Travel Insurance 101: Do You Need It?


The travel insurance industry can be daunting. Find out why people do and do not get travel insurance and how to avoid getting scammed.  Then start your search in the right places.

Already know you’re going to buy travel insurance?

Good for you!  Here’s what I recommend:

  • World Nomads: I’ve used these guys for long-term and indefinite travel.  Other companies often can’t provide extensions, insure you if your trip has already started, or re-insure you if you’ve let your policy lapse – all options needed on long-term, open-ended trips.
  • True Traveller an option available to UK and European (EEA) residents, an alternative to World Nomads.  I hear good things about them.
  • Insure My Trip: For a decade, I’ve used this site to insure trips with fixed return dates. They compare policies for you, and the system allows you to cherry-pick your coverage.

Other options:

  • Squaremouth: another policy comparison site.
  • Travelex and TravelGuard: known for offering primary coverage asome travel insurance policies will only pay certain types of claims after they’ve tried to get any other insurance (job) in your life to pay first. If you’re going on a fixed trip, this might be a concern of yours.
  • STA Travel – students can get the ISIC card, which includes okay insurance + tons of industry discounts.  If you didn’t organize your own trip, companies like STA Travel offer coverage for the trips they create.
  • Medjet – provides extra evacuation security, which really matters to some.  Ensures you’ll be flown to the hospital of your choice back home (vs. flown to the nearest major city to be treated).
  • Divers Alert Network – a non-profit with intentions to cover scuba divers, but said to cover any traveler.
  • IMG – the only American alternative to World Nomads that I’ve heard of – double check ability to extend, activities covered, length of trip allowed.  I’ve been coming across a slate of negative reviews on forums recently that make me wary.  But every company has bad reviews, and all policies have sneaky loopholes.

Don’t even know what “travel insurance” is?

Travel insurance is meant to protect you should anything out-of-the-ordinary happen to you while traveling.

It doesn’t cover routine or preventative care, but it does cover unexpected illness and accidents.  And there’s more!

It can also cover non-medical things that happen, like:

  • trip cancellation and/or interruption
  • baggage loss
  • delays (baggage or travel)
  • evacuation
people confident because they have travel insurance

Do these folks have travel insurance? Carefree = probably!          photo pixabay

The more it covers, the more expensive it is.  How much?  A good policy that won’t leave you stranded on a technicality can be at least $1,000 a year.  That’s not a typo.  Shorter, less adventurous trips can be far cheaper to insure.

Insurance policies are full of fine print & loopholes that range from disheartening to heartbreaking, so get educated before you buy!

Not sure you want to buy travel insurance?

I hear you!  I can’t help but feel like travel insurance is mostly a huge racketexpensive, mind-boggling to acquire, and anywhere from painful to enraging to actually use.  Tragic tales abound of not being able to claim because of technicality.  However, there are also many, many relieved people whose travel insurance really saved their skin.  The horror stories from people who didn’t have insurance will make you think twice.

Arguments people (like me!) use to talk themselves out of travel insurance:

  • I can’t afford it. – The most common response to this is: “If you can’t afford insurance, you can’t afford to travel.” I find that statement highly annoying and exclusionary.  More accurate: if you can’t afford insurance but are going to travel anyway, you’re gambling the rest of your life and the financial lives of your loved ones.  Up to you!
  • I already have health insurance. – There’s a slim-to-none chance your current policy will cover you once you leave your country of residence.
  • It’s not worth it. There’s too much stuff they don’t cover.  – It’s true that the policies that cover your arms and legs no matter what activity you’re partaking in, also cost an arm and a leg.  Conventional wisdom: do right by your next of kin by at least getting solid medical coverage and repatriation of remains baka they’ll pay to fly your dead body home.  Then educate yourself about sneaky fine print and claims processes.
  • The companies never pay claims anyway. – That’s not true.  My Cambodian hospitalization was 100% covered by my travel insurance because I read the fine print.  Insurance companies are professionals at their own game.  To avoid becoming another internet sob story, become an expert on all the loopholes you’re agreeing to when you buy your policy.
  • I’m willing to take the risk. – Me, too sometimes. Again, remember: you’re not just risking your own life and financial future, but also the financial lives of your loved ones.  Unless you know your next of kin would happily leave you for dead if you exhaust your own means, remember that you’re making a decision for them, too.  Or perhaps your next of kin have even less money than you do.  In which case you’re risking that they could be stuck facing the tragedy of being helpless to come to the aid of someone they love.  Pretty intense.
  • If something happens to me, I’ll just pay out of pocket. – Me, too.  I’ve done this before.  I busted my ear drum in the Philippines doing a non-covered activity (just had a basic policy) and paid out of pocket.  Same for my busted ankle, and all my routine medical care on the road.  One tactic is to put aside the money you would have used to buy a policy, and use it only if something goes wrong.  As long as you don’t break both your legs while hiking in the Andes and need a $45,000 airlift to a hospital, or get hit (and run!) by a car in Australia or Sweden, the out-of-pocket approach could work.  Then again, you could find yourself in over your head for medical expenses and end up dragging your family down with you.

