Frequently Asked Questions: Travel Insurance
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Some jet-setters may go their entire lives without even considering purchasing travel insurance. Some infrequent travelers may never set foot on an airplane without first signing up for full travel coverage. Travel insurance is one of the most misunderstood forms of insurance in the world. Here are some questions that people frequently ask when they are in the process of deciding if travel insurance is a good investment:
What is travel insurance?
Travel insurance can be purchased by anyone taking a trip. It is most often associated with air travel, package vacations, and cruises. People traveling by car are covered by their auto insurance in case of accident and by their health insurance (usually) in case of illness. Travel insurance policies differ depending on the provider, but most cover emergency medical treatment and also reimburse travelers for any portion of their trip that is canceled due to unforeseen, uncontrollable events.
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Why should travelers consider this form of insurance?
The usefulness of travel insurance is not always clear. However, those who have experienced flight cancellations or had a medical emergency while abroad will swear that it is one of the most useful types of insurance. A traveler's health insurance probably does not cover overseas medical care. Travel insurance will cover medical expenses incurred overseas and many plans also include a service that will airlift the insured person to better medical facilities if deemed necessary.
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Does travel insurance help in the event of a natural disaster?
If your low season trip to the Caribbean has to be canceled because a hurricane is about to hit your chosen destination, travel insurance will cover your financial losses or, in some cases, advocate on your behalf for a full refund from hotels, airlines or tour companies. Not all insurance plans cover all types of disasters, so it is best to research before purchasing. For example, many travel insurers do not cover those who are victims of acts of war or terrorism.
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What else is not covered?
Aside from acts of war, insurance companies will not cover trips that are cancelled or cut short because of foul weather (as long as it is not life threatening). If a traveler wants to return home early because it is raining during their tropical beach vacation, insurance will not reimburse them. Also, many insurers, though not all, do not cover cancellations due to an outbreak of disease. Most will, however, cover medical expenses of insured people who fall victim to an outbreak.
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Is trip insurance different than travel insurance?
Trip insurance only covers cancellations of flights, hotels, and tours. There is no medical coverage. This is useful for people who are traveling domestically or whose health care coverage includes services in the country that they are visiting. The premiums for this type of insurance are much lower than for full travel and medical coverage.
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How long does the insurance last?
The good thing about travel insurance is that you can buy it for exactly as long as you need. Plans are prorated so that users can pay by the week or by the day. Many larger insurers, AIG and IMG for example, offer yearly plans for frequent travelers.
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What about developing world travel?
Travel insurance is especially useful for travelers visiting countries with poor infrastructures. It is important to choose a plan that includes emergency medical airlift service (MEDJET Assistance and AirMed International are two of the providers that specialize in this type of service). This will ensure that the insured person is transported to facilities with modern medical care if needed.
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What about death?
Some providers cover funeral services abroad and repatriation of remains. However, many do not. Even families of people with life insurance may have to pay for repatriation if their loved one dies abroad. It is best to check with your provider to see if they cover you in the event of death. Repatriation can be quite expensive.
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Do people actually use travel insurance?
The industry estimates that 5% of people who purchase travel insurance actually file claims. Most of these are for trip or service cancellations or for minor medical treatment.
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What about the cancellation policies of a hotel, cruise line, or airline? Don't they make trip insurance redundant?
Most airlines will allow customers to change or cancel their ticket, but they may also charge a cancellation fee. Cruise lines do likewise. Hotels are often stricter and do not change dates as easily. Trip insurance covers all cancellations in the event of illness, death in the family, natural disaster and other situations of that nature.
Back to top
How much does travel insurance cost?
The cost of travel insurance varies widely depending on the cost of the trip, any inherent risks involved, the time of year, and many other variables. According to major insurer AIG, it is possible to estimate the cost of insurance. Premiums are generally between 5%-7% of the total cost of the trip (airfare plus hotel plus any pre-booked tours or rentals). People traveling to unstable regions or people with pre-existing conditions will have to pay a higher-than-average premium.
Back to top
What are some insurance companies that provide travel insurance?
International Medical Group provides some of the most comprehensive coverage of any travel insurance provider. However, premiums are a bit more expensive than the competition.
AIG is another high-end provider, while MEDJET is one of the more specialized providers, solely offering airlift services to customers.
The Practical Nomad web site has a list of other insurance companies that specialize in travel insurance.
Back to top
Some jet-setters may go their entire lives without even considering purchasing travel insurance. Some infrequent travelers may never set foot on an airplane without first signing up for full travel coverage. Travel insurance is one of the most misunderstood forms of insurance in the world. Here are some questions that people frequently ask when they are in the process of deciding if travel insurance is a good investment:
- What is travel insurance?
