Travel Insurance

Even with the best laid plans, things can and often do go wrong when you’re on the road. You miss a flight connection and need to spend the night in a hotel. Your checked bag goes missing. Someone dings your rental car in a fender bender. You get sick during a vacation and need medical care. Any of these could cost you not only valuable time, but a lot of money.

That’s where travel insurance comes in. Travel insurance is a way to make sure you are protected against these and other mishaps when you’re away from home. As with any type of insurance, the cost, coverage amounts, and terms and conditions can vary from policy to policy. But in general, travel insurance can be an inexpensive way to make sure you are covered if your trip goes off the rails. Here’s what you need to know.

How Does Travel Insurance Work?

Travel insurance is a way to shield yourself in case something goes awry during a trip. There are a few different ways to obtain travel insurance. Some homeowners and renters insurance policies include travel benefits (often limited to lost or stolen belongings. Finally, you can simply purchase a travel insurance policy for a specific trip or time period.

There are five major types of plans:
1.  Comprehensive plans: These policies usually include things like trip cancellation and interruption coverage, and may reimburse you for items such as meals and lodging during delays. They may also provide medical and evacuation coverage.
2.  Medical plans: Travel medical plans are usually for folks who want medical coverage outside the area in which their regular health insurance applies. Plans may be geared to people who are traveling long-term, like six months or more, and may have pre-existing conditions. These plans don’t usually extend benefits like reimbursing you for canceled trips or lost bags.
3.  Emergency evacuation: These plans provide transportation assistance if you are injured or become seriously ill while traveling. Some even have a benefit that lets you stipulate your hospital of choice, or will take care of repatriating your remains if the worst should happen.
4.  Accidental death and dismemberment: This type of policy includes a lump-sum payment to you or your beneficiaries if your trip has catastrophic consequences.
5.  Vacation rental: You’d never buy or rent a home without making sure you were protected against things like accidental property damage, and you should consider doing the same when renting a home while traveling.

How Does Travel Insurance Cover?

Insurance policies, travel-related and otherwise, are complicated. Many only apply in specific situations, and nearly all set forth long lists of exclusions that could prevent you from enjoying their protections. Here are some things to look out for in so-called comprehensive plans that wrap in trip cancellation, interruption, delay, lost baggage, medical coverage and more.

Coverage Usually Included in Comprehensive Plans : In general, most comprehensive travel insurance plans will cover the following situations, though the dollar maximums you can expect for reimbursements will vary from one policy to another.

•  Trip cancellation and interruption: This benefit kicks in when you have to end your trip early, or call it off altogether, due to unforeseen circumstances. Eligible reasons include if you or a family member becomes sick before or during travel, if there’s inclement weather or a natural disaster that prevents you from traveling to or remaining in your destination, or if your common carrier (such as your airline or cruise line) goes out of business.
•  Trip delay: When your common carrier is delayed (usually more than 12 hours or overnight) and you have to purchase things like meals or lodging, you might be eligible for $100 to $500 per person per day depending on your plan.
•  Lost or delayed luggage: If your bag is lost, stolen or delayed, you might be entitled to reimbursement up to a certain amount for things like clothes and toiletries (jewelry, electronics and medications are not typically covered).
•  Rental car insurance: Just like you need an insurance policy to drive at home, it’s important to get coverage for when you rent a vehicle. These policies can range from bare-bones secondary coverage—meaning you have to exhaust any other types of applicable insurance you have—that only applies to collision damage or theft, up to comprehensive primary plans that will pay for things like medical expenses, too, without the need to go through your regular insurer.
•  Medical and evacuation: If you get sick enough to require medical treatment in your destination, or even transport to a medical facility in a different location, this type of coverage can pay for some of those expenses.
•  Travel accident insurance: If you are injured, maimed or die on your trip, travel accident coverage might reimburse your beneficiaries. The maximum amount tends to be between $100,000 and $1 million.

Coverage Excluded in Comprehensive Plans
As you might expect, insurers insulate themselves against major payouts by excluding many circumstances from coverage. Here are a few to keep in mind.

•  Traveling near home: Protections usually don’t apply to trips within 100 miles or so of your home.
•  Pre-existing medical conditions: If you become ill or injured due to a condition that you were either diagnosed with or that worsened before your trip, the policy’s medical and other protections might not apply to you.
•  Seeking medical treatment: If you are traveling specifically to seek medical treatment or care, then a policy’s medical benefits are usually void.
•  Pandemics: This has really come into play over the past year, but most travel insurance policies exclude trips where the traveler knowingly visits a destination where a pandemic is underway.
•  Adventure or other dangerous activities: These might include things like mountain-climbing, contact sports, or learning to pilot an aircraft or boat.
•  Substance abuse: If you are under the influence of alcohol, drugs or narcotics while injured or killed, don’t expect your coverage to come to the rescue.
•  Self-inflicted harm: If you injure or kill yourself intentionally, the policy is nullified.
•  War or civil unrest: If you are traveling to a destination where there is war or civil unrest, you might not be able to claim help from your insurer.
•  Personal effects: For baggage coverage, specifically, don’t expect reimbursement for things like electronic devices, eyeglasses, musical instruments, currency, contraband, vehicles (including bicycles) or animals.

This is a partial list of exclusions, so it’s worth reading the fine print on any policy you’re considering to make sure you don’t violate any of the terms accidentally.

When Does It Make Sense to Get Travel Insurance?

Travel insurance can be a great way to protect yourself from unforeseen expenses, especially on long and costly trips. For everyday travel, though, you might not need to look beyond your credit card. Many, especially those that earn travel like airline miles or hotel points, offer some level of travel insurance automatically as part of their benefits packages. Just remember that, for your trip to qualify, you usually must charge all or part of it to the card. Here are three cards with exceptional travel insurance benefits.

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