No matter where you are going to travel and what is the purpose of that travel, you need to get a travel insurance before leaving your home country. It is mandatory to have a travel insurance in the majority of countries (especially in the developed world), yet having an insurance is recommended in any case.
However, there are different travel insurance packages that cover certain aspects of journeys, while leaving some things uninsured. Besides, each travel insurance package has limitations and exceptions. This article will cover both of these aspects, as well as you will get to know the history of journey insurance and how to pick a good travel insurance company.
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History of Travel Insurance
James Batterson, an American builder, designer and entrepreneur, founded the first travel insurance company in 1863. The company was called Travelers Insurance Company and appeared to be the first travel company to offer this kind of services. At that time, the insurance sold to clients covered theft and other casualty insurance. The insurance products of that company had been purchased mostly by the upper class and upper-mid class, which means that the travel insurance was fairly expensive and only quite rich, wealthy people could afford it. On the other hand, it was easier to pay a decent sum of money and head to the destination than bearing all the risks, which had been significant at that time. The company fully covered all the costs its clients had to bear due to theft or any other unpredicted circumstances.
An important mileage in the development of travel insurances occurred at the beginning of the 20th century. The form of the 19th-century’s insurance did not cover any costs of medical treatment or other health issues a person might experience during his/her journey. Later on, some trip insurance packages started also to cover the costs of cancelled flights, missed hotel reservations, and other costs associated with travel. Popularization of airplanes as a means of transfers made travel insurances to be in an even bigger demand from the side of travelers.
Over the last several decades, the coverage of travel insurances has rapidly expanded. While the acts of war and terrorism were once an exclusion, they are covered by the majority of the trip insurance packages at the present time. Many countries started to require travel insurance if one wishes to visit them. An abundance of travel insurance options – such as multi-trip insurance coverage – allows tourists to find the best deals and save their money. Considering that the present-day travel insurance covers many aspects that couldn’t be covered before (such as flight cancellation, loss of baggage, ransom, and many other unexpected circumstances), tourists may relish in an enjoyable trip and skip their worries about some insignificant things.
Types of Travel Insurance
Taking into account that clients of insurance companies want to be able to choose what to insure among different aspects of travelling, there are different types of trip insurance. Besides, such an ability of selection allows the tourists not to overpay for the services they don’t need. And those tourists who might need all aspects of their travels to be insured can take advantage of the full travel insurance packages, which are frequently offered by insurance companies with great discounts. So, here are 5 common types of travel insurance:
Medical insurance. Medical insurance is one of the key travel insurance types, which is often required by various countries for entering them (especially in regards to the citizens of the third-world countries). If you are living in the European Union and visiting another EU country, the chances are that your health insurance covers treatment in another EU country. But if you are going to visit any other country, we recommend you to check the policy of your insurance company – typically, health insurance companies don’t provide international medical treatment.
Flight cancellation travel insurance helps you to save either your trip or money
While many other types of travel insurance might be not as much needed, medical insurance comes as a priority. And even if you are not obliged to have it for a visiting a country, you should think about the risks of getting injured – even a slippery cobblestone might turn out to be a bad one for you. Therefore, it would be wise to stick to the thinking that your health is worth those investments (besides, it will turn out to be much more expensive to get healed on the site).
Medical evacuation. Planning to climb mountains in the remote regions of the Alps or relish in the trekking activity in Nepal? In case of visiting a remote place or region without necessary medical facilities, you would definitely need to have an insurance that covers medical evacuation. Trekking on high-altitude plateaus and climbing are the bright examples of a situation when you might need medical evacuation – even mountain disease might lead to a death (if a person is not evacuated in time), to say nothing about fractures, frostbite, and other kinds of injuries. An evacuation that is not covered by your travel insurance may cost up to $100,000, so purchasing a trip insurance package that covers medical evacuation is a must thing to do before heading to remote regions.
Trip interruption or cancellation. There are myriads of reasons that might cause an interruption in your oncoming journey or the overall cancellation of it. If you don’t want to lose the whole amount of money you have invested in your journey, you should definitely purchase a travel insurance that covers cancellation and interruption of your trip. Common causes of trip interruption and cancellation include instability in a country of destination, natural disasters, sicknesses or deaths of family members, or sicknesses of travelers. Before purchasing a travel insurance package that covers trip cancellation and/or interruption, you should carefully read the conditions of paying out the compensation and how you should file for a compensation.
