Buying travel insurance before an expensive trip can provide extra peace of mind as its benefits are usually more extensive than credit card protection benefits. However, it is essential to know what travel insurance covers to avoid disappointment with exclusions. Here are some factors you should be aware of.
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Cancellation and interruption of travel
Trip cancellation and interruption benefits are the basis of travel insurance policies. May refund non-refundable travel purchases and increased travel expenses for the rescheduled travel portion.
You’ll want to review the covered grounds, coverage limits, and policy terms to purchase an adequate policy. It is important to remember that a delayed or canceled trip does not automatically guarantee that you are entitled to a travel insurance claim.
Commonly covered reasons include:
- Flight delays and cancellations
- A storm, natural disaster or bad weather
- An insured traveler or family member experiences illness or injury
- Legal separation or divorce
- Forced labor or work-related displacement
- Dismissal
- Military deployment, jury duty, or a required court appearance
- Bankruptcy or financial failure of a carrier
- Terrorist events within 30 days from the date of departure to the destination
A waiting period may apply in certain circumstances to prevent insurance fraud. Two examples are layoffs by employers and bankruptcies of operators.
Medical illness and injury may also attract additional scrutiny to rule out pre-existing conditions.
The first step is to contact the operator or host to see if you can get a refund, delay compensation and a rescheduled trip. Once you have reached the travel provider, you can submit a claim for any outstanding refund.
Coverage limits for a barebones policy are usually up to $10,000 or the cost of your trip,
whichever is lower. Upgrading to premium plans offers more generous limits.
Does travel insurance cover hurricanes?
Travel insurance can cover hurricanes if you purchase coverage before the storm is named.
Medical emergency
Medical travel insurance coverage is another compelling reason to purchase a stand-alone policy. Many new medical and dental incidents during travel may be eligible.
Pre-existing conditions and injuries resulting from high-risk activities are usually disclosed unless you purchase separate coverage.
You may also consider purchasing emergency evacuation coverage.
Emergency medical and evacuation may be most valuable for international travel as personal medical insurance benefits typically only apply within the United States and territories.
Covid-19 coverage
Most travel insurance policies now offer Covid-19 cover which can reimburse you for your trip if you test positive before you leave. In addition, this policy option can reimburse the costs of medical treatment and quarantine during travel.
You may also see this listed as epidemic coverage and may cover other unnamed medical events that may occur. Researching the latest travel restrictions can help determine your coverage options.
Baggage loss and delay
Baggage insurance can reimburse the value of your lost, damaged or stolen items. This coverage may apply to hand baggage and checked baggage.
A policy with baggage delay benefits can help pay for necessities like clothing and toiletries while you’re waiting to claim your baggage. However, a lag period of 8 to 12 hours is usually necessary before this benefit begins.
Accidental death and dismemberment
You or your beneficiaries may receive accidental death and dismemberment (AD&D) compensation.
Optional travel insurance coverage
Some extras may also be worth the cost for extensive coverage:
- Cancel for any reason: You can usually get a full refund when you cancel at least two days before departure.
- Pre-existing medical conditions: Get treatment for certain illnesses and injuries. Medical tourism and pregnancy may have exceptions.
- Car rental coverage: Reimburses losses due to theft or collision. This benefit is standard with most credit cards, but may offer additional coverage or apply in excluded countries.
- Sports: May reimburse rental, loss and delay of prepaid equipment. It can also cover medical incidents from covered activities.
summary
Travel insurance offers the greatest benefits for expensive trips or when traveling outside the United States. Trip cancellation and medical cover benefits are straightforward for most trips. However, reading the exclusions carefully is vital if you have a complex situation, such as pre-existing conditions or other travel uncertainties.
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