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How Does Travel Insurance Work?
Travel insurance is a must have for traveling the world and keeping peace of mind. This applies whether you are traveling for fun or taking a business trip to another area. The benefits of travel insurance include more than just peace of mind, however.
Having travel insurance can save you money on a range of costs in case your trip is interrupted. In the absence of insurance, you could be out of pocket for travel tickets purchased and other expenses that you had prepaid.
Below, find out how travel insurance works, and what it benefits are for the individual traveler.
Types of Travel Insurance
If it’s your first time buying travel insurance, you may be confused at the variety of offers from travel insurance companies. The numerous types of insurance products for travelers is partly responsible for the complexity.
Travel insurance comes in the following broad categories:
- Trip cancellation – Covers the interruption and cancellation of your trip.
- Medical and evacuation – Will pay medical costs such as for sudden illness and evacuation to a treatment center
- Baggage – Covers lost or stolen baggage
You can also buy hybrid insurance plans that cover all aspects of your trip.
Buying Travel Insurance
Before buying travel insurance, you need to determine the right type of insurance for your needs.
If you are traveling close to home, chances are you won’t need medical and evacuation cover. However, if you are traveling to a far off country and engaging in high-risk activities such as sports, injury insurance cover, for example, might be in order.
Once you decide on the right type of travel insurance, check with the major travel insurance providers for your state. Compare multiple providers to make a well-informed selection.
Understanding the Benefits Included in a Plan
When you buy a travel insurance plan, make sure to educate yourself on all the included benefits. This will make sure you know what is available and can make use of the benefit if need arises.
Typical benefits to check out include trip cancellation, lost baggage, and medical assistance. For each benefit offered in your plan, make sure you understand what amount the benefit will provide. Trip cancellation benefits, for example, may cover all or part of your ticket and hotel expenses.
How Travel Insurance Claims Work
When you go on your trip, make sure to bring with you your travel insurance policy credentials. This includes your policy number and any other proof that you are actively enrolled in the policy.
Alert your travel insurance company immediately if the need arises to file a claim. This might be in the form of lost baggage, a cancelled trip, or medical events.
Collect any receipts and documentation that will be necessary to support the claim. This includes, for example, a police report in case of stolen baggage.
Once you submit the claim forms with documentation, the insurer will assess your claim. Check with them after a reasonable time for progress on your claim.
Costs and Fees Associated with Travel Insurance
Costs for insuring your trip depend on the total trip cost. This is true, for example, for vacation packages that cover all your travel expenses such as on a cruise. The travel insurance company might charge anywhere from 5% to 10% of the total trip cost in insurance fees.
Optional add ons such as “cancel for any reason” will cost extra. You may save some money by selecting a higher deductible for your travel insurance plan. Be careful with this, however, as you could end up paying more out of pocket if something goes wrong on your trip.
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