- Why should travelers consider this form of insurance?
- Does travel insurance help in the event of a natural disaster?
- What else is not covered?
- Is trip insurance different than travel insurance?
- How long does the insurance last?
- What about developing world travel?
- What about death?
- Do people actually use travel insurance?
- What about the cancellation policies of a hotel, cruise line, or airline? Don't they make trip insurance redundant?
- How much does travel insurance cost?
- What are some insurance companies that provide travel insurance?
What is travel insurance?
Travel insurance can be purchased by anyone taking a trip. It is most often associated with air travel, package vacations, and cruises. People traveling by car are covered by their auto insurance in case of accident and by their health insurance (usually) in case of illness. Travel insurance policies differ depending on the provider, but most cover emergency medical treatment and also reimburse travelers for any portion of their trip that is canceled due to unforeseen, uncontrollable events.
Back to top
Why should travelers consider this form of insurance?
The usefulness of travel insurance is not always clear. However, those who have experienced flight cancellations or had a medical emergency while abroad will swear that it is one of the most useful types of insurance. A traveler's health insurance probably does not cover overseas medical care. Travel insurance will cover medical expenses incurred overseas and many plans also include a service that will airlift the insured person to better medical facilities if deemed necessary.
Back to top
Does travel insurance help in the event of a natural disaster?
If your low season trip to the Caribbean has to be canceled because a hurricane is about to hit your chosen destination, travel insurance will cover your financial losses or, in some cases, advocate on your behalf for a full refund from hotels, airlines or tour companies. Not all insurance plans cover all types of disasters, so it is best to research before purchasing. For example, many travel insurers do not cover those who are victims of acts of war or terrorism.
Back to top
What else is not covered?
Aside from acts of war, insurance companies will not cover trips that are cancelled or cut short because of foul weather (as long as it is not life threatening). If a traveler wants to return home early because it is raining during their tropical beach vacation, insurance will not reimburse them. Also, many insurers, though not all, do not cover cancellations due to an outbreak of disease. Most will, however, cover medical expenses of insured people who fall victim to an outbreak.
Back to top
Is trip insurance different than travel insurance?
Trip insurance only covers cancellations of flights, hotels, and tours. There is no medical coverage. This is useful for people who are traveling domestically or whose health care coverage includes services in the country that they are visiting. The premiums for this type of insurance are much lower than for full travel and medical coverage.
Back to top
How long does the insurance last?
The good thing about travel insurance is that you can buy it for exactly as long as you need. Plans are prorated so that users can pay by the week or by the day. Many larger insurers, AIG and IMG for example, offer yearly plans for frequent travelers.
Back to top
What about developing world travel?
Travel insurance is especially useful for travelers visiting countries with poor infrastructures. It is important to choose a plan that includes emergency medical airlift service (MEDJET Assistance and AirMed International are two of the providers that specialize in this type of service). This will ensure that the insured person is transported to facilities with modern medical care if needed.
Back to top
What about death?
Some providers cover funeral services abroad and repatriation of remains. However, many do not. Even families of people with life insurance may have to pay for repatriation if their loved one dies abroad. It is best to check with your provider to see if they cover you in the event of death. Repatriation can be quite expensive.
Back to top
Do people actually use travel insurance?
The industry estimates that 5% of people who purchase travel insurance actually file claims. Most of these are for trip or service cancellations or for minor medical treatment.
Back to top
What about the cancellation policies of a hotel, cruise line, or airline? Don't they make trip insurance redundant?
Most airlines will allow customers to change or cancel their ticket, but they may also charge a cancellation fee. Cruise lines do likewise. Hotels are often stricter and do not change dates as easily. Trip insurance covers all cancellations in the event of illness, death in the family, natural disaster and other situations of that nature.
Back to top
How much does travel insurance cost?
The cost of travel insurance varies widely depending on the cost of the trip, any inherent risks involved, the time of year, and many other variables. According to major insurer AIG, it is possible to estimate the cost of insurance. Premiums are generally between 5%-7% of the total cost of the trip (airfare plus hotel plus any pre-booked tours or rentals). People traveling to unstable regions or people with pre-existing conditions will have to pay a higher-than-average premium.
Back to top
What are some insurance companies that provide travel insurance?
International Medical Group provides some of the most comprehensive coverage of any travel insurance provider. However, premiums are a bit more expensive than the competition.
AIG is another high-end provider, while MEDJET is one of the more specialized providers, solely offering airlift services to customers.
The Practical Nomad web site has a list of other insurance companies that specialize in travel insurance.
Back to top
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