– Seven things to know before you buy travel insurance. I’m Chris, this is Yellow Productions. I do travel guides that are fun, informative, and entertaining. And since the recent pandemic, I’ve been getting questions about travel insurance, quite a bit that recently. People often ask me, “Chris, should I buy travel insurance?
Should I insure my next trip? Is it right for me? Do you buy travel insurance?” So those are some of the things I’m gonna answer in this video and more everything you ever wanted to know about travel insurance.
The first thing to know is travel insurance doesn’t make sense for everybody.
To determine whether it makes sense for you, you have to decide how willing you are to take financial risks related to travel. Travel insurance exists to minimize the financial risk when you travel and so you have to look at the trip that you’re taking, how much money did it cost? If you can’t go or something happens, how much money are you out? Are you just out a few hundred bucks in air fare or is it a $20,000 once in a lifetime trip? Those are things you have to look at to decide whether you wanna buy travel insurance or not.
And you also have to ask yourself, how much is peace of mind worth to you? If you’re someone who worries a lot, peace of mind might actually be worth quite a bit.
The second thing to know is that there are many different types of travel insurance. Travel insurance is not a one-size-fits-all thing. And every travel insurance plan covers different areas and different conditions.
So now, I wanna share with you some of the coverage areas that you might be interested in and looking for in a travel insurance policy. The most common coverage area for travel insurance is trip cancellation coverage. If you have a policy that has trip cancellation coverage, then your insurance will refund you the price of your trip provided that the reason you’re canceling is one of the covered reasons. By the way, COVID-19 coronavirus typically is not one of the covered reasons for most travel insurance policies. Often paired with trip cancellation coverage is trip interruption coverage.
This one kicks in if you have to interrupt and stop your trip halfway through, a third of the way through, because something happened and you have to go home.
In that case, the insurance would refund you the rest of the price of your vacation that you didn’t get to enjoy. Trip delay coverage will reimburse your expenses due to delays in travel. So if you’ve ever been stuck at LAX or London, Heathrow for 6 to 12 to 18 hours, you might have to stay in a hotel overnight, that’s what trip delay coverage is for. One area that might be pretty important to you is medical coverage, Medical coverage as part of a travel insurance policy will reimburse medical expenses incurred at you are travel location.
You might also want to look at emergency evacuation or transport coverage so that if you have to go to a hospital, if you’re in a third world country, if you have medical transport or emergency evacuation due to a medical situation, then they will pay for transporting you to a better country that has better health facilities. Death or dismemberment coverage, this one’s kind of a depressing one, but if the covered person dies, or is dismembered, loses limbs, then their next of kin or in the case that they were dismembered would receive the money associated with that part of the policy.
Baggage coverage will provide for reimbursement of expenses due to loss, damage delayed, or stolen baggage. Rental car coverage will cover your rental car on a trip. Change coverage will cover you of you have to make change fees to your airlines reservations, cruise ships, whatever the change these come from.
Some less common types of coverage areas but you might be interested in them depending upon where you’re going. The first one is political evacuation coverage.
If there’s something like an uprising in the country, this we’ll provide for your transport out of that country in that situation. If you see a policy labeled as a comprehensive policy, that’s typically one that covered almost all of the things that we talked about above. If you’re looking at a policy that says it’s reimbursement only, then the way that policy works is you pay first and then you get reimbursed.
Some might pay before you first in the case of medical transport, the insurance company might pay for that direct. So you have to see, do you have enough money in the bank to pay for those potential expenses and then fight to get your money back later from the insurance company? Another type of interesting insurance policy are annual policies. If you travel a lot, then you actually might want to look and getting an annual policy, which would cover you on all the trips you take in a year. This would make sense if you travel quite a bit.
The third thing you need to know is about price. Travel insurance generally costs 5% to 12% of the total value insured for the trip.
The biggest factor is the age of the people insured, and if your age is over 50 years old, then it generally goes up considerably from there. Children under the age of 17 might be free or discounted provided that there are some adults on the policy already. The prices of travel insurance can range wildly, so definitely comparison shop, and don’t just buy the travel insurance company that your airline or cruise company is pushing on you when you book directly with them.
The fourth thing to know is about when to buy travel insurance, and many people think that you have to buy travel insurance at the same time that you book your tickets or flights or cruise, but that’s actually not the case. Typically, you don’t have to buy many types of travel insurance until just before you go. Now, if you’re buying a trip cancellation coverage that really gives you more value, the earlier that you buy it. If you buy it later on, well, you might not be reaping the benefits, ’cause something might already happened, you had to cancel it if you didn’t buy it at the same time.
