Why and also When You Must Get Traveling Insurance Coverage

Last Updated on May 27, 2022 by Chris

More and more Americans are buying travel insurance these days, according to a recent AAA survey. In the past few years, travel insurance sales have seen double-digit growth year over year.

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Should you buy travel insurance for your next trip? Here are the factors to consider.

Why Buy Travel Insurance

There are many good reasons to consider buying travel insurance. It’s particularly wise when taking an extended trip, an international vacation or any potentially high-cost trip.

Trip Cancellation Insurance

In the AAA survey, trip cancellation protection was the top reason for purchasing travel insurance. This reimburses travelers for their insured trip costs if they have to cancel their trip due to a covered reason. The covered reasons vary by provider and plan, but depending on the plan, these typically include:

• Accidental injury, sickness, or death of you, a traveling companion or a family member
• Weather events that cause cancellations in travel plans or a service stoppage
• Mandatory evacuation at your destination due to hurricane or other natural disaster
• Workers’ strike that causes complete cessation of travel services of your air carrier
• Bankruptcy and/or default of your travel supplier
• Terrorist attacks that occur in your destination
• You or your traveling companion are terminated or laid off from employment

According to the AAA survey, other top reasons to buy travel insurance included the cost of the trip (70 percent), personal or family health concerns (69 percent), how far in advance the trip is booked (61 percent) and recommendations made by friends or family (57 percent).

Medical Coverage

If you’re traveling internationally, your health insurance probably may not cover medical bills from another country. A travel insurance plan with medical coverage will take care of medical care and related costs, including the expensive cost of transporting a patient back home. Medevac costs can easily climb to over $100,000.

It’s also important to note that travel health insurance covers domestic as well as international hospitalization and treatment costs, and for people with the bare minimum health insurance, it can be helpful protection during domestic trips as well.

Collision Damage Protection

Renting a car in another country? Your personal auto insurance policy and credit card coverage may not extend to overseas. Some travel insurance plans include collision damage protection; this is a smart inclusion if you will be renting a car in a foreign country.

On a personal note, I’ve been unlucky enough to experience rental car damage in two countries. When I traveled to New Zealand, it was still excluded from coverage by most credit card policies. Of course, in New Zealand I had a window smashed in. Thankfully, the policy I had bought from Travel Guard stepped up and cut me a check for what I had to pay.

A few years later, I had a bumper smashed in in Cape Town, South Africa. I had collision coverage on my Travel Guard policy and had no issues there with my credit card paying me back for that damage. Still, it always feels more secure to have two layers of protection, and so even with credit cards that cover damage, I appreciate the travel insurance policy being there to back me up.

For Multiple Trips, Consider an Annual Plan

Not only is there an uptick in travel insurance sales, but there has also been a significant increase in the number of travelers opting for annual trip insurance plans in the last year. Annual plans generally cost several hundred dollars per year for a middle-aged individual and make sense if you plan to take more than two or three trips in a year.

Where To Buy Travel Insurance

As a rule of thumb, it’s not a great idea to purchase travel insurance from the same place as you are buying your trip. The idea is that travel agencies like Expedia and Priceline or cruise lines like Carnival or Royal Caribbean may offer travel insurance as an add-on, but the boiler-plate language is more favorable to them than insurance from an independent third party.

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Sites like InsureMyTrip and SquareMouth let you compare and contrast plans from dozens of different providers so you can find a plan that provides the coverage you need at a price that fits your budget.

Two major travel insurance providers that get high marks for reliability are:

• Allianz
• Travel Guard

Disclaimer: AutoSlash receives a small affiliate commission if you purchase insurance from Allianz or Travel Guard.

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