Many travelers are under the misconception that they don't need travel insurance and that their credit cards or medical insurance will cover them if anything goes wrong.
This mistaken belief could potentially cost travelers hundreds of thousands of dollars, should they find themselves in any number of possible situations. Here are three steps to help determine how best to protect yourself and your vacation investment:
Step 1: Assess Your Needs
To help make an informed decision, ask yourself the following five questions:
- If I become injured abroad, can I afford the cost of a medical evacuation?
- Does my health insurance cover me away from home and in foreign countries if I become ill or am injured while traveling?
- Can I afford the financial risk of losing my vacation investment if something goes wrong due to illness, weather, or other unforeseen circumstances?
- If I have to cut my trip short because of an emergency, can I afford the cost of a return airline trip home?
- If my bags are lost or I have to spend an extra night because of weather-related problems, can I afford to buy replacement necessities and pay for extra lodging?
Step 2: Evaluate Your Current Coverage
Will your credit card and/or health insurance cover you if you need to cancel or interrupt a trip because of illness, if you need to be hospitalized abroad, or if you have to pay for an extra hotel night because of bad weather? Many travelers mistakenly believe that that their credit cards, health and home insurance will cover any situation that arises.
- Most credit cards don't provide trip cancellation or built-in medical coverage, nor will credit cards reimburse for inconveniences caused by travel delays. Your credit card may cover some costs associated with baggage delay or damage, but only if you purchased your trip with that credit card.
- Most traditional domestic health insurance plans limit coverage for out-of-country medical expenses to emergency-related costs, have high deductibles and co-pays for emergency treatment abroad, and don't cover out-of-country emergency medical transportation in cases of life threatening illness where medical evacuation may be required. A medical evacuation, alone, can cost tens of thousands of dollars. Especially from overseas.
- U.S. airlines are not required to provide accommodations or reimbursement and have limited refund policies for delays that are beyond their control, such as weather or natural events including floods or volcanic eruptions. Nor are they required to reimburse expenses due to baggage delays.
- Homeowner's insurance does not reimburse for the cost of purchasing replacement items if bags are delayed.
- Read your policy carefully and understand the coverage. If the policy doesn't meet your needs, travel insurance policies typically include a refundable grace period. During that time, if the policy does not meet your needs, the cost is refunded.
Step 3: Compare Travel Insurance
Standard comprehensive travel insurance policies provide coverage for trip cancellation and interruption, medical, travel delay, and assistance services under one umbrella. In fact no other single source provides the full spectrum of coverage and services that comprehensive travel insurance does. In addition to comprehensive travel insurance, travelers can also find medical only policies, assistance policies and travel insurance that covers special circumstances.