While we wish everything would go smoothly, it is inevitable that if we travel a lot, we will have some issues at one point in time. Best to be prepared with the appropriate insurance which minimizes the impact to your holiday and takes the sting out of any personal liability or unexpected surprise costs.
Foreign companies are not always as customer centric as the US ones we are used to. Once, we rented a scooter in Rome, and with all the cobblestone streets the muffler came loose. Expecting a new scooter and a discount if not a refund, we went back to the shop only to have the owner want to charge us 400 euros for repairs! After some argument we ended up paying only 100 euros but still, not at all what we would expect from our usual rental car companies here.
Here are some of the places where you might find insurance which already has you covered:
- Your existing home and car policies
- Your work health plan may have some travel coverage
- Your credit cards, especially travel cards
- Independent travel policies
Types of travel insurance
Trip cancellation and interruption
What happens if you change your mind or simply cannot go? Or something happens while you’re away and you have to cut your trip short. There are typically two types of trip cancellation insurances:
1- Cancel for any reason: As the name states, you can cancel for any reason before your departure. This is expensive, count on 1/3 of your trip cost.
2- Cancel for emergencies: Things that can be proven with documentation like deaths in the family, severe illness, or the like. Read the conditions carefully, not all insurances are equal, and exclusions vary.
We don’t generally take the ‘any reason’ one, and recently with the pandemic, reservations have been more flexible. That said, this is starting to change.
Keep in mind that these insurances have limits on coverage. Some will only pay up to a $2,000 limit, so don’t expect that expensive safari to be fully covered without a premium plan.
Also, consider your deposit schedule. If you’ve only left deposits and if parts of your reservation are already refundable, then you should only insure up to a maximum of what you are liable to lose. For example, if you are staying two weeks in a hotel but cancellation is only the first night’s stay, you only need to insure one night’s worth of expenses. Or if your plane has a $500 change fee, that might be all you need to cover even if the ticket cost a lot more.
See our post: Managing Last-Minute Travel Cancellations
Trip delay
What happens if you are delayed or miss a connection or your departure? A snowstorm, maintenance, or even an accident in the Uber on your way to the airport. This type of insurance will help cover your expenses to get there with alternate arrangements and let you enjoy at least part of the trip.
We have this with our credit cards. One reason we topped up our credit card coverage was that they only covered us after an 8-hour delay. This may sound like semantics, but assuming you have a 2-hour connection, and your first flight is delayed 4 hours. Well, it’s not 8 hours, but guess what? You miss your connection anyway.
Lost or delayed luggage
Yup, it happens. And there you are with the clothes you are wearing about to board that 2-week cruise! This insurance helps you get essentials, clothes, and other replacement items at your destination. It usually kicks in after a set time, so don’t run to the store expecting reimbursement immediately, you may need to wait 6, 12 or even 24 hours and make sure you get the lost luggage receipts to back up your claim.
Medical and accident insurance
Your work plan may not cover you if not traveling for business. What happens if you have an accident? It can be expensive and as a foreigner not speaking the language, you may need assistance. The insurance plans that offer coverage usually have helplines to walk you through anything that might happen. Here be careful, as you may need to use ‘in-network’ facilities or to contact them before making any charges.
Some sports, like scuba diving or other extreme sports, may not be covered by standard policies and may need special policies instead. We use DAN (Divers Alert Network) for our dive insurance, they are best known for this.
See our post: Needing Medical Care While Traveling
Evacuation and repatriation
If you get so sick that they need to transfer you to a bigger city or back home for treatment, this can be very expensive, and can even be in the tens of thousands, and even hundreds of thousands of dollar range. Even if, God forbid, you were to pass away, transporting remains to your home country is an expensive and complicated matter.
We have added this insurance as some of our trips into more remote areas had required it. Some premium travel credit cards also offer these options, such as our Chase Sapphire card.
Rental car coverage
In most cases, travel credit cards offer good coverage for rental cars, but you must make and pay for your reservation using this card. You may also have this coverage with your existing car insurance policy as a low-cost option.
Look out for limits before accepting that fancy convertible upgrade, some insurances will only cover a maximum car value of $50,000 leaving you liable for the rest. Also, there are many up-sell scams at car rental agencies. I remember in Iceland, they tried to sell us a volcano ash protection coverage. I guess the rental car would be the least of our worries, if we started seeing ash raining down!
What do we do?
We travel a lot and have a yearly travel insurance plan. For some trips, it is mandatory to have evacuation insurance (some safaris and expeditions), and this tops up our credit card insurance coverage amount to something which passes the test.
If you travel 3 times a year or more, it is worth exploring a longer-term plan like this yearly one we have, it’s only about $200 a year for the two of us. I also have a premium travel card (more than one) which offers a good deal of protection, up to $5,000 of cancellation insurance. For our diving, we keep our DAN policy updated as well.
Let us know if you have any other suggestions or recommendations for travel insurance.