Flight cancellation. Many tourists are quite “time-sensitive,” especially when they go on short journeys (up to a week). In such a case, a cancelled flight might be anything but ruining the planned trip. If your trip insurance package covers flight cancellation, then the insurance company will cover the costs of the tickets and all other expenses that arise from the flight cancellation. Though, you should be aware that insurance companies typically cover flight cancellations on the per-ticket basis, so make sure to insure each stage (ticket) of your journey.
Lost checked luggage. Airline companies state that it is far safer to keep precious or expensive things in the section of checked baggage. However, the occurrences when airline companies lose the luggage of their customers are not rare, and it turns out quite difficult to prove that you are right. So in case of bringing jewelry, musical instruments, sport equipment, or other valuable and/or expensive items aboard, it would be safer to insure your checked luggage. If some item turns out to be missing, the insurance company of yours would pay you the compensation. But keep in mind that it is going about the checked luggage – the inside of the bags you take along with you aboard is not covered!
What You Need to Know About Your Travel Insurance
Apart from the fact that there are different types of trip insurance, there are also several other aspects you should be aware of. This section of our article gives you an insight about how to save your money when purchasing a travel insurance and which special packages you may purchase as well as what they cover.
- Multiple cover. If you are travelling with your family, it is very likely that all your family members need the same trip insurance package. Then, purchasing a travel insurance with a multiple cover (i.e. cover of two or more people) would be a nice option, as it will definitely turn out to be much cheaper than if you decide a single-cover trip insurance for every your family member. There are travel insurance companies that allow multiple-cover insurances for tourists while enabling them to travel independently from each other, but it is quite a tough task to find a company that offers such packages.
- Multi–trip travel insurance. If you are the type of person who frequently travels to various countries and regions, then a multi-trip insurance may stand in good stead for you. Indeed, the price of such an insurance is far bigger than the price of a typical one-time travel insurance. It is pretty easy to calculate whether it is worth to purchase a multi-trip insurance: if you travel at least 3-4 times per year overseas, then the chances are that it is better to purchase a multi-trip insurance. However, keep in mind that each multi-trip insurance has a limit on length of every travel you undertake and is typically issued for a calendar year. Besides, you can save your money on purchasing a multi-trip insurance for a certain region only, not worldwide – that would be pretty suitable if travel to one region (Europe, for example).
- Extra coverage of your travel insurance. Be sure to check whether the policy of your travel insurance company provides extra coverage (typically, around 2,500 Euro) in case of an airline company’s financial failure or any other travel enterprise’s. If your trip insurance includes extra coverage, then you might avoid many unnecessary woes. Such a type of trip insurance, for example, will cover all the losses, if an airline company (that should have transferred you) goes bankrupt and you can’t get accommodated in the hotel you have booked before. In that case, all the losses (but not more than the limit of the extra cover) will be covered by your insurance, including the cost of accommodation at hotel and other expenses, arising from the cancelled flight.
- Typical limits of travel insurance. Indeed, limits of travel insurances typically vary between travel companies, but not significantly. Yet, be sure to check the policy of your insurance company and the limits, applicable to your insurance. Don’t be confused by the figures as well – the emergency medical cover sum is, indeed, astonishing, but it is typically stated for showing off. The highest claim ever was equal to 2 million Euro. Overall, the average travel insurance limits are the following:
Personal liabilities: 2 million Euro
Missed departure: 500 Euro
Checked baggage: 1,500 Euro
Emergency medical cover: 5 million Euro
Trip cancellation: 2,500 Euro.
- Undertaking activities. Going to another country doesn’t necessarily mean that you will be just visiting museums, going on sightseeing tours, and drinking in numerous pubs and restaurants. Perhaps, almost every person wants to include a sort of activity in their tours, such as surfing, trekking, sailing, and other sport activities. The majority of travel insurances don’t include various activities in their basic insurance packages, so you have to add the activities you are likely to undertake to your insurance package and pay additionally for them. Such activities are typically not covered by the standard travel insurance packages: if you fall down from a camel during your camel ride and get injured (don’t laugh, camel riding is a popular activity) without having it covered by your travel insurance, you will have to pay for the treatment on your own.
- Sport in winter. If you are a fancier of active leisure in the winter and can’t miss to spend a winter season in a remote destination, then you should check whether your travel insurance covers treatment of traumas received while undertaking winter sport activities. When checking the section of winter sport in your travel insurance, there are several aspects to pay attention to. First of all, the majority of insurance companies demand from its clients to wear helmets when undertaking sport activities – otherwise, you may be refused in paying the compensation out. Also, check where the policy of your insurance allows you to undertake sport activities and whether you are obliged to have a guide with you. If the insurance company demands from you to lock your skis while having a dinner or leaving them elsewhere, you can be sure that such a cover is useless. And the last point is checking whether the activities in snow parks are covered by your insurance.
