I never thought about getting travel insurance until a few community members (including my wife) asked me about it. I have good medical insurance through work and have trip delay/cancellation insurance through my credit card, so felt I was covered. Even an analytical traveler dreads researching insurance, so I never actually evaluated my coverage. I pride myself on being prepared for medical and emergency situations, and have never had a true emergency in all of my travels. With that said, I’ve witnessed some unpleasant travel emergencies where travel insurance would certainly have come in handy for the impacted individuals.
I’m not saying you need travel insurance, I’m saying an analytical traveler should make an informed decision. Understand what you’re covered for under your credit cards and standard insurance, assess potential risks, then decide if you need additional insurance. For many, it is a small price to pay for peace of mind.
I’m not going to advise you on whether you need travel insurance, but provide a method to make that determination yourself.
- Determine potential and worst case scenario risks
- Understand what personal insurance covers
- Understand what credit card benefits cover
- Determine coverage gaps
- Understand what gaps can be covered by travel insurance
- Assess whether cost to cover gaps is worth it
- Make decision to insure vs. cover out-of-pocket
Personal Experience Assessment
Your first step is to evaluate past trips and assess scenarios that could have (or did) turn into emergencies. Here are a few examples from my travels of situations that could have gone sideways.
- Faulty scuba gear in Papua New Guinea
- Rusty shackles and frayed lines parasailing in Mexico
- Ride on back of scooter (behind a kid) during torrential rains in Cambodia
- Earthquake while on 20th floor of hotel in Japan
- Every street crossing or tuk-tuk ride in Southeast Asia
None of these did go sideways, and I’ve escaped unscathed from many adventures without needing travel insurance. Does this mean I didn’t need it? I have homeowners insurance, but it’s unlikely my house will ever burn down. But what if it did? My approach to insurance is to insure what you can’t reasonably self-insure. I can self-insure (cover out-of-pocket) antibiotics for a bacterial infection in Thailand, but imagine the cost of getting an air evacuation out of the jungles of Papua New Guinea?
General Travel Risk Assessment
Insurable travel risks extend beyond getting sick overseas. I have outlined some potential travel risks to consider, but you should assess your specific situation. Are you planning to lay on a beach sipping piña coladas (watch out for falling coconuts) or are you climbing Mount Everest? Think through likely risks and then worse case scenarios. Also, think of having to deal with these emergencies yourself in a strange land and different tongue.
Potential travel risks include:
- Need to cancel a booked trip due to illness, work, etc.
- Need to return early from a trip due to an emergency back home
- Trip delayed or cancelled by airline / boat
- Lost or stolen belongings
- Medical / dental emergency outside your home country
- Incident while driving a vehicle (car, scooter, motorcycle)
- Accident from activity (scuba diving, zip lining, jet skis, parasailing)
- Natural disaster
- Civil unrest / terroism
Travel Insurance Wish List
After considering the potential travel risk scenarios, make your travel insurance wish list. What would it take to give you peace of mind when traveling? Here is my wish list of what I would like covered when I travel, whether from personal or travel-specific insurance.
- Ensure my family has the best possible care and support
- 24/7 phone support (in my own language)
- Coordination in finding best local hospital, air evac, flights, family notification
- Coverage for trip delay, cancellation, changes, lost luggage
- Coverage for theft (especially big items like laptop, phone, camera)
- Pays for high $ services rather than reimbursing
- Medical air evacuation
- Non-medical air evacuation- natural disasters (hurricanes, earthquakes, mudslides), civil unrest
- Coverage for vehicle rentals
- Coverage for “adventure” activities, i.e. diving, parasailing, zip-lining
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What Coverage Do You Already Have?
Your next task is to determine what coverage you already have through your personal insurance and credit cards. This is quite painful, to say the least, but you should know your coverage before you need it. As this will differ between countries, states, and plans, here are some general items to look for when reviewing your coverage.
- Does it provide out-of-country medical / dental coverage? Medicare typically does not provide out-of-country coverage.
- Do they have 24/7 phone support and coordinate medical arrangements? See if they have a different phone number to use when overseas.
- Does it cover medical air evacuations?
- What are your coverage limits?
- Is pre-authorization required?
- What are their requirements for reimbursement? My insurance requires a special claim form, medical records, bill written in English, and proof of payment.
Home Owners / Renters Insurance
- What coverage do you have for lost / stolen personal belongings when traveling?
- Do you have riders (extra coverage) for expensive items such as electronics, camera gear, or your wedding ring? Costs vary, but as a general guideline, expect to pay ~1% per $1,000 of items covered.
- Does your policy cover you when renting a vehicle abroad? Most U.S. policies will not cover you.
- What (if anything) is covered, and are there any restrictions?
- Umbrella policies typically provide coverage above and beyond standard policy limits.
- Are you covered for vehicle damage / injury to others when renting a vehicle abroad?
Credit Card Benefits
- Determine which cards provide the best coverage before booking. It’s hard to beat the Chase Sapphire Reserve.
- See if your card has trip delay/cancellation/interruption coverage.
