Travel Insurance Checklist: 5 Types of Coverage To Consider – Technologist

No matter how well you plan a trip, there are always factors that are out of your hands. One way to prepare for the unexpected is to purchase travel insurance.

Travel insurance offers financial protection against many unplanned events that can happen while you’re away from home. Although he’s not a fan of narrow insurance policies, travel insurance is money expert Clark Howard’s exception.

Of course, when it comes to travel insurance, there might be as many combinations of coverage as there are destinations on your travel bucket list. So, how do you know which coverages you need and which to skip? In this article, I’ll review the following:

• 5 Types of Coverage To Consider
  • Cancel For Any Reason
  • Medical Expenses
  • Personal Belongings
  • Supplier Default
  • Travel Delays and Interruptions

5 Types of Coverage To Consider

If you’re thinking about buying travel insurance, you have quite a few coverage options to look over. But there are a handful you should definitely look for — or at least consider — as a requirement for any policy you purchase. This includes:

• Cancel For Any Reason (CFAR)
• Medical Expenses
• Personal Belongings
• Supplier Default
• Travel Delays and Interruptions

Depending on the insurer, these coverages might have different titles. They also can be lumped together. For example, one company might bundle its medical coverage with the same type of events listed as personal accidents.

No matter what type of coverage is right for you, or who you choose to get insurance with, it’s important to always read the fine print of a policy! Always know your coverage limits and any exclusions before you sign up!

With that in mind, let’s look more closely at the five types of coverage to consider before you travel.

1. Cancel For Any Reason

What Is It: provides reimbursement for certain expenses if you need to cancel your travel plans
When You Need It: your travel arrangements (airfare, hotel, etc.) aren’t refundable

Cancel For Any Reason insurance is not typically included with standard travel insurance policies. You’ll either need to buy separate coverage or pay more to add this protection to a base policy. And although it’s called Cancel For Any Reason insurance, there are conditions.

First, there are requirements you’ll have to meet in order to make good on the “any reason” coverage. So, make sure you know what your policy’s requirements are in order for claims to be honored.

Second, it’s time-sensitive. You have to purchase the protection within a set number of days after paying for (or partially paying for) your trip. And third, don’t expect to get 100% of your trip refunded. Often, reimbursement limits are between 50-75% of what you paid.

If you’re still unsure about whether this coverage is for you, check out our guide on when you don’t need Cancel For Any Reason Insurance.

2. Medical Expenses

What Is It: covers costs if you need emergency medical care while traveling; may include emergency medical evacuation
When You Need It: you’re traveling to a location that your existing health insurance won’t provide coverage in

It’s generally a good idea to make sure you have medical coverage when you travel. Nobody plans to get sick or injured. But if it happens, the last thing you want to add to your plate is stress from the costs of care.

It’s especially important to figure out how health care can be covered during travel if you have pre-existing conditions. Travel insurance policies sometimes exclude coverage for certain conditions. And when you’re reviewing exclusions, be sure to check out expectations for co-pays, deductibles or other fees your coverage might require.

If you’re traveling to a more rural location, you may also want to look into medical evacuation coverage. This is sometimes included with medical expenses coverage, but not always. Medical evacuation ensures that if you need to be transported to a new destination for adequate care, the costs are covered.

3. Personal Belongings

What Is It: compensation to replace personal belongings in the event of delays or loss
When You Need It: you check bags, travel with valuables and/or aren’t a light traveler

Whether you pack light or for every possible scenario, packing is a big part of traveling. Personal belongings coverage protects the things that go with you when you travel. Depending on who you get travel insurance with, you might find you need personal belongings and baggage coverage. But sometimes these two types of coverages are combined.

While many airlines offer some level of protection if your baggage is lost or damaged during transit, their coverage can come with lots of restrictions. Travel insurance with baggage and personal belongings protection generally increases the types of events that your belongings are protected against. Stolen belongings, for example, are often covered with a travel insurance policy that offers this protection.

4. Supplier Default

What Is It: protection in the event that a supplier (ex: tour operator, cruise line, airline, etc.) you paid stops offering services due to financial reasons like bankruptcy or insolvency
When You Need It: Clark says supplier default is one of the main reasons to buy trip insurance overall; especially important if you book excursions or travel with smaller/regional transportation companies

Here’s why Clark says supplier default coverage is important:

“The tour operator business is one that relies on advanced deposits and advanced payments from people to operate. And so even a tour operator that may have been in business 40, 50, 60 years may eventually hit rough times and go bust with potentially millions of dollars in people’s deposits gone with the wind.”

The consumer champ says that the instability with travel suppliers has led to many insurance companies excluding supplier default from their coverages. And credit cards that offer trip insurance benefits have followed suit. This is why it’s so important to read the fine print of a travel insurance policy.

“You gotta make sure — even if in the past you used a card to pay that covered it — you gotta check again to see if it still covers it. As an example, one of the most popular cards that people use for travel — the Chase Sapphire product — they now no longer cover supplier default,” Clark warns.

He continues, “You have to look for the companies that still cover supplier default. It may mean you pay more money for the trip insurance than you would for one that now excludes supplier default.”

5. Travel Delays and Interruptions

What Is It: covers costs (ex: for food, lodging, transportation, etc.) if your trip is delayed or interrupted
When You Need It: good to have in general when you travel, but especially if you’re traveling to/from a location with unpredictable/extreme weather; typically included with travel insurance

When you travel, there are so many elements you simply can’t control. So, this coverage is great to have for protection against unexpected delays and interruptions that can add up quickly.

For example, you never know when extreme weather will leave you stuck in a city away from home. Trip delay coverage means you don’t have to come out of pocket to sleep in a hotel bed instead of on the airport floor. Or, sometimes, there are emergencies back home that require you to cut a trip short. This is where trip interruption coverage can kick in and give you one less thing to worry about.

Final Thoughts

Traveling, for better or worse, is always an adventure. It’s great to be prepared for the unexpected, especially when you’re away from home and may not have access to your typical daily resources. The coverages above are the basics that you should consider any time you’re going on a trip.

But you might find that where you’re going or what you plan to do while away comes with additional, narrower risks. For example, maybe you’re going on a snowboarding trip and need specialty coverage for sporting equipment that isn’t covered by standard baggage and personal belongings protection.

When you’re ready to buy travel insurance, always review the fine print. Know what’s covered and what’s excluded. Then compare the fine print to your itinerary. If there are gaps you want to insure against, you might need to add additional coverages for the best, personalized protection.

The post Travel Insurance Checklist: 5 Types of Coverage To Consider appeared first on Clark Howard.