If you’re like me, here’s how you prepare for a big trip: You pack way too much, realize your suitcase won’t close, then start taking stuff out. The snorkel gear, the sarong, that second jacket… you don’t really need those.
But, there is one thing you definitely, absolutely need to pack: travel insurance.
I hear a lot of travelers say they don’t need travel insurance because “there’s no way I’m cancelling this trip” or “we’re definitely going on this trip”, but the truth is, it’s not that simple.
What happens if you get into a serious car accident the day before you’re supposed to leave for your trip?
What if one of your flights gets cancelled and you are stuck in another city for several nights? I’m raising my hand for this one – got stuck in D.C. for three nights last summer on the way to Jamaica.
What if you slip and fall on a wet surface at your resort and break your wrist?
None of these scenarios are fun to think about, but they can – and do – happen…probably more often than you may think.
Let's start with a few basics.
What is travel insurance?
Travel insurance is a plan you purchase that protects you from certain financial risks and losses that can occur when traveling.
These losses can be minor, like a delayed suitcase, or significant, like a last-minute trip cancellation or a medical emergency overseas.
In addition to financial protection, the other huge benefit of travel insurance is access to 24-hour assistance services, wherever you are in the world e.g. arranging medical treatment in an emergency, monitoring your care, serving as interpreters, etc.
Things to note about travel insurance:
Benefits vary by plan; it’s important to choose a plan that fits your needs and travel plans.
It does not cover every possible situation; it covers the specific situations, events and losses included in your plan documents.
It is designed to cover unforeseeable events – not things you could easily see coming; for example, if you wait to buy insurance for your beach trip until after a named hurricane is heading towards your destination, your losses wouldn’t be covered.
How does travel insurance work?
In most scenarios, travel insurance reimburses you for your covered financial losses after you file a claim and the claim is approved. Filing a claim means submitting proof of your loss to the insurance company so they can verify what happened and reimburse you for your covered losses.
Now, let’s talk a little bit more about why it’s so important to have travel insurance – especially now.
Two of the biggest things to keep in mind are:
Travel is just like any other financial investment that needs insurance. Even the best-planned trips sometimes have to be cancelled and losing all the money that’s been spent on your special trip is not something most people can afford.
Many foreign medical facilities and providers require cash payment up front and do not accept U.S. insurance plans, which makes it critical that you have travel insurance with medical coverage when traveling internationally.
When unexpected problems arise, travel insurance can help make things right.
If you have to cancel your trip for a covered reason, travel insurance can reimburse your prepaid, non-refundable trip costs. Without insurance, you could lose your vacation investment.
If you experience a covered medical emergency, travel insurance can help ensure you get high-quality care and reimburse you for covered medical costs. Without insurance, you may have to pay out of pocket when traveling overseas.
If you have a covered travel delay, travel insurance can reimburse you for necessary, eligible expenses like hotels and meals. Without insurance, delays can be expensive.
Does travel insurance cover COVID-19?
Travel insurance companies do not generally cover losses due to epidemics, government prohibitions, warnings, travel advisories or fear of travel, however, some travel insurance companies, like Allianz Travel Insurance, have a COVID-19 coverage endorsement in place for certain policies which can provide coverage for things like: trip cancellation/interruption if an insured traveler becomes ill with COVID-19 before or during their trip.
This means that travel insurance may provide coverage in the following situations:
If you had to cancel your trip because you test positive for COVID-19 prior to your trip.
If you need medical care for COVID-19 while you are traveling.
If you test positive for COVID-19 in destination and are required to quarantine.
Click here to read Allianz's COVID-19 FAQ.
If you’re still wondering “is travel insurance worth it?”, my advice is to weigh the small cost of buying insurance against the massive costs of a potential medical emergency overseas. To me, it’s definitely worth it and I won’t personally travel without it.
PRO TIP: The details of every insurance policy are different, so I always encourage my clients to speak directly with an insurance agent expert regarding any policy/coverage questions they have.
Here are some example questions to ask when you speak to an insurance agent expert about a policy:
What are the covered reasons?
What are the excluded reasons?
What percentage of my trip expenses will be reimbursed for covered reasons?
Are pre-existing medical conditions covered?
Does this plan include primary or secondary medical coverage?
What coverage is provided with regards to COVID-19 (e.g. testing positive prior to travel, needing medical care while traveling, having to quarantine in destination, etc.)?
Is there 24-hour assistance available while I’m traveling and how do I access it?
How much coverage does the policy include for the following:
Trip Cancellation
Trip Interruption (e.g. have to end trip early)
Travel Delay (e.g. stuck in transit or a temporary setback)
Baggage Loss/Delay
Emergency Transportation
Emergency Medical/Dental
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