Travel essentials have always included items like durable luggage, extra chargers and a good pair of headphones but more travelers than ever are now adding trip insurance to that list.
In fact, in 2018, AAA’s domestic and international travel insurance sales increased more than 20 percent year-to-date, with 13 percent more members overall opting to purchase travel insurance.
“The world is an uncertain place and travel can definitely be unpredictable at times,” said Daniel Durazo, director of marketing and communications at Allianz Global Assistance USA, AAA’s insurance partner for over 30 years.
“Problems like lost bags, significant delays, canceled flights and missed connections happen all the time. Travel insurance can reimburse you for covered losses and make sure you get where you’re going. Plus, it can give you the peace of mind to enjoy your vacation without worrying about what can go wrong.”
According to Megan Cruz, Executive Director, US Travel Insurance Association (UStiA), “There’s a growing awareness of the kinds of events that could disrupt travel – including storms and other natural disasters, terrorist events and mechanical carrier-related issues, leading to an increase in the number of people buying travel protection products.”
So how do you know what you need?
What have you got to lose?
When planning your trip, don’t forget to buy travel insurance — Photo courtesy of iStock / hocus-focus
Cruz said it’s important to consider the nonrefundable expenses you’ve prepaid – flights, hotels, tours – that you could lose if you cancel your trip or cut it short. Add in other expenses you could incur if something were to go wrong, and whether you can afford to cover those expenses out of pocket – like an extra hotel night if a flight is significantly delayed, an unexpected flight home if you or a family member is ill, or emergency medical expenses if you are injured on your trip.
When traveling internationally, those emergency medical expenses are reason enough to opt for insurance. Navigating medical emergencies outside of the U.S. can be extremely difficult, and travel insurance helps you find a facility, guarantees payment and arranges and pays for transportation to get you there.
Medical treatment overseas can be expensive, with payments often required prior to treatment or before you can leave the hospital. Many domestic health insurance plans may not cover you in other countries, so you should check your policy. If you’re not prepared to pay all your medical bills out of pocket, travel insurance is a must.
Even more expensive than treatment, though, is emergency medical evacuation, which is more common than you’d like to believe. Medical evacuation and transport costs range from $15,000 to more than $200,000 – staggering numbers that can bankrupt someone without proper coverage.
Finding the right policy
Buying the right travel insurance policy is easier than you might think — Photo courtesy of Allianz Global Assistance
The idea of researching insurance policies can be daunting but you can find a list of member companies on the UStiA website to start with.
“We’ve recently simplified the language in our benefit descriptions, making it easier for customers to understand what situations can be covered,” said Allianz’s Durazo. “We also now remind customers what their insurance benefits are and ways to access emergency travel assistance by sending them emails days before their trip.”
Cruz recommends that you call and speak to a representative directly if you have any questions about what specific coverage you may require. Don’t guess, and make sure you actually read the terms and conditions of your policy. Travel insurance is designed to protect you from surprises, not cause them.
Benefits you may want to consider include:
* Reimbursement of the non-refunded portion of travel investment if the trip is cancelled or interrupted for a covered reason
* 24-hour access to emergency medical referrals and travel assistance
* Reimbursement for additional expenses caused by a travel delay or baggage loss or delay
* Reimbursement of additional expenses to return home safely in a covered trip interruption
* Payments for emergency medical care
* Arrangement of and payment for emergency medical transportation
“The right type of policy for each consumer depends on the trip and traveler,” said Durazo. “Emergency medical coverage may be most important for those on an international trip, while cancellation benefits and the like are of interest to all travelers. For a traveler taking expensive equipment with them, they may want a policy with more baggage coverage.”
As a rule of thumb, a travel protection plan will generally cost 5-10% of your total trip cost. That’s a small price to pay for peace of mind – not to mention what could be catastrophic expenses.
Don’t wait until the last minute
Flight delays and cancellations can be expensive without travel insurance — Photo courtesy of iStock / fizkes
Because travel insurance guards against unexpected events, Cruz stresses the importance of purchasing travel insurance at the time you book your trip. “You want to be sure your insurance is in place before anything happens, at which point it is no longer ‘unexpected’ – and may not be covered.”
For example, you shouldn’t wait until a hurricane is named to buy insurance because you won’t be covered if that hurricane actually affects your travel. A named storm is a known event. You were warned.
Filing a claim
If something does go wrong on your trip, be sure to save and include all pertinent documentation, including receipts, credit card statements, invoices and any written communication that substantiates your loss.
The most common reason a person’s claim is denied is because that situation (e.g. a sick pet) was never covered in their policy. Make sure you’ve carefully reviewed the benefits, coverage limits and covered reasons in any policy you’re considering.
Under the worst circumstances, travel insurance will make your life easier.
Under the best, you’ll never have to use it.