Do I need travel insurance?
The first thing you must do is decide if you need insurance for your trip. Not everyone needs travel insurance.
The first step is to look at your trip to see if there are any increased risks that you might face. Some risks are larger than others. Here are some to consider:
- special trips where your investment would be painful for you to lose.
- medicare or medicaid recipients traveling outside the USA.
- travel to remote destinations that may have less than acceptable medical infrastructure.
- higher than average risk activities planned such as skiing or scuba diving.
- risks that aren't common in the USA, e.g., traffic on the left side of the road (it's ingrained in us to look to the right when crossing a road).
What type of financial losses will I be exposed to because of my trip?
Day in and day out we are all exposed to the risk of financial loss. But when we travel there may be some unique financial losses or risks that we normally don't anticipate. Here is a list of some financial losses that could happen while on a trip:
- emergency medical expenses.
- transportation expenses for medical evacuations if you are too sick or injured to travel as a normal passenger.
- preparation and shipment of a deceased traveler back home.
- loss of your trip investment you have to cancel the trip.
- loss of your unused trip investment if you have to interrupt your trip.
- additional transportation expense to return home if you have to curtail your trip.
- loss of your trip investment if your travel supplier goes bankrupt or defaults.
- additional living expenses if your trip is delayed.
- missed connections due to travel delays.
- loss of personal property and baggage or damage to them.
- emergency purchase of personal items because of baggage delays.
- liability for damage or injury caused by your actions;
- rental car damage.
- loss due to the death of a traveler.
Am I already covered?
The next thing is to determine gaps in your current insurance coverage. Here are some points to consider:
- does your permanent health insurance cover you while on your trip?
- do you have lower benefits or higher co-pays because you're out of network?
- medicare basically will not cover you while outside the USA.
- some Medigap plans (supplement to Medicare) don't cover outside the USA and others will but with a $250 deductible and 20% co-pays and a lifetime benefit of $50,000.
- medicaid also will not cover you outside the USA and in most cases, will not cover you outside your home state.
- do you have any other coverage that protects the value of your trip?
- does your credit card company provide trip investment coverage as part of your card benefits?
- does the credit card insurance provide coverage for pre-existing conditions?
- what are the reasons for cancellation that they will cover?
- is coverage limited only to those arrangements paid for by the credit card?
Baggage and Personal Effects
- does your homeowners or tenants policy cover your property off premise?
- what are the perils and hazards covered(fire, theft, etc.) under your homeowners/tenants policy for off premise coverage?
- are there limitations to "unscheduled" property?
- what is your deductible?
- does your credit card provide baggage and personal effects coverage?
- Is it limited to only while your bags are checked on common carriers paid for by the card
- Is there any coverage while your bags are not checked on a common carrier?
- does your credit card provide for rental car coverage?
- Must you use your card for the rental?
- Are you limited to the number of days that you can rent the car?
- does your own automobile policy cover rental cars (most are limited to the USA and only provide the same coverage as you have for your own car)?
Liability coverage is the one area of financial exposure where travel insurance in the USA will not provide coverage.
- does you homeowners policy cover you worldwide for your liability?
- does your automobile policy cover you for auto accidents that are your fault?
Knowing the answers to these question will give you a much better idea as to your risks which will allow you to focus on those risks you're most concerned about. Travel insurance can help with almost all of the above except for the liability coverage. Travel insurance plans do not offer liability coverage either for automotive or personal liability.