You may need travel insurance on your next vacation. Here’s how to get it.
Every trip is different. So when Brian Carcich set out on an ambitious multi-country tour, he knew his travel insurance would have to keep up.
The policy needed to work everywhere and cover more than the essentials, such as trip interruptions and delays.
“For example, what happens if you need emergency medical care or hospitalization?” he wondered. “Credit card benefits help with some of this, but will only get you so far.”
So Carcich, a marketing executive from New York, did what many travelers do before their upcoming trips: he researched his travel insurance options to find the right plan. It’s a daunting but necessary exercise that you ignore at your own peril this summer, which may be the busiest one for travel in a generation.
And Carcich is glad he did, because it turns out he needed the insurance on more than one occasion. More on that in a minute.
Does your travel insurance cover your trip?
“Travelers want to make sure their travel insurance plan provides coverage for their specific trip,” says Bailey Foster, vice president of trip insurance at Trawick International. “There are trip cancellation plans with benefits specifically for when you are staying at a vacation rental like Airbnb or VRBO, plans that cover you if you are participating in a sport or other activity while traveling, and plans that work better for cruises. For international travel, it is essential that the plan provides emergency medical coverage, since healthcare plans do not always cover you once you leave your home country.”
That’s a lot to consider.
Summer trips come in all shapes and sizes. You could be taking a cruise or a road trip. You could stay in a vacation rental or a hotel. You could chill on the beach or go cave diving.
“There is no one-size-fits-all insurance policy,” says Terra Baykal, a senior marketing manager for World Nomads. “It’s important to think about the coverage that’s most important to you for your next trip, whether that is emergency medical, trip cancellation, baggage or something else.”
Do you need insurance for your trip?
Before shopping for insurance, you need to figure out if you need it.
“The first step should be to determine whether or not you will have prepaid trip costs that you want to protect in case of a trip cancellation, interruption, or delay,” explains Narendra Khatri, principal of Insubuy. “This may be the case for domestic or international trips of 30 days or less that involve flights and hotel rooms.”
If that’s the case, then you probably should consider travel insurance, he says. (I have more in my guide to travel insurance.)
Here are the types of coverage that should be on your insurance policy
No matter where you’re going, your travel insurance should have some basic coverages, say experts.
- Cancellation or trip interruption. Travel insurance can cover your trip costs if you have to cancel or interrupt your stay due to unforeseen circumstances, such as illness, injury, or a natural disaster.
- Damage to property. Insurance should cover lost, stolen, or damaged personal belongings, including lost luggage or property damaged when you rent a vacation home.
- Medical care. The policy should should cover major and minor medical issues, in addition to emergency assistance services such as emergency medical evacuation, medical repatriation, or emergency travel assistance. (You can supplement the coverage through Medjet, Global Rescue or COVAC Global.)
But shopping for the right policy isn’t easy, says Joe Cronin, president of International Citizens Insurance.
“When it comes to the different types of travel insurance, policies are not typically categorized by type of trip but rather by type of coverage,” he says. “It’s up to the customer to determine which policy best fits the needs of their trip.”
So when you start looking for insurance, you might see categories like travel medical insurance, trip cancellation insurance, cancel for any reason insurance, extreme sports travel medical insurance and annual travel insurance. What should you do?
What’s the best insurance by trip type?
A better approach, say experts, is to buy insurance based on the type of trip you’re taking. I asked Foster, the vice president at Trawick, to review the most popular types of trips. Here’s what she said.
For a cruise
Look for a comprehensive trip cancellation plan that includes missed connection coverage. That will provide benefits if you miss your cruise or tour departure because of a common carrier delay of three hours or more. It will also provide benefits for missed days of your cruise or tour, transportation expenses to rejoin your cruise or tour departure, and reimbursement for additional expenses you would incur during your delay. Of course, any respectable cruise insurance policy would also include medical care and emergency evacuation.
For a road trip
Standard auto insurance covers your vehicle if you are in an accident, of if your car is stolen or otherwise damaged. Travel insurance for road trips protects you and your investment in the trip. It could reimburse you if, for example, a car accident causes you to have to cut your trip short and cancel prepaid, nonrefundable event tickets, hotel stays, vacation rentals, or anything else associated with your trip. If you are renting a car, look for a plan with benefits for rental car damage that can reimburse you for the cost of repairs and any rental charges imposed by the rental company while the car is in the shop.
