When Should You Purchase Vacation Travel Insurance

When you first consider purchasing vacation travel insurance, you may be surprised that there are a variety of products to choose from. Like other forms of insurance, you'll find comprehensive policies as well as specialty policies like travel health insurance, travel medical insurance and even travel life insurance.

What kind of travel insurance coverage you choose will be determined by where you're traveling, how much your trip costs and what you'll be doing while you're away from home. Generally speaking, you can purchase travel insurance policies that cover you in the event of travel delays, medical issues and even baggage loss.

Common Types of Coverage
Travel insurance coverage can be broken down into four general areas: logistics, health and medical, life and loss or damage of your personal belongings.

Policies that cover logistics generally reimburse travelers for:

  • Expenses incurred in the event a flight is delayed. Some policies also cover any costs associated with additional travel needed to meet a cruise ship if other delays resulted in missing the ship's departure.
  • Cost of travel and accommodations for a trip you're unable to take due to illness, injury, severe weather, travel worker strikes, acts of terrorism or job loss.
  • Curtailment, which means you've been forced to cut your trip short due to illness, injury, severe weather, travel worker strikes, acts of terrorism, job loss other events beyond your personal control.

Travel medical and health insurance policies reimburse travelers for emergency medical and dental expenses and often cover pre-existing conditions if the policy is purchased within a certain timeframe after trips are booked. Be sure you understand the pre-existing conditions policy before you purchase any travel medical insurance. Some policies include medical evacuation coverage, which pays the cost for you and anyone else on the policy to return home and seek local, medical attention.

Travel life insurance coverage may be limited to in-flight only and covers death and dismemberment while accidental death coverage extends to the full length of your trip.

If you purchase travel insurance to cover the loss of your baggage during your trip, take the time to research all the restrictions that may apply. It's not uncommon for these policies to exclude certain items from coverage or cap reimbursement amounts on an item-by-item basis.

You can also purchase travel insurance that covers you in the event your rental car is damaged, which allows you to pass on the collision damage waiver offered by the rental agency (it's recommended that you still buy the rental company's liability insurance). Before you purchase a separate policy for just for your rental car, call your credit card company to see if this benefit is already part of your card member benefits.

Travel Insurance Costs
The cost for your travel insurance will be affected by where you purchase your policy, what coverage you need, where you're going and what your trip entails. If you'll be engaging in adventure sports on your trip, expect to pay more for insurance than if you're flying home to see your family at Christmas. In some cases, you may need to take out supplemental policies to cover high-risk activities or destinations.

You may also pay higher premiums or be forced to purchase comprehensive travel insurance policies if you have certain health conditions or you're pregnant. Again, before you purchase any policy, be sure you understand any and all restrictions that come with it to ensure you're covered.

For the average trip or vacation, plan to spend about 10% of the total cost for your trip on your travel insurance policy. By following this guideline, you'll likely be able to obtain coverage for logistics, medical and baggage loss or theft. Generally, policies cost more and provide more limited coverage when they're purchased from tour companies or cruise lines. To get the most coverage for your dollar, talk to your travel agent or a insurance agency that specializes in travel insurance.

When You Need It
If you've booked an expensive trip or vacation like a cruise around the world, luxury honeymoon or are traveling with several family members, travel insurance can help protect you from significant financial loss in the event you need to cancel or cut your trip short or someone in your party is injured or becomes ill.

You might also benefit from travel insurance if you have a medical condition like heart disease, diabetes or other chronic conditions that require ongoing treatment. In this instance, be sure the policy you purchase includes medical treatment as well as medical evacuation, which pays for getting you to the nearest medical facility or even back home for treatment.

Adventure travelers who'll be skiing, ice or mountain climbing or other engaging in other high-risk activities should consider taking out both comprehensive travel insurance and supplemental policies to protect them in the event of injury and accidental death and dismemberment, not to mention the relative cost of high-adventure travel.

Finally, if you're traveling with a significant amount of expensive equipment like camera or scuba gear, you'll gain peace of mind from purchasing travel insurance that cover any financial losses from lost or stolen equipment.

When You Can Skip It
When don't you need travel insurance? If you're flying from San Diego to Seattle for a long weekend, skip it. Travel insurance isn't intended for low-cost trips. Weigh the cost of the policy against any potential losses you might incur and determine your comfort level when it comes to what can and can't afford to lose.

If you're planning to visit the Caribbean two months from now and you're spending $1,000, you may decide you can tolerate the risk and absorb any financial loss. On the other hand, you're shelling out thousands and thousands of dollars for a honeymoon in the Galapagos that you're not taking for another year, purchase a policy.

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