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Do I Need Travel Insurance?

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Do I Need Travel Insurance?
Travel bag with insurance tag and tourist accessories

Insurance Basics

The insurance menu includes five main courses: trip cancellation and interruption, medical, evacuation, baggage, and flight insurance. Supplemental policies can be added to cover specific concerns, such as identity theft or political evacuation. The various types are usually sold in some combination — rather than buying only baggage, medical, or cancellation insurance, you’ll usually purchase a package that includes most or all of them. As you weigh options, consider the relative importance to you of each type of coverage. Is your main concern getting your money back for a canceled trip or lost baggage? Treatment or evacuation if you fall ill during your travels? Is there a possibility that your job or family situation will impact future plans?

“Comprehensive insurance” covers all of the above (plus expenses incurred if your trip is delayed, if you miss your flight, or if your tour company changes your itinerary). Companies such as Travelex and Travel Guard offer comprehensive packages that serve as your primary coverage; they’ll take care of your expenses regardless of what other insurance you might have (for instance, if you have health insurance through your job). That means they pay first and don’t ask questions about your other insurance. This can be a real plus if you want to avoid out-of-pocket expenses.

Insurance prices can vary widely. Most standard insurance covering emergency health care and cancellations runs about 5–10 percent of the total trip. A policy that covers nonemergency cancellations can cost from 20 to 50 percent of the trip. Age is one of the biggest factors affecting the price: Rates go up dramatically for every decade over 50, while coverage is generally inexpensive or even free for children (under 18).

Travel agents recommend that you get travel insurance (because they get a commission when you buy it, and because they can be held liable for your losses if they don’t explain insurance options to you). While travel agents can give you information and advice, they are not insurance agents — always direct any specific questions to the insurance provider.

Note that some travel insurance, especially trip-cancellation coverage, is reimbursement-only: You’ll pay out-of-pocket for your expenses, then submit the paperwork to your insurer to recoup your money. (If your trip gets canceled, don’t expect insurers to refund policy premiums.) With medical coverage, you may be able to arrange to have expensive hospital or doctor bills paid directly. Either way, if you have a problem, it’s wise to contact your insurance company immediately to ask them how to proceed. Many major insurance companies are accessible by phone 24 hours a day — handy if you have problems in distant time zones.

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