A Step-by-Step Guide to Choosing a Right Travel Insurance
If you are planning to head to another country anytime soon, it would be reasonable to dedicate enough time for selecting the right type of travel insurance – and this is especially needed for people who will undertake various activities! Tackling this issue seriously is necessary in order not to get frustrated and cover all the losses on one’s own later.
It would be cheaper to buy a travel insurance that includes medical evacuation than paying the full price of it
The entire process of travel insurance selection can be broken up into three parts: finding an insurance policy that suits you, checking the terms and conditions of the insurance, and comparing the policies of different insurance companies. Just follow the following guidelines step by step:
- Finding an insurance policy that suits you:
- Make up your mind regarding what type of travel insurance policy you need from the above given types. There are also policies that include accidental death coverage, allowing you to insure your life for dismemberment or death (three main accidental death insurance policies include common carrier, air flight, and general accidental death).
- Estimate your risks, which will help you to determine what things are worth to be covered and what things will be paid for nothing. This stage actually allows you to get insured for the things you need without overpaying for something you don’t have a need in. Typically, you can add or skip such coverage types like hurricane and storm conditions, rental car insurance, life insurance, terrorism, cancelled (missed/delayed) flights, and loss or delay of your baggage.
- Call your current insurance agent in your home country and find out whether your health insurance covers travels abroad (the chances are that it does not cover travel-related expenses, but we suggest you to double-check!). Calling the insurance agent can help make it clear about what is already covered and what you still need to cover. It also helps you avoid any misunderstandings.
- The next stage is actually checking whether the insurance policy suits you overall. Many companies (including tour operators, travel insurers, general insurance companies, and banks) provide the services of travel insurance, yet sometimes it appears to be fairly difficult to comprehend anything in the thicket of vague terms. At this point, consider consulting an insurance agent, which makes it easier for clients to understand the overall specifics of insurance and determine what is really covered by insurance and under which conditions.
- Once you have completed the previous stages, ensure that the company where you want to purchase your travel insurance is a reputable, reliable one. Check whether it has a good reputation and whether there are disputed claims as well as negative reviews about this company, whether it is internationally represented, and whether it has a licensed ID/license number (check it as well).
- Checking the terms and conditions of your travel insurance:
- Make sure that the travel insurance covers the country you are going to visit. Keep in mind that it is difficult to find a travel insurance for the country, about which there are political or medical official warnings.
- The already existing conditions of yours may not be covered by the insurance policy, so make sure that all your health conditions are covered before heading to your destination.
- Read carefully the refund policy in the contract and make sure that you understand under which conditions the refunds are made. Research about how long it takes for the company to process your claims and what exactly will be refunded.
- Consider purchasing cancellation waivers, as they will help you to save a big share (if not all) of the money you have invested in your trip that has been cancelled. Typically, cancellation waivers are sold for a fee and you can apply for reimbursement up to 24 hours before embarking on your travel.
- Comparing the policies of different insurance companies:
- In the first place, look for different travel insurance options. If you are offered a travel insurance from a travel agency or tour operator, it would be wise to look around for other options. Two reasons for that: it may be difficult to get a reimbursement from such an insurer and the insurance policy might not cover the activities you need. Besides, the price might be higher as well.
- Compile a spreadsheet and break it up into the following sections: company’s name, the cost of the travel insurance, type of the insurance policy, coverage, and whether the insurance covers pre-existing conditions. Compare the policies.
- Calculate the costs of your travel insurance in the percentage from the overall journey cost. It must not exceed 5-7% of the trip’s cost in normal cases and 7-10% with extra types of coverage (emergency medical coverage or terrorism).
- Get newspapers and read reviews of insurance companies and their policies. Utilize websites and consumer companies for the same purpose as well.
- Use online services for comparing insurance policies (just google “compare travel insurance”) and make up your mind in regards to what travel insurance you want to pick.
Takeaway: Tips for Getting the Travel Insurance You Need
Travel insurance can help you in dealing with delayed flights
At the end of this article, there are a couple of tips that will help you make a better choice regarding the travel insurance:
- Don’t trust what the agent tells you, but rather trust to what is written in the documents. Make sure you have a clear understanding of what is covered by the insurance.
- Keep in mind that it rarely turns out the cheapest policy is also the best one – don’t try to save too much on your travel insurance!
- Don’t forget to write the helpline phone numbers of your insurance company or/and add them into your phone contact list.
- Purchase a travel insurance at least a few weeks in advance.
- The majority of travel insurance policies don’t cover pre-existing conditions (like diabetes), so make sure that you have picked the right package.