Edward Hasbrouck has traveled around the world twice, visited all 50 states of the USA and more than 30 other countries. He is considered a foremost expert on international travel, airfare, and online travel bookings. In addition to being a consumer advocate, public speaker, and investigative journalist, Edward Hasbrouck has also authored the acclaimed Practical Nomad series of travel guides.
Travel Insurance Coverage
Travelers can buy insurance to cover a variety of different risks related to traveling, and different "travel insurance" policies cover very different things. That's why it's so important to read the find print.
Travel insurance policies can include at least five types of coverage, intended for different types of travelers and trips:
- Comprehensive travel medical insurance is for people who don't have any other medical insurance, even at home. Since most people who can afford it have health care coverage in their home country, often through their employer, comprehensive travel medical insurance is mainly of interest to long-term travelers who've left their jobs and lost their insurance coverage at home, or to those living and working outside their country of citizenship or permanent residence.
- Emergency travel medical insurance is for people who have medical coverage at home, but whose health plan at home doesn't cover them while they are traveling. Emergency travel medical insurance only covers emergency services abroad. Once you get home, you're on your own (or presumably, back under your regular home coverage) for any necessary follow-up treatment or continuing care. Most health insurance plans and health maintenance organizations in the USA include their own provisions for emergency care while abroad, at least for trips of less than 30 days. Check with your current insurer or HMO before you waste money on an emergency travel medical plan that duplicates your existing coverage.
- Medical evacuation (medevac) insurance covers the cost of an air ambulance, attending physician and nurse, etc. if you are so badly injured, or become so ill, that you can't come home (or get to a suitable medical facility) on a scheduled commercial passenger flight. Medical evacuations can cost tens of thousands of dollars, but are rarely necessary. Even very badly injured travelers usually can come home on regular flights after no more than a couple of weeks of emergency treatment and stabilization abroad. Some of the activities most likely to lead to a need for medical evacuation, such as scuba diving and extreme sports, are often excluded from medevac coverage. Read the fine print.
- Trip cancellation and interruption insurance covers the cancellation or refund penalties and the cost of getting home if you have to cancel your trip, or cut it short, for specified reasons. The covered reasons vary (read the fine print), but typically include injury or illness to you, a traveling companion, or a member of your immediate family. War and terrorism may or may not be included, or may be covered only at additional charge.
- Supplier default insurance covers any money you lose because of the bankruptcy of an airline, cruise line, tour operator, or other provider of travel services. Supplier default coverage has been drastically cut back since 11 September 2001. Some travel insurance companies no longer offer it at all, while others pick and choose which travel suppliers they will insure. Read the fine print.
Shopping for Travel Insurance
Some travel agencies and travel suppliers offer travel insurance as an option along with the travel services you buy from them. Some regular insurance agents handle travel insurance, especially long-term comprehensive travel medical insurance. If you're traveling for six months or more, or if you plan to travel regularly throughout the year, it may be cheaper to include travel coverage with your regular health coverage. Check with your regular insurance agent to see what they can offer.
You can also get travel insurance from specialists in the field. These include travel insurance companies, direct providers of medevac and travel emergency services, and independent travel insurance brokers and agencies that can help you compare the offerings of different insurers.
Be sure to get more than one quote, but also compare the coverage in the fine print, not just the price. Because the coverage varies so much from one travel insurance company and policy to another, it's almost impossible to get multiple price quotes for identical coverage. The price differences between options typically have more to do with what they cover.
Do You Need Travel Insurance?
Travel insurance can be expensive. Should you buy it or not? The answer depends on what specific types of coverage you are talking about. As with most insurance, it's most valuable for potential catastrophic costs, and least valuable for things that you can afford to self-insure.
Insurance for lost or stolen baggage, for example, usually doesn't cover high-value items (electronics, jewelry, etc.), and is rarely worthwhile.
If you already have medical insurance, it probably covers you medical expenses while traveling almost as well as when you are home, except for medical evacuation. Duplicate insurance is a waste of money, and can even complicate making a claim. So if you are mainly concerned with medical coverage, and already have medical insurance or belong to an HMO, you may only need a standalone medical evacuation policy.
If you don't have any medical insurance, or it doesn't cover you while traveling, you may want catastrophic major-medical coverage while traveling. Get the highest deductible you can afford to self-insure. It's more valuable to have a high total claim limit (in case you get in a car crash and require extensive treatment) than to have a low deductible.
Whether trip cancellation and interruption insurance is a good deal depends on what it covers and how much it costs. It's more likely to be a good deal if you are making large nonrefundable payments long in advance of your trip. In general, if you can get it without having it bundled with too much other expensive coverage you don't need (such as medical coverage that duplicates your existing medical insurance) it's a good idea. But it's very hard to find unbundled.
When to Buy
Many policies are only available if you buy them at the same time you pay for your tickets or other trip costs, or limit coverage (e.g. for pre- existing conditions) if you buy travel insurance later. So research travel insurance *before* you buy your tickets or put down a deposit on a tour or cruise.