Friday, September 23, 2011

What Is Travel Insurance?

Travel insurance is almost a necessity for anyone who does a lot of traveling. Even though it can be great for infrequent travelers (depending on where you're going), it really shines for the road warriors.

So what is the definition of travel insurance, exactly? Basically it's a way to make sure that if you pay for a bunch of things related to travel (such as a plane ticket, baggage fees, etc.) and then for some reason you have to cancel, your insurance will refund you part of the money you lost.


To be honest though, that's just one type of insurance you can purchase. That one I just discussed is called trip cancellation and interruption insurance. You can also purchase other kinds such as flight insurance (which tends to not be worth the high cost).

Another form of travel insurance is travel health insurance. This really shines if you are traveling overseas. In the case of some kind of accident while you're in another country, this insurance will help take care of the medical bills you incur in that country.

Yet another type of insurance is baggage insurance. Taking lots of expensive things (such as nice suits or dresses) in your baggage? Then this can be a great choice. But if you don't have anything too expensive in your bag (keep jewelry on you during the flight), then baggage insurance usually isn't necessary.

With so many types of insurance to choose from, it can be confusing to decide which one you should take (if any of them), and how much coverage you should get.

The best way to make this decision is to weigh up the positives and negatives of the policy. To make things easier, we'll discuss all types of travel insurance rolled into one, rather than evaluating each type of policy.

One of the main disadvantages of this form of insurance is the cost. Like most policies, you will probably never have to use this insurance, so why pay for it? After all that's like paying to get your car repaired without it actually getting repaired, right?

Depending on how much you fly, these costs can add up fast. Just like auto insurance goes up the more you drive, travel insurance can increase the more you fly. They have to do this to cover your increased risk of having a trip get canceled or having a medical issue at your destination.

Another factor to consider is just the stress. Is it really worth sifting through all these insurance policies and plans to decide which one is best for you? If you stress out about little things easily, then you may want to try a different path. Nobody likes dealing with insurance companies, and adding more stress to your life isn't a good thing.

Plus we all know that salespeople can be a little scammy sometimes. They might push you to have this expensive, premium policy that you really don't need! Watch out for this if someone is pushing you to get baggage insurance and it's REALLY obvious that your bag isn't worth nearly as much as he's pushing you to believe!

That said, there are a lot of reasons why travel insurance can be a good thing. Again, those who travel often will benefit the most from these policies, but other people can definitely benefit as well.

For one thing, insurance actually helps a lot of people sleep better at night. They know that since they're insured, they don't have to worry about losing a bunch of money on their travel plans. Whether a snow storm cancels the flight, they get sick while on that business trip to China, or their baggage with $500 suits gets lost somewhere- they know they're covered.

Another example of the advantage is that in the long run, the finances might work out better for you. Although usually we end up paying much more for insurance than we'll ever need, you'll be glad you have it when that hospital bill overseas is $5,000 and your insurance can pay 95% of it!

Finally, some people don't get too stressed out when going through different policies. They might even find it interesting and exhilarating to get the best deal on the market by shopping around from policy to policy!

Is travel insurance for everyone? No, not really. Many people don't like the extra hassle, and just don't think the benefits are that great. But if you're considering getting travel insurance for an overseas trip or long string of trips- do it!

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