Okay, fine.  I’ll get Travel Insurance.  What do I do?

.

→ If you can stomach the cost of comprehensive, open-ended insurance:

Great!   Go to World Nomads and get the “Explorer” coverage or True Traveller (UK and EEA residents only) and get the “Traveller Plus”.  These policies are easy to understand, quick to obtain, and give you all the peace of mind you’re ever going to get from an insurance company.  Consider getting insurance as soon as you’ve purchased your first flight.  It doesn’t cost anything extra, but it increases your chances of being covered if a tragedy cancels your trip.

→ If you’re determined to pay as little as possible:

Good on you for not risking your life and/or the financial futures of your loved ones.  But get ready for an education!

  • Going open-ended?
    You probably still need World Nomads or True Traveller cTrue Traveller is available to UK and EEA citizens only.  You could get World Nomads 25% cheaper option, as long as you aren’t planning on going snorkeling, taking a cave tour, jumping off the cliffs into the ocean with your new friends, going up in the plane of that millionaire you hosted in your rented apartment in Croatia, etc.  True Traveller (for UK and EEA citizens only) has add-on “adventure” packs to augment their basic cover.  Both companies will let you extend as needed, so you only have to buy coverage for as far out as you know your travel plans.  Extending online was really easy for me.  And if you accidentally let your coverage lapse, it’s no big deal with them.  Buy as soon as you book your first big flight to be in a position to take advantage of the trip cancellation insurance.
  • Have a fixed return date?
    Can I talk you out of your fixed plans? If not, use Insure My Trip to compare policies.  They’ve been my go-to for ten years.  Prepare to invest a lot of time understanding each area of coverage, deciding whether or not you need it, agonizing over coverage that might be worth it for another $20, checking to see if your homeowner’s or renter’s insurance might already cover it, checking to see if your credit card might already provide coverage, and reading the disappointing fine print on a gazillion different policies.   If you decide on a plan with trip cancellation insurance, buy as soon as you book your first big flight to take the most advantage.

Don’t forget to educate yourself about fine print and become an expert on your policy!

Final Words:

It would by hypocritical of me to tell you you have to get travel insurance.  For the last ten years 70% of the time I’ve been insurance free dsorry Mom & Dad!.  Other times I bought policies thanks to bursts of responsibility or country entrance requirements. ea working holiday in New Zealand, etc.   When I had no policy or a policy that didn’t cover my misfortunes, I paid out of pocket.  I have one, glorious story of serendipity when I had a need for medical care and insurance that would cover it at the same time!

It’s up to you if you want to tempt fate.  Maybe you’ll be fine.  For sure going without it is a pretty huge gamble.

More info: Travel Insurance 201: Don’t Get Duped.

Tempted to opt out of insurance to save money?  These travel hacks are a better way to save:

Happy Traveling! ♣

References   [ + ]

a. some travel insurance policies will only pay certain types of claims after they’ve tried to get any other insurance (job) in your life to pay first. If you’re going on a fixed trip, this might be a concern of yours.
b. aka they’ll pay to fly your dead body home
c. True Traveller is available to UK and EEA citizens only
d. sorry Mom & Dad!
e. a working holiday in New Zealand, etc.