For a vacation rental
You want a plan that covers all travelers booked to stay at the vacation rental. The best travel insurance for a vacation rental covers a cancellation due to a sickness, injury, or death of a traveler or non-traveling family member. It also covers reimbursement if your accommodations are uninhabitable or inclement weather causes road closures. Trawick has a plan called Safe Travels Rental Plus that also provides reimbursement for unintentional damage to your accommodations.
For adventure
Most travel insurance plans exclude adventure activities. Make sure the specific activity—such as backcountry skiing or cave diving—is not excluded. Travel insurance companies have adventure travel-specific insurance plans that you should consider for activities like backcountry skiing or cave diving.
For an international trip
Here, health coverage is the most important consideration. Many health insurance plans, including Medicare, stop covering you or provide limited coverage when you leave your home country, so if you travel internationally without travel medical insurance, you could be stuck footing the bill if you have a medical emergency. In many countries, you have to pay your bill before being released from the hospital.
Foster says there are many options, including a build-your-own insurance plan that allows you to create a specialized insurance policy tailor-made for your trip.
“You can choose additional benefits to cover everything from baggage delay to emergency medical evacuation,” she adds.
Pro tips for choosing the best insurance plan
When you’re looking for the best travel insurance, you should match your itinerary to the best insurance company to cover the trip.
“When you’re shopping for a travel insurance and assistance services plan, the type of trip that you’re taking is going to impact the types of coverages and services that you’ll want to look for,” explains Chris Carnicelli, CEO of Generali Global Assistance.
Major travel insurance companies typically have a range of products that fit many types of trips. For example, Berkshire Hathaway Travel Protection (BHTP) offers a specialized policy for cruise passengers called WaveCare, which covers everything from trip delays to lost baggage and medical coverage.
“Every trip is unique,” says Carol Mueller, vice president of BHTP.
Don’t buy the first policy they offer you
That’s especially true for some types of vacations, such as cruises or tours. A cruise line may offer you a policy at the same time you book your cruise. “While there are many good ones, people with specific needs might want to research other insurance providers as well and choose the one that best suits your needs,” says Laura Heidt, insurance desk manager at Brownell Travel. For cruises, especially ones with a lot of nonrefundable elements, the policy should offer comprehensive benefits, most importantly trip cancellation, trip interruption, medical and medical evacuation, she says.
Prioritize your coverage
That’s the advice of PK Rao, CEO of Hop Travel. For many of his customers, medical care is the most important item “So we suggest our members build packages around medical coverage, and then layer on trip cancellation, baggage loss, or other extreme sports riders per their personal preference,” he says.
Consider “cancel for any reason” insurance
Now more than ever, you’ll need the coverage, according to Rajeev Shrivastava, CEO of VisitorsCoverage, an insurance marketplace. “The best course of action is to look for flexible and customizable insurance,” he says. Given the unpredictable nature of travel this summer, he recommends a policy with “cancel for any reason” coverage. It costs a significantly more (usually between 10 to 12 percent of the prepaid cost of your trip) but allows you to cancel your trip for any reason and receive a refund of between 50 and 75 percent of your prepaid, nonrefundable expenses.
You may need an annual policy
If your travel insurance costs are starting to add up because of all the trips you have planned, consider an annual policy. For example, many insurance companies offer annual medical plans. “These plans offer travel medical insurance coverage for unlimited trips in a year,” explains Lynn Pina, chief marketing officer at Geo Blue.
In the end, how much travel insurance you need — or whether you need it at all — comes down to one question.
“How much are you willing to risk losing in the event of an unexpected cancellation or emergency situation?” asks Daniel Durazo, a spokesman for Allianz Partners USA. “Consider what types of coverage you want and how much you’ve invested in the trip to choose a policy that best fits your needs.”
Which insurance is right for you?
So what happened to Carcich, the marketing executive on the around-the-world trip? He found an insurance policy that included robust medical coverage.
He made the right call. His husband got food poisoning in Bangkok. Then he had an allergic reaction to the antibiotics they gave him at a clinic, which landed him in the hospital. And then Carcich got sick — a severe case of strep throat.
“Everything was covered by the insurance,” he says. “Let me tell you, it was worth it.”
Figuring out which insurance is right for you may seem challenging, but if you’re headed anywhere this summer or anytime in the future, you’ll be glad you did.