As we start 2017, most individuals and families have at least one big trip planned for the New Year. Whether you are making these plans independently or through a travel agent, you will likely be asked if you would like to purchase travel insurance when you make your air fair, hotel or rental car payment.
What does this type of insurance cover, and how do you know if travel insurance is right for you?
The first part of this question is straightforward, in that travel insurance can cover almost every facet of your trip. This could be the cost of cancelling the trip, trip interruptions, trip delays, lost or delayed baggage, medical costs and medical evacuation during your visit.
The second part is more complicated. The majority of travel providers are paid a commission for the volume of travel insurance they sell. For this reason, it is especially important to consider whether you need travel insurance before making a purchase.
Who Needs Travel Insurance Most
There are three situations which should make every traveler think twice about getting travel insurance.
1) You are concerned about overseas medical expenses
Before any trip out of the country, it is critical to check with your existing health care provider to see if medical expenses in a foreign country are covered under your current plan. Even if your health plan does provide foreign coverage, read the fine print and understand the limitations on this coverage. Many plans will pay for care in specific hospitals, doctor offices or “in-network” health care providers. When traveling to a foreign country, especially the developing world, these “in-network” providers may be hours, or days, away.
Travel insurance can cover the cost of medical care at any care provider in a foreign country and some plans will even cover the cost of bringing you or your remains home. Keep in mind, the vast majority of catastrophic accidents which happen to travelers are not the result of crime or terrorism – they are the result of traffic accidents and other “everyday” mishaps. Don’t under estimate the health risks you face while traveling, even when traveling to countries you deem safe and secure.
2) You have significant costs built in to your trip
If you intend to fly to foreign country and pay for expenses out-of-pocket, there is little reason to have travel insurance. However, if you are traveling to Europe to enjoy a week-long cruise in the Mediterranean, things are much different. You have significant costs built into the cruise and a missed air plane, train connection or weather delay can result in you arriving a day late and being left at port. Travel insurance can compensate you for missing the cruise when risk associated with travel come up. This is just one example, and travel insurance should be considered for any trip with large prepaid expenses.
3) You are traveling with expensive clothing or equipment
Most of us travel with several hundred dollars worth of clothing in a suitcase. If you are traveling overseas to film a documentary, you may have several thousand dollars worth of video equipment in your luggage. For travel that are bringing extremely expensive, or irreplaceable, items in their luggage, travel insurance can be priceless. Travelers insurance can cover the cost of lost, stolen, or damaged goods within your luggage as you make your way to and from your destination.
How Valuable Is Trip Insurance?
The value of any travel insurance coverage is completely dependent on how expensive your trip is, and what type of coverage you require while overseas. For a short trip to Korea on business, it’s probably not needed. Read our complete cost/benefit analysis of travel insurance to understand the average cost of value of coverage.
Making the Purchase
Travel insurance is big business and very popular in Singapore. According to Google Trends, Singapore ranks as the number one country in the world for web searches related to travel insurance. If you are looking to buy insurance for an upcoming trip, look at our review of the best travel insurance in Singapore. Sneak preview: Allianz Global Assistance Gold may be the right option.
Like any form of insurance, it is critical to understand the risks associated with your trip before making the purchase. If you do elect to purchase travel insurance, it is critical that you understand what IS and IS NOT covered under your plan. Ask “what if” questions to your traveler provider before signing the dotted line. These may include:
- What happens if weather delays my flight, will I be compensated for my cruise?
- If I get into a car accident, are my medical expenses covered regardless of where I receive treatment?
- What if I notice a camera lens was damaged on my return flight, how long do I have to make a claim?
By asking these types of questions, you will be making an informed decision about your next travel insurance purchase.