You’ve been planning your dream trip to Italy for what seems like forever. You’ve diligently put aside a chunk of every paycheck. You’ve devoured a dozen guide books. You’ve been cooking Italian all year! You’ve imagined a perfect journey, complete with trying all those great wines you’ve read about but never seem to find in your local wine shop. You’ve triple checked your packing list and triple checked all the logistics. What could go wrong, right?
The travel insurance industry was invented more than 150 years ago to answer that very question. Today, travel insurance companies protect travelers against a wide range of mishaps that could easily derail their vacations and business trips. With the rise in global travel, the travel insurance market is expected to balloon to $35 billion by 2025.
Does travel insurance make sense for you? That depends on whether you’re a gambler. But if you’re someone who likes to play it safe, travel insurance can offer important benefits—not to mention peace of mind. Travel insurance premiums represent a small percentage of the cost of your trip and could save you hundreds if not thousands of dollars in the event you need to make a claim.
Just as you would when purchasing auto insurance, take the time to get several quotes when selecting a travel insurance company. Each company offers its own individual types and combinations of coverage, so take the time to understand the different benefits available to you.
Cancellation coverage, as its name suggests, kicks in when you need to cancel your trip for such reasons as sudden illness, family emergencies, and natural disasters (either where you live or in your destination.) It reimburses you for non-refundable expenses, including airfare, which often represents a significant portion of the cost of your trip.
Let’s say you’ve already arrived at your destination and a phone call from home alerts you to an emergency. If you’re carrying trip interruption insurance, you’ll be reimbursed for the expenses of traveling home and resuming your trip once you are able.
The most comprehensive protection you can buy is Cancel For Any Reason coverage. CFAR policies are sold as add-ons to standard cancellation coverage. If a week before your trip, your boss casually informs you that you have to show up for a make-or-break presentation during the time you had planned to travel, you can make the presentation and still recoup a portion of your non-refundable travel expenses. Generally, CFAR policies do not reimburse you for all of your expenses; 50% to 75% is more common. The more you can collect under the policy, the higher your premium will be. CFAR makes sense for travelers whose schedules are very unpredictable or those who need the ultimate in flexibility.
Some of the most common misadventures travelers face are falling ill or getting hurt while abroad. That’s why medical insurance is the most essential travel coverage to carry. Chances are, your current health insurance policy only offers limited coverage outside the US—and some policies exclude it altogether. Medicare is one such policy, so for seniors, medical insurance is an absolute necessity. Although in Italy some health services are free to tourists at government-run facilities, that isn’t the case when you see a private doctor. Travel medical insurance will reimburse you for evaluation, treatment, and transportation by ambulance no matter where you choose to go for health care. Incidentally, accidental death and dismemberment coverage—we know, nobody likes to think about the worst when planning a trip!—is also included in most travel medical policies.
Like your at-home health insurance policy, your auto insurance policy may not cover you while traveling abroad. If you are renting a car while traveling, protect yourself by adding auto insurance to your coverage schedule.
Most seasoned travelers have come up against the challenge of lost, stolen, damaged or delayed luggage. It’s not such a big deal when you’re traveling stateside to visit family, but it can really put a damper on an international trip, when you’d rather be doing anything but shopping for replacement toiletries (in another language, no less!) Baggage coverage can compensate you for the headaches associated with baggage mishaps, but be sure to understand the limits of any policy you purchase. You may want to increase your coverage limits to be sure you’ll be adequately reimbursed for electronics and other high-ticket items.
Here’s a tip for cost-conscious travelers—and that includes pretty much everyone, doesn’t it? If you’re traveling with friends or family, consider a group plan. Under group coverage, travelers share the cost of a single policy, which typically reduces the amount any one traveler has to pay for protection. The money you save could buy a bunch of bottles of Prosecco! Cin-cin!