Even though it’s only the beginning of the year, you're likely already planning your 2019 vacations. If you plan on traveling at all, you should consider getting travel insurance to cover your trips. Travel often involves a lot of moving parts, and any disruptions can cause major financial losses.
Travel insurance is the move to make when you can’t afford to lose money if something goes wrong. You can purchase an annual policy to provide year-round coverage or purchase a limited policy to cover a single trip (which costs between 4-8% of the total cost of your trip).
Either way, it’s a worthwhile investment — here are the three big reasons why you need to get travel insurance to protect your trips this year.
1. To cover nonrefundable expenses when you cancel a trip
No matter how well you plan ahead, unexpected things happen. If you end up having to cancel your trip due to a change in plans, you may not be able to recover all your prepaid and nonrefundable trip payments like flights and hotel reservations.
Trip cancellation insurance will cover nonrefundable losses that result from a covered reason, such as injury, illness or death of a traveler, severe weather, jury duty that can’t be postponed or the financial insolvency of a travel provider. If you need to cancel for another reason, there there are more expensive options available.
“Trip cancellation insurance is only necessary when you have made non-refundable pre-payments for your trip, like a non-refundable airfare or hotel room. To avoid the fine print of what is and isn’t considered an acceptable reason for cancellation, you may want to look into 'cancel for any reason' insurance, although it may be more costly,” said Grace Henes, editor at TravelPirates.
Remember, the exact coverage of your travel insurance depends on the specific policy. There are policies available that include all or some of the coverage of your trip.
You may need to provide proof of your covered reason for cancelling the trip. You may also be expected to pursue refunds from the original travel providers and provide documentation that proves you could not secure a refund when you submit a travel cancellation claim.
2. To cover losses experienced while traveling
Travel insurance can also help you recover from other common losses that occur during your travels. There are many types of coverage to help protect you during your trip:
- Trip delay insurance: This will reimburse expenses incurred during covered travel delays. For example, if your flight is delayed overnight due to severe weather, trip delay insurance can reimburse you for lodging expenses.
- Baggage delay insurance: This covers the cost of necessities (think toiletries, clothes and other essentials) when your baggage is delayed beyond a certain amount of time.
- Lost luggage insurance: This reimburses you for losses when your luggage is lost entirely — though there are exclusions.
3. To provide health coverage and emergency aid
In the case of a medical emergency, your health insurance plan might not be sufficient — many policies limit the types of treatment covered while traveling abroad, or only provide partial coverage. If you need to see a doctor while traveling, you might be on the hook for those expenses.
Travel insurance policies can be a literal lifesaver in these situations. Most comprehensive policies offer the option of covering illnesses or medical evacuation, or separate travel health insurance can be purchased to cover any medical emergencies. Henes recommends purchasing additional travel health insurance if you are planning on “adventure travel,” like mountain-climbing.
Using your credit card to get travel insurance
Many credit card issuers already provide some level of travel insurance coverage, especially customers with travel rewards cards. However, there are limitations and exclusions, and not every card issuer provides the same level of coverage. Check your credit card statement benefits to see what — if any — travel coverage you have.
You may also want to stack third-party travel insurance on top of your card’s existing policies. For example, if your card has cancellation and delay insurance, but no medical coverage, you could purchase a travel health insurance policy on your own.
Remember, you generally have to put travel purchases on your credit card to receive the benefit of the card’s insurance. Want to know how to use your credit card’s travel insurance? Here’s our guide.