How Do I Get the Most Out of Travel Insurance?

According to the U.S. Travel Insurance Association, Americans spent more than $2.2 billion on travel insurance protection in 2014, which represented an increase of about 17.5 percent over 2012. As more travelers become aware of the benefits of this type of coverage — and of the risks of going without it — more are opting to invest in it for themselves. If you are among them, however, you might be feeling overwhelmed by the sheer variety of options.

Indeed, dozens of insurance companies offer travel insurance policies these days, and a single provider typically offers dozens of options and configurations to choose from. It’s little wonder, then, that people often struggle to choose a policy. If you are in the market for travel insurance, it pays to do plenty of independent research and to understand the basics of what is available. Read on to gain valuable insights into getting the most out of this type of coverage.

Do I Need Travel Insurance?

Most people can benefit from investing in travel insurance before heading off on vacation. Some especially good reasons for acquiring this type of coverage include:

Emergency Medical Care

The vast majority of U.S. insurance plans are in-network plans and therefore provide no coverage overseas. If you become injured or ill while abroad, then, you could end up with thousands of dollars of medical debt. The right travel insurance policy will provide coverage of upwards of $100,000 for the cost of emergency medical care overseas.

Trip Cancellation and Interruption

When it comes to vacation getaways, even the best-laid plans can go awry. Can you afford to lose the amount that you have invested in your travel plans if something occurs and your trip must be canceled or cut short? Travel insurance policies with trip cancellation and interruption coverage protect you financially in the event that your vacation plans fall apart for just about any reason.

Theft and Loss

While your homeowner’s insurance policy may provide limited coverage while traveling, odds are that it falls short of truly protecting you while you are abroad. If you can’t afford to recoup the expense of lost luggage, electronics, and other belongings, a solid travel insurance policy is an absolute must. Note that you can typically purchase additional coverage if you tend to travel with a lot of stuff.

What Are the Types of Travel Insurance?

When shopping for travel insurance, look for a plan that includes the protections that you need. Examples of the types of popular travel insurance features include:

Medical and Accident Coverage

Most travel insurance policies automatically include medical and accident coverage. However, it is important to select a plan that has reasonable limits. Aim for medical and accident coverage of around $100,000. Plans are available for up to $1 million in such coverage, but that is overkill for the vast majority of people.

Emergency Evacuation Coverage

If you have to abandon your trip due to a mandatory evacuation, this type of coverage will help you to recoup your lost expenses. This feature also typically includes provisions for safely and effectively evacuating the country to return home, which is a nice bonus.

Trip Cancellation and Interruption Coverage

What if your trip falls through or is cut short for something other than a mandatory evacuation? Many plans include trip cancellation and interruption coverage that is valid for nearly any reason — but always read the fine print to make sure. There are typically exclusions as well, and it’s important to be aware of them before buying a policy.

Theft and Loss Coverage

Many homeowner’s insurance policies include limited coverage for personal belongings while traveling. If you’re like many travelers, however, and carry expensive electronics and other items, you’re unlikely to be adequately protected. Theft and loss coverage is usually included in these policies, but it is often for a minimal amount. You can typically upgrade this type of coverage to more adequately suit your needs.

Car Collision Coverage

If you will be using rental cars while overseas, it’s important to realize that your auto insurance policy from back home is not going to protect you. Luckily, car collision coverage is usually an available upgrade for travel insurance plans, and it is well worth it for the peace of mind that it brings. If you rent a car while abroad and get into an accident, this type of coverage will cover the associated costs minus any applicable deductible.

Lost or Delayed Baggage Coverage

Nothing is worse than arriving at your destination halfway across the world only to learn that your luggage has been lost along the way. Even if it eventually turns up, you will be stuck having to buy replacement things in the meantime. Unless you have lost or delayed baggage coverage, which will reimburse you in the event that your bags are lost or delayed and you need to buy new supplies.

Legal Aid Coverage

Depending on where you will be traveling and what you will be doing, you might also be interested in legal aid coverage, which is offered as an upgrade on many travel insurance plans. In the event that you become entangled in legal woes while overseas, this coverage will help to pay for the cost of legal aid and assistance. Needless to say, this can provide incredible peace of mind when traveling in a foreign land.

What Else Should I Know?

In addition to selecting a travel insurance plan that includes the coverage and features that you need, you should take the time to research various options before making a decision. Some considerations to make along the way include:

1. Premiums and deductibles: Find a plan that strikes a good balance between an affordable premium and a reasonable deductible.
2. Coverage limits: Know how much your plan will cover for things like emergency medical care and lost or stolen items to ensure that you’re adequately protected.
3. Claim processing time: Check online reviews to find out how quickly claims are processed — you don’t want to have to wait months for reimbursement.
4. Customer care: Stick with travel insurance plans that include 24/7 assistance. After all, there’s no telling when or where you will need help while abroad.
5. Available upgrades: Finally, the best travel insurance plans can be customized with a variety of available upgrades. Avoid plans that back you into a corner in terms of features.

Confusing though it may be to shop for, travel insurance is one of those things that you shouldn’t go without. Ideally, of course, you will get through your vacation without having to use it at all. If you do need it, however, you will be thankful that it’s there.