The card he booked the original bus tickets on didn’t have travel insurance, so he had to eat the cost.

 

Medical costs

 

Say you’re hiking up a volcano in Nicaragua. It’s muddy, steep, and slippery. You fall and break your ankle. You’re as far from the island’s ferry dock as you can be, and you need to get immediate medical attention in Costa Rica — the nearest major hospital. That’s a couple hundred dollars in taxi fare alone, plus medical costs.

 

That’s the best-case scenario. Now imagine you get more seriously injured and have to be evacuated from the country in a fully equipped helicopter.

 

We’re talking over $100,000 worth of medical expenses, folks.

 

Unless your bank account can absorb that cost, the $100 for travel insurance is totally worth it.

 

If you’re American, also keep in mind astronomical medical costs at home if you are evacuated — or when you get home after a long trip. Many travel insurers offer policies that fill in gaps if you don’t have U.S. health insurance.

 

Ultimately, whether or not to purchase travel insurance is a personal decision. But if you choose not to, at least have a plan for how to pay for serious medical costs on the road. Remember: no one ever thinks it’ll happen to them until it does.

 

What to look for in a policy

 

Low-risk adventures like paddleboarding are covered in most policies
Low-risk adventures like paddleboarding are covered in most policies

 

So you’ve decided to get travel insurance for your trip. How do you know what policy is right for you?

 

Most travel insurers cover the basics: trip delays, lost baggage, medical evacuation costs, minor medical costs, accidental death and dismemberment, etc. How much coverage you buy is a matter of personal preference and tolerance for risk. I’d look for at least $25,000 in medical coverage and $300,000 in evacuation coverage.

 

Beyond that, you may need more extensive coverage depending on what types of activities you’re planning. For instance, are you going skydiving or bungee jumping? Extreme adrenaline sports may require extra coverage. Divers should consider specific diving insurance that covers decompression chambers. Generally things like hiking, snorkeling, whitewater rafting, and sports are covered, but double-check the policy to be safe.

 

Personally I’m a huge fan of World Nomads. Their travel insurance policies are top-notch, and they’re known for providing good customer service. I’ve never had to file a claim with them, but they’ve been very responsive to my questions both via email and phone. Even better, they’re affordable for budget backpackers — and you can even buy insurance once you’re already on the road!

 

Want to check out what they have to offer? Get a quote by filling out your trip details below.

 

How to file a travel insurance claim

 

If you're going to sit on the edge of Africa's largest canyon, you may want travel insurance
If you’re going to sit on the edge of Africa’s largest canyon, you may want travel insurance

 

If something goes wrong on your trip, you may need to file a claim with your travel insurance company. This is most commonly done online, either while you’re still on the road or after you get home.

 

The first step — while you’re traveling — is to make sure you get documentation for everything that you may need to file a claim for. Insist on receipts for any additional transportation you purchase. Same thing for any medical services you receive — even if it’s just a $2 refill of anti-malarial pills, you may need to prove that you sought medical attention. If you’re the victim of a crime, you’ll need a police report (the travel insurance company won’t care how corrupt the cops are).

 

When the expenses are relatively small, you’ll likely have to pay for them up front and seek reimbursement later. If you really don’t have the cash, it’s worth trying to contact your insurance company’s emergency line and see if they’ll pay, but they may not.

 

For more serious medical needs, like if you’re incapacitated, the insurance company will pay up front. Most travel insurance companies have 24-hour contact numbers to deal with this very situation.

 

Insurance companies often take several weeks to process claims. They may come back to you with additional questions or to provide more documentation. This is where it really helps to have every receipt, credit card statement, report, etc. But assuming your damages are covered by your policy, you’ll get your reimbursement eventually.

 

One major caveat: What travel insurance won’t cover

 

Your travel insurance won't cover you in the barren wasteland that is the Danakil Depression
Your travel insurance won’t cover you in the barren wasteland that is the Danakil Depression

 

Most travel insurance companies have a big asterisk on their policies pertaining to government-issued travel warnings. If you choose to travel in these areas, it is highly unlikely your insurance will cover you.

 

If this seems like it shouldn’t be a problem, keep in mind how paranoid the State Department is about the rest of the world. You might expect North Korea to be on their no-go list. But other places — like Patzcuaro, a small town in Mexico — are more surprising.

 

Your risk tolerance will dictate whether you want to go to those travel warning zones. But keep in mind that, depending on the warning, the odds of something expensive happening to you might also be a lot higher. For instance, the Danakil Depression in Ethiopia is on most foreign governments’ no-go lists. It’s also extremely remote, so if something bad did happen, you’d have to be airlifted out. That’s a very different risk calculation than Patzcuaro, where you could always just take an hour-long bus ride to a good hospital in a city without travel warnings.

 

Convinced yet?

 

Travel is getting safer and easier all the time. But just because nothing has ever happened to you on a previous trip doesn’t mean it won’t on the next one. Travel insurance takes away the worry that your $500 vacation could turn into $200,000 in medical debt.

 

I used to be much more lax about travel insurance. I took a number of trips where I wasn’t covered. But at some point, I realized my entire travel budget — potentially for the rest of my life — could be wiped out in a heartbeat if I got sick or injured.

 

Now, I take a World Nomads policy with me on every trip. In fact, I just bought my insurance for a trip to Indonesia next month. I feel much better knowing that I won’t have to buy an expensive last-minute flight if my connection is delayed, or I’m protected if I get bitten by a shark!

 

Are you on the fence about travel insurance? Has your insurance come through when you really needed it? Leave a comment!

 

Note: This post contains affiliate links. If you decide to purchase through these links, I receive a percentage of the sale at no additional cost to you, which allows me to keep this site up and running.

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Woow, great article. This is really helpful and I am saving it for sure 🙂
Ejnets in Lisboa