Under the best circumstances, travel insurance makes for expensive peace of mind. Under the worst circumstances, though, the decision to buy travel insurance can save you thousands of dollars and countless hours of anxiety and inconvenience. What are the risks that could derail your plans before or during the trip? How much have you invested in the trip, and what are you willing to lose if something goes awry?
Travel insurance usually costs anywhere between 3 and 15 percent of price of the trip, with an average deductible of about $200. Services provided by insurance companies typically include 24-hour multilingual phone assistance while traveling. Policies can cover specific things or a combination of needs.
Before deciding to buy travel insurance, check to see what kind of coverages you already have. Some major credit cards offer coverage for medical emergencies, baggage loss and/or cancellation of trip components that were paid for with the card.
Types of Coverage
Cancellation and interruption policies cover the nonrefundable penalties or losses incurred for a number of reasons, like illness, bankruptcy of the tour company or airline, or a missed flight due to an accident, strike or inclement weather. Trip cancellation covers when you don’t make the trip at all; interruption insurance covers when a trip is cut short before completion (in this case, you are only reimbursed for the unused portion of the trip).
If you’re traveling abroad, check to see if your health plan includes out-of-network overseas coverage. Some providers—including Medicare—do not, although some Medigap plans cover emergency care outside the U.S. Travel medical insurance plans are available, and they provide primary as well as supplemental care not provided by your existing plan.
Especially useful if you’re traveling to remote places, evacuation insurance covers the cost of transporting you to where you can get needed emergency care. Some policies include transportation home after an accident, but most include transport only to the nearest major hospital. Risky activities, such as bungee jumping, are usually not covered, although some companies offer supplementary coverage for adventure sports.
Your AAA Travel Counselor can help you select a travel insurance policy that’s right for you.