Is Travel Insurance A Waste Of Money?
Just as you would not risk your belongings in a boat without insurance, you should not travel abroad without the proper travel insurance. But is it worth it?
This blog post will help answer that question and more. Whether you are an experienced traveller or someone new to international travel, there are very few circumstances where it would be advisable to go with out appropriate coverage.
What Is A Travel Insurance Policy?
Before we get too far, let us first define what exactly a travel insurance policy is. The basic concept is pretty simple: You insure your belongings against theft or loss while you are away. If your home or office was broken into, then the insurance company would pay for items you had on hand (e.g., computer equipment) and replace them with new ones. In the case of travel insurance, you insure yourself against any financial loss as a result of theft or loss of your belongings. The policy will pay you back for everything from lost baggage to medical care.
Is Travel Insurance A Waste Of Money?
There are many reasons why having a travel insurance policy is a good idea. While not every reason has to do with money, most do. According to statistics, losing your bags while traveling is more likely than death by natural causes in 2010: there were 10 reported deaths due to travel versus 434 bags left behind or stolen on flights worldwide. And these are reported losses. For every bag that is left behind, there could be dozens more that go unreported.
Medical And Travel Insurance
Of course, the most obvious reason to get travel insurance is for medical reasons. While most countries have some form of universal healthcare, it is limited and still very expensive to use in many cases. Depending on the country you visit, it can cost thousands of dollars just to take a cab ride from the airport to your hotel. These costs can be avoided with travel insurance.
The same goes for any medical issues you might have upon your return home. Some countries require that tourists have a visa before they will see a doctor, and the cost for this is still well over $50 in most cases. If you purchase the right type of travel insurance, however, you will not have to worry about paying for medical care while abroad.
It is important to note that many policies will not cover diseases acquired while traveling such as food allergies, HIV/AIDS and cancer (depending on the country of residence). As such, it is always best to check your policy carefully before purchasing it.
Baggage And Personal Effects
Another reason to get a travel insurance policy is the loss or theft of your personal effects. If you want to keep all of your belongings with you at all times, then this probably will not be an issue for you. But if you are a "set it and forget it" kind of person when traveling, then having insurance on your bags and other belongings is a very smart idea. The cost associated with replacing or repairing lost luggage can be staggering. It is much easier to just file a claim for the loss than it is to try and replace everything yourself.
A bad experience with an airline can end up costing you a lot of money if you do not have the right travel insurance. Sure, going viral on Facebook with an angry rant might get your frustrations off your chest, but would it be worth it to not have a place to stay for the night? If your luggage is lost or stolen, having insurance will reimburse you for any personal items you might have to buy while traveling. Also, if your plane is delayed or cancelled due to weather or natural disaster, many travel insurance policies will even pay for additional meals and accommodations.
But What If I Don't Plan To Travel?
For some people, the cost of insurance is a deterrent to someone who wants to travel but has no desire to do it on a regular basis. This is perfectly understandable and there are ways around it. If you only travel once per year or less, then you would probably be able to get by with taking out a non-refundable policy with specific coverage limitations. Just be sure that you are aware of them before you buy the policy.
For example, most policies will not pay for things such as baggage, medical care and lost personal effects if you have already purchased the proper coverage and have been reimbursed for these expenses. If you have already had a claim paid for, then you will not be covered for any additional expenses. Check the fine print before purchasing a policy and you'll be able to find out what is covered for what expenses.
You should also make sure that your health coverage is covered by your travel insurance. Many policies will not pay for medical care if you are covered by Medicare, Medicaid or other government programs that provide free health care to low income individuals. Also, if you do not have payment arrangements in place with your doctor and hospital, then some policies will simply decline medical treatment claims where PHI (private medical information) was used to process the request.
How Much Does Travel Insurance Cost?
On average, travel insurance policies will cost anywhere from 5 to 20 percent of your total trip costs. As a general rule, the more expensive the trip is, the more expensive your travel insurance will be. The type of coverage you choose is also going to have a major impact on what you end up paying for your policy.
Most policies are going to be divided up into two major categories: single trip and annual or multi-trip policies. Single trip covers you for just one planned vacation over a given period of time (e.g., one month). Annual or multi-trip policies will cover you for multiple trips in the same year (e.g. several trips to the same destination, or to different destinations, over a 12-month period).
You can save money on annual policies if you are planning several trips in a year. For example, if you are going to be traveling three times in any given year, then an annual travel insurance policy might be the best deal for you. However, if you only plan to make one trip per year, then a single trip policy might actually be cheaper than an annual policy because of the various discounts and bonuses they offer.
It is sometimes advantageous to purchase a single trip policy for multiple years as well. For example, say that you made one big trip every two years.
Conclusion
If you are a frequent traveler, then a multi-trip policy is probably best for you. However, if you are only going to take one or two trips per year or less, then purchasing a single trip policy might make the most sense for your particular situation. It all depends on how much you want to spend and how often you plan to travel. Regardless of what type of policy you choose to purchase, always read the fine print before signing anything so you know exactly what your policy does (and does not) cover.
The more research and time that goes into buying travel insurance, the better off you will be when trouble strikes on your next vacation.