- Confirm the limit for trip cancellation coverage compared to your trip cost.
- Check if your card covers baggage delay / loss.
- Are you covered when renting a vehicle abroad? Many credit cards offer great rental insurance.
- Some cards will even offer some emergency medical/dental benefits.
Insurance Gap Assessment
Now compare your travel insurance wishlist against your current coverage to understand where you have coverage gaps. It may not be as clear cut as the example I provided but should be obvious. If you have partial or limited coverage, you may want to put the coverage limits and exceptions in the cells rather than check marks.
Top Reasons to Get Insurance
Once you go through the exercise of understanding what you would like covered and what coverage you already have, you should be ready to make an informed decision. I don’t believe most people need travel insurance for every trip; however, there are many situations where travel insurance is a wise choice.
I would consider purchasing travel insurance in the following scenarios:
- Limited or no coverage from personal insurance
- Going to a remote location
- Adventure activities are in the mix
- Health concern for family member at home (may have to return unexpectedly)
- Have a health condition (make sure pre-existing is covered)
- Booking an expensive trip
- Going to a dangerous location
- Going to an emerging nation with limited medical care
- Just want peace of mind
How Much Does Travel Insurance Cost?
The cost of travel insurance is based on many factors. It’s actually surprisingly reasonable. The easiest way to check is to use a quote tool such as the below. Give it a try, it’s super easy. World Nomads is one of the big names in travel insurance and recommended by Lonely Planet. When you do your quote you will see the Standard Plan and the Explorer Plan. The Explorer plan has higher coverage limits, but the primary use is to cover more dangerous activities such as diving, bouldering, hang gliding, heli-skiing /boarding. The Explorer Plan also covers vehicle rental insurance.
Try Out the Quote Tool
How To Buy Travel Insurance?
If you’ve made it this far, you’re probably interested in how to actually purchase travel insurance. Travel insurance can be quoted and purchased instantly online using a credit card. Tools such as the above make it very simple. Some travel insurance companies (including World Nomads) let you purchase insurance even while on your trip. Before making your purchase make sure to understand what is and is not covered and compare how this aligns with your travel plans and potential risks.
Understand What’s Covered and What’s Not
As painful as it may be, review the entire policy. Prior to purchasing insurance, you can see the “certificate” which breaks out all of the coverage. At a minimum, email (so you have in writing) your questions to the insurance company. It’s also a good test of their responsiveness.
Here are a few areas to hone in on as you review and compare policies.
Summary of Benefits
There is typically a summary of benefits at the top that breaks down the primary areas of coverage and the dollar amounts.
Understand What is Excluded from Coverage
You’ll want to read the details of each section, but one to which to pay particular attention is the section which calls out what is not covered. It will be called something similar to, “General exclusions and limitations”.
Here are a few example exclusions I found in one travel policy.
Benefits are not payable for any loss due to, arising or resulting from:
- participating in bodily contact sports, skydiving or parachuting except parasailing, hang gliding, bungee cord jumping, extreme skiing, skiing outside marked trails or heli-skiing, spelunking or caving, or scuba diving if the depth exceeds 120 feet (40 meters) or if You are not certified to dive and a dive master is not present during the dive;
- being Intoxicated as defined herein, or under the influence of any controlled substance unless as administered or prescribed by a Legally Qualified Physician;
- mountaineering (engaging in the sport of scaling mountains generally requiring the use of picks, ropes, or other special equipment)
Do They Pay or Reimburse
I also suggest confirming whether they will pay upfront on your behalf for high ticket items such as air evacuation.
What Travel Insurance Company to Use
There are many travel insurance companies out there and I’m not even sure there is a best. Everyone’s needs are different, and coverage differs country to country and even state to state. Reviews are subjective but should be factored in. Ideally, you get a recommendation from someone you trust. I met World Nomads at TravelCon, and they are recommended by Lonely Planet and Nomadic Matt. I outline the benefits of World Nomads in my Travel Insurance Guide, but I recommend doing your own research.
I did review the insurance offered by airlines, as it was surprisingly inexpensive. The main deficiency I noticed was that it had a low coverage amount for air evacuation, which is a primary area I would like covered. I also don’t think I could trust the customer support of airline insurance!
Speaking of support, this is a major consideration. If an emergency happens, you want one number to call that you know will be answered and everything taken care of. While it’s difficult to assess how a company will respond until an emergency happens, I would look for support terms, such as the below, when reviewing policies.
- Save a copy of your policy locally and in the cloud
- Print and bring a copy of your policy
- Save emergency phone # and email address in your phone
- Understand what to do in event of an emergency
- Request / save all receipts and medical records
- When in doubt, contact your insurance provider
Many things can go wrong when traveling. I don’t want you to be paranoid, but I do want you to be prepared. Rather than hoping nothing goes wrong, do what’s in your power to mitigate. At the end of the day, it comes down to peace of mind. My peace of mind comes from incorporating travel safety into my travel planning.
Please leave any questions or comments below or feel free to contact me directly. Share your recommendations or experience with (or without) travel insurance so others in the community may learn.
Safe (and insured) travels!
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