Do I really need travel insurance?
It comes down to one question: How much can you stand to lose if something prevents you from taking the trip? Always cover cruises or package tours. Also, consider coverage if you have a long itinerary or are traveling overseas.
What does it usually cover?
Most policies allow you to cancel or interrupt your trip for a covered reason — which can include an injury or illness, a missed connection, or an unpredictable event such as a terror attack. If your trip is derailed for one of those reasons, you’re entitled to reimbursement for costs that are usually not refundable (like plane tickets).
“Cancel for any reason” policies have broader coverage (though there may be exclusions, so read the fine print) and tend to be more expensive. What most travel insurance doesn’t include is health care abroad.
Will my health insurance cover me overseas?
It depends on your plan. Medicare, and even most private health plans, won’t cover you outside the U.S., so check to see if it has overseas coverage. Many European countries offer universal health care — even for visitors — that may be free or cost a small fee. But you might want to shop for separate travel health insurance.
Where can I find a good policy?
Travel agencies offer policies that will generally cover you for the duration of your trip. Most airlines, cruise lines, and tour operators offer optional insurance that tends to have more exclusions. You can also buy direct through one of the travel insurance companies. Choose a company that is a member of the U.S. Travel Insurance Association (UStiA).
What’s it going to cost?
A few factors determine the cost of your insurance: the price and length of the trip, your age, and optional add-ons. A policy typically costs 3 to 5 percent of your trip’s prepaid, nonrefundable costs. A “cancel for any reason” policy can run you 7 to 10 percent of the nonrefundable cost, sometimes more. Some plan provisions are available only if you buy the policy within 14 days of your initial travel purchase. For example, some policies will cover most preexisting conditions if you buy insurance within the first two weeks. Some policies are more expensive if you’re older or are engaging in risky activity.
Do I have to read the fine print?
Yes. And don’t wait until you have to file a claim. If anything is unclear, call the insurer and ask for explanations in writing. Even if you’ve already clicked “buy,” you can reconsider. All policies have a “free look” period of 10 days. If you review your policy after purchasing it and decide it isn’t the right fit, you can cancel it within that period for a full refund.