Now there are some policies that do require you to purchase it within 7, 14, 21 days of booking your trip.
So you should research the policies and try to book it around the same time, but you don’t have to. The fifth thing to know is a bit more detail about medical coverage. I think this is one of the most important areas for travel insurance and so I want to dive into it a little deeper than I did earlier. So first of all, if you already have health insurance, your existing health insurance plan or policy might cover you when you go on travel. Read the details, call your insurance company, figure that out before you buy travel insurance so you’re not spending money twice on something you’re already covered for.
Now you do need to dive into the details a little bit because if your insurance company says they cover you, well, they might actually be billing those coverage things at out of network rates, which could actually lead to some really expensive medical bills if something happens to you while you’re on travel.
And I mentioned earlier, but I’m gonna say it again, If you’re going to someplace kind of sketchy, you might really wanna look into a policy that gives you that emergency airlift service to take you to a civilized hospital. This type of coverage becomes more important the more adventuresome and the more remote places you’re going. For example, if you’re hiking the Himalayas and something happens to you up on the mountain, well, you’re first gonna need a helicopter. And then after the helicopter, you’ll need an airplane to actually take you someplace civilized.
So that can get expensive really quick. The sixth thing you need to know is about credit cards.
So a lot of people ask me, “Chris, do I need travel insurance if I already have a credit card that comes with some premium benefits?” Well, it depends on the car that you have. My favorite card is the Chase Sapphire Reserve and I think this one is the king of travel benefits so I wanna share the travel benefits that are on this card and then you can take a look at your premium card and see if your card has these benefits.
I’d actually be cheaper to get yourself one of these premium cards or a better deal than buying travel insurance. It provides loss, damage baggage coverage up to $3,000 per passenger, but only 500 of that can be for luxury items like watches and electronic equipment.
Trip delay reimbursement is covered up to $500 per ticket provided that your trip is delayed more than six hours. This is really helpful if you require an overnight stay due to a flight delay, flight cancellation that caused you to go out the next day. In this case, you don’t have to take the hotel that the airline is offering ’cause it might not be very good.
You could book your own and then reimburse it through the coverage on the card. Trip cancellation and interruption coverage is provided up to $10,000 per person or $20,000 in total for the trip, but that’s only gonna cover prepaid non-refundable expenses. If your tickets are refundable, then Chase is gonna say, “Why don’t you just go refund those tickets? We’re not going to give you your money back.” And then you refund the tickets.
Medical evacuation is covered, travel accident insurance is covered, emergency medical and dental expenses are covered up to $2,500, and one of the things that’s most useful for me is the Chase Sapphire Reserve provides primary rental car coverage up to $75,000. So if you’re traveling someplace out of your home country where your home car insurance doesn’t apply, if you book your car with the Chase Sapphire Reserve card, then you don’t have to get the insurance in that country. Now, if you’re doing that, some countries do require you bring proof of insurance. In that case, you can actually get a proof of insurance for the country you’re going to from Chase. So the seventh thing to know and the question that people ask all the time is, “Chris, do you get travel insurance when you travel?
” And for me, I typically don’t and let me tell you why. I typically book my flights with miles or points, and miles or points bookings are often refundable or changeable either for free or for a small fee directly with the airline.
Now, in order to get the Chase Sapphire coverage, I put the taxes and fees from those tickets on my Chase Sapphire card, and then that gives me the coverage, all of the benefits talked about from Chase Sapphire for the trip because I bought the airline tickets through the credit card. And for medical insurance, our medical insurance covers us when we travel and we’ve actually tried it out overseas. My mom was in Japan.
We went to an urgent care clinic and we asked our insurance company if they would cover it, they said they absolutely would. The cost was only $80, but they said, “You have to fill out 18 reams of paperwork.” And we’re like for $80, it is actually not worth getting reimbursed. So that’s something you have to think about too. Do you wanna go through all the pain of travel insurance reimbursement, but I will say, the time that you probably will want to get travel insurance is if you’re booking that once in a lifetime trip, that’s all prepaid, non-refundable, costs a lot of money, that probably is going to be something you’ll want to insure because you’ll wanna make sure that all that money that you sunk in that vacation doesn’t go, poof, in the event that something happens.
Also, if your health insurance won’t cover you while you’re traveling and you don’t have a premium credit card that provides all these benefits, then travel insurance starts to make a lot more sense for you. So those are my thoughts on travel insurance. I’m curious what yours are. Do you get travel insurance when you travel? Did I miss something?
If I did, please leave me a comment, let me know. And as usual, I won’t say goodbye because I’ll see you in one of these videos..