A Short Guide to Travel Insurance

An overview of the four main categories of travel insurance, what is covered and when you might need it.

In general terms, travel insurance protects all holiday costs against adverse events such as cancellation and interruption and also reimburses medical expenses, the loss or damage of property and transit delays. Travellers are compensated if they have to cancel or interrupt their travel, they will also be covered should they need emergency medical treatment, medical evacuation and other situations.

Many millions of travellers and holiday makers every year purchase some form of travel insurance, but few people know really what it is and how it can be defined. If you know what is included, and what is not you will be able to make the most of your protection.

There are four main categories of travel insurance:

Travel Insurance for Delays and Cancellations

Delay of Travel Insurance: This reimburses travellers for hotel, food or clothing expenses in the event of a flight delay. Some plans also cover costs associated with catching up with a cruise should another delay cause the traveller to miss embarkation.

Cancellation of Travel Insurance: Reimbursement comes into effect if travellers have booked and paid for a holiday, but are unable to embark because of personal illness or injury, death (of the individual or of a family member), adverse weather conditions, airline strikes, terrorism, bankruptcy, sudden unemployment, jury duty or by sustaining serious damage to their home causing it to be uninhabitable due to fire or flooding.

Interruption of Travel Insurance: Insurance companies pay money to policy holders abroad if they have to cut short their trip due to illness, death (of the traveller or a family member), terrorism, weather, airline strikes, bankruptcy, sudden unemployment, and other adverse conditions which mean that, due to events outside the control of the holiday-maker, a trip has to be curtailed.

Health and Medical Travel Insurance

Medical Evacuation Travel Insurance: This provides emergency transportation to either a local hospital in the event that the traveller is unable to get there by themselves or back to a hospital near the traveller’s home town. If family members are covered on the same policy they can travel back home also.

Medical and Health Insurance: This reimburses medical and emergency dental costs. Almost all travel insurance plans work by reimbursing the traveller after they have paid locally for treatment. Claims are usually paid within 7 – 10 days. Pre-existing conditions are covered by most policies if the policy is purchased within (at the most) 21 days from the date the traveller made the first payment or deposit.

Travel Insurance for: Loss or Damage of Personal Effects

Baggage Loss Travel Insurance – reimburses travellers for lost, stolen or damaged personal items. This coverage is usually restricted to the duration of the trip and not confined to baggage damaged or lost by the airline. There are two policy limits, total claim and per item maximum. Some policies also place limits on the type of items that can be claimed for – such as precious jewellery, laptops and sporting goods.

Rental Car Damage – Reimburses travellers for damage or loss to a rental vehicle. It is designed to allow the traveller to decline collision damage waiver (CDW) coverage offered by the car rental companies. Liability coverage should still be purchased through the car rental company. Rental Car Damage coverage is also often included with the credit card used to pay for the car rental which is often matches the coverage provided in the policy.

Travel Assistance Services – Provides a 24-hour collect telephone advice and assistance service to travellers. This service can be used anytime a traveller needs advice. Make sure you don’t leave home without it.

Travelers Death Insurance

Accidental Death Insurance – covers death or dismemberment at any time of your trip. Usually provides the lowest amount of coverage due to a higher risk.

Air Flight Accident Insurance – this covers death or dismemberment during an air flight only. Usually provides the highest amount of coverage due to fairly low likelihood of this occurring.

Common Carrier Travel Insurance – Covers death or dismemberment while travelling on public transport such as a plane, ferry, train bus or taxi.

Travel Insurance is the one product in the modern risk averse, insurance-saturated world that really is essential. You will not regret taking it out, because not being insured for your travel mishaps is a source of huge regret for far too many holiday-makers every year.