Whether for business or pleasure, summer means travel for many individuals. Embarking on overseas adventure provides fun, sun, and cultural enrichment, but occasionally unfortunate incidents occur. Any traveler who has experienced lost baggage, cancellations, delays, illnesses, or injuries while abroad understands the importance of travel insurance.


As you book your next trip, you may wonder whether or not you should purchase the travel insurance your travel agent offers. Deciding on whether to obtain insurance – and if so, what type – depends on individual factors, such as financial circumstances, medical conditions, and risk thresholds.


Types of Travel Insurance


Depending on where they are traveling and their potential needs during that time, travelers may select between several “flavors” of travel insurance, including:


Medical. Some countries require visitors to carry minimum levels of health insurance, should an accident or illness occur. If your regular health insurance provider does not cover care you receive overseas, coverage for medical care or evacuation should amount to at least $50,000.

Trip cancellation. This insurance protects travelers financially should they end up cancelling their trip. Policy owners typically recoup 75 to 80 percent of travel costs for trip cancellation claims, rather than losing the entire amount. Trip interruption or trip delay coverage also provides coverage for expenses caused by unforeseen circumstances, such as missed connections or flight delays.

Baggage coverage. If a travel supplier (such as an airport) loses your luggage, this insurance reimburses you for these items. Before purchasing this insurance, check with your homeowner’s or renter’s insurance policy, as well as credit card companies, to find out whether they provide this service automatically.


When and Where to Purchase Travel Insurance


Should a traveler determine they need travel insurance, they may wonder how and when to purchase it. Insurance companies, travel agents, brokers, and third-party companies all offer these products, and deciding which type of company to trust can be difficult.


One possible method travelers use to find the best deal on travel insurance is to explore third-party provider websites to compare coverage levels and costs. Whether they ultimately choose to purchase from one of these vendors or from another party, they can be sure they are receiving a competitive rate.


As for timing, the sooner a traveler purchases insurance after booking a trip, the better. This allows consumers to obtain a “pre-existing condition waiver,” which removes obstacles to receiving payment should a claim occur. Ideally, travelers should purchase insurance at the same time they purchase their travel tickets.


How Much Does Travel Insurance Cost?


The dollar amount travelers pay for insurance depends on the type and level of coverage. However, the total price should be no higher than 3 to 8 percent of the total cost of the trip.


Weighing decisions regarding travel insurance can be a difficult decision. By conducting due diligence to determine the right forms and amounts of coverage – as well as the trustworthiness of the companies providing these policies – travelers stand the best chance of making responsible financial decisions as they venture out into the world.


What types of insurance are you considering for your upcoming travel?