How to Make Smart Travel Insurance Decisions?
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KEY POINTS
The travel insurance industry is very competitive. Do not accept the first policy offered by your booking agent. Do your own research and tailor your coverage to meet your needs and budget.
Coverage limits vary by insured risk and insurance provider. We can help you find the policy that best fits your travel needs.
Learn when to purchase your travel insurance and how much to buy. Consider existing coverage you may already have
Embarking on your travel plans provides numerous booking options, from the traditional expertise of travel agents to the convenience of online platforms like Expedia or Priceline.
However, relying on reactive travel insurance offered by your provider might limit your choices and lead to pressured, hasty decisions.
Instead, we advocate for a proactive approach—initiate your research on tailored insurance options early in the trip planning process.
Choosing travel insurance tailored to your unique needs is crucial, and opting for the limited options from your travel provider may not be the most optimal strategy.
We have partnered with 12 leading travel insurance providers, creating a competitive environment that benefits you. Our Travel Insurance Guide and individual reviews of each provider empower you with the information needed to make well-informed decisions.
To further enhance your journey, we recommend steering clear of these 13 common mistakes when purchasing travel insurance. By avoiding these pitfalls and taking a proactive stance in your decision-making, you can secure comprehensive coverage that aligns with your preferences at a competitive price.
13 Common Mistakes When Buying Travel Insurance
①
Know Your Existing Coverage Limits
It's essential to be aware of the limitations of any existing coverage from credit cards or group benefits plans. Supplementing with additional travel insurance provides comprehensive protection tailored to your specific needs. Understanding these limits ensures you have the necessary coverage for various scenarios that may arise during your travels.
②
Coverage Varies by Travel Insurance Provider
Before you start your comparison shopping below, be aware that insurance companies may offer similar types of coverage, but the coverage limits and details may be vastly different.
You may see trip cancellation insurance offered between 100-150% of the trip cost depending on the insurance provider and the specific plan you are reviewing. Medical accident and sickness emergency coverage may range from $25,000 to $1,000,000. Some policies may offer $1,000,000 emergency evacuation coverage while others offer minimal if any similar coverage.
Equip your self with a basic understanding of the travel insurance coverages available (e.g., trip cancellation, trip interruption, flight delays, missed connections, baggage (lost, delayed), medical, dental, emergency evacuation, emergency repatriation, AD&D, pre-existing condition waivers, cancel for any reason, cancel for interruption, cancel for work, adventure and extreme sports coverage, rental car, and more).
③
Cancellation Coverages
We mentioned these coverages earlier, but to ensure you catch them, we're emphasizing their importance once more. Among the most valuable coverages are specialty cancellation options, including cancellation for any reason, cancellation for interruption, and cancellation for work.
These sought-after coverages might be included in a top-tier plan or offered as an optional upgrade. While they may entail additional costs, the peace of mind and enhanced financial security they offer could justify the incremental increase in your travel budget.
④
Plan for Pre-existing Conditions
Typically, pre-existing conditions are not covered by travel insurance. However, some plans will provide a waiver under certain circumstances and if the coverage is purchased within a predefined period.
Uninsured medical costs can lead to personal bankruptcy. Therefore, if you have a pre-existing condition, it is imperative that you proactively plan to make this an integral part of your planning process.
⑤
Adventure Travel & Extreme Sports
Your usual vacation activities might include scuba diving, hiking up mountains, and downhill skiing. However, it's important to note that these pursuits may necessitate specialty insurance policies or specific upgrades to ensure you have the appropriate coverage.
From an insurance perspective the insurability of an excursion comes down to very specific details. Hiking can quickly be classified as mountaineering (requiring special insurance coverage) if you require things like ropes, guides, or other climbing equipment. Glacier excursions in Iceland can be exhilarating, but you need specialty insurance as soon as they put an ice axe in your hand.
⑥
Comparison Shopping
Allocating about 5% of your non-refundable trip expenses to travel insurance is a prudent investment. Just as you dedicated hours to meticulously plan your perfect trip at the right price, extend the same diligence to choosing your travel insurance.
Thoroughly researching and comparing different travel insurance policies enables you to make a well-informed decision. Each policy comes with distinctive features, benefits, and costs. Investing time in this comparison process ensures that you pinpoint the insurance that best suits your specific travel needs, offering essential coverage at a reasonable cost.
⑦
Consider More Than Just the Price
When selecting travel insurance, it's essential to look beyond the initial cost. Opting for the cheapest policy may seem economical, but it could leave you underinsured in critical areas. Also consider coverage limits and deductibles as they will impact you financially if you need to make a claim.
It's crucial to strike a balance between affordability and comprehensive
coverage, ensuring that the policy meets your specific travel needs and
provides adequate protection in unforeseen situations.
⑧
Submit Accurate Health Details
Honesty during the application process is paramount, particularly when disclosing your health information. Failing to provide accurate details about pre-existing conditions may result in claim denials or disputes. By transparently sharing your health history, you increase the likelihood of a smooth claims process and avoid financial complications during your travels.
⑨
Cover The Entire Trip
Opting for insurance that covers the entire duration of your trip is vital. Partial coverage may leave gaps in protection, especially during unexpected circumstances or emergencies. Comprehensive coverage for the entire trip ensures you are adequately protected from the moment you depart until your return.
⑩
Check for Extensions
Confirming if your travel insurance policy allows for extensions is crucial, especially if your trip is prolonged. Alternatively, you may need to purchase additional coverage. This ensures continuous protection throughout your extended stay, minimizing any potential gaps in coverage that could arise if your initial policy's duration falls short of your travel plans.
⑪
Purchase Travel Insurance When You Book Your Trip
The timing of obtaining travel insurance holds great importance. It's essential to secure coverage promptly after confirming your trip. Purchasing insurance post-departure exposes you to risks without adequate protection, leaving you vulnerable to potential financial setbacks in case of unexpected events during your travels.
Some providers also provide discounts or additional free coverage options
when insurance is purchased early. Compare offerings and see if these
inducements are of value to you.
⑫
Thorough Policy Review
Before embarking on your journey, take the time to thoroughly review your insurance policy. Understanding the terms, conditions, exclusions, and coverage limits is crucial. This knowledge empowers you to make informed decisions, mitigating the risk of surprises and ensuring that you are well-prepared for any unforeseen events during your travels.
Be sure to take your policy documentation with you during your travels. It
will contain the contact details for making a claim and provide an overview
of the claims process.
⑬
Promptly Notify Insurer of a Claim
In emergencies or when submitting a claim, informing your insurer promptly is crucial. Adhering to their procedures ensures a more efficient and effective claims process. Timely communication enhances the likelihood of a successful resolution, helping you navigate unexpected situations with the support of your insurance provider.
FINAL THOUGHTS
As you gear up for your travels, think of understanding your insurance like having a reliable travel buddy. With the nitty-gritty on coverage and providers, you've set yourself up for a smoother journey. Let this practical insight be your go-to, ensuring your adventures are both thrilling and secure. Wishing you safe and happy travels!
