How Much Travel Insurance Coverage Do I Need?
Travel insurance is designed to be a financial safety net for travelers while they’re away from home. But travel insurance plans aren’t one-size-fits-all, and selecting a policy from a long list of options can be a daunting task. Knowing how much coverage you actually need is a great way to make your selection easier. Follow along as Squaremouth breaks it down.
What Does Travel Insurance Typically Cover?
Travel insurance plans are built to primarily cover the most common travel concerns, from major trip disruptions like flight cancellations and medical emergencies to less significant mishaps like delayed luggage. Below are the main events travel insurance covers:
Trip Cancellations
Comprehensive travel insurance plans include Trip Cancellation and Trip Interruption coverage, with protection for your prepaid and non-refundable trip expenses. This is the most common reason travelers buy trip insurance.
Medical Emergencies
Travel medical insurance is the second most common reason travelers buy travel insurance. Most plans include Emergency Medical coverage for costs incurred to treat an illness or injury during your trip, as well as Medical Evacuation coverage in the event an emergency evacuation is needed.
Travel Delays
Most travel insurance plans include Travel Delay and Missed Connection coverage as part of their package of benefits. These benefits are designed to cover the costs of meals and accommodations in the event of a significant flight delay, and can even catch you up to your itinerary if you miss part of your trip due to the delay.
Lost or Delayed Luggage
Not getting your luggage when you reach your destination, or losing it altogether, is a travel nightmare. Travel insurance plans include luggage insurance to refund you for buying essentials if your bags are delayed. If they are lost outright, baggage loss insurance can refund you for lost items.
How to Decide How Much Coverage You Need
Most travel insurance plans provide many of the same benefits, but coverage amounts vary significantly. How much coverage you need depends on your specific situation.
Key Factors to Consider
When comparing plans, narrowing it down to one option can be difficult, especially when the coverage amounts vary so considerably. Consider the following key factors when choosing a travel insurance plan:
- Your trip cost. This is the key determining factor on whether or not you need Trip Cancellation coverage. If you have high prepaid and non-refundable trip expenses, you should cover them within your plan.
- Medical costs at your destination. Many countries have high healthcare costs, and most primary health insurance plans don’t extend coverage overseas.
- Your age and health history. If you are older or at high risk of a medical emergency during your trip, a plan with higher medical coverage can be key.
- The length of your trip. The longer you’re away from home, the higher the chance of something going wrong. And with that comes a need for more coverage.
Recommended Coverage Amounts
Common Mistakes When Choosing Coverage
When sorting through your options, take a moment to think about your main concerns for your trip. Are you most worried about losing your trip costs or do you not have any major non-refundable expenses? Is a medical emergency a major concern or does your health insurance cover you at your destination? Answering questions like this will help you decide how much coverage you need.
These are the most common mistakes travelers make when determining how much coverage to buy:
- Overpaying for more coverage than you need. Medical coverage amounts vary significantly, from $10,000 up to $1,000,000. Depending on your trip and risk level, you may not need to pay a higher premium for that much coverage.
- Underestimating medical costs while abroad. Knowing what you can expect to pay in the event of a routine medical event can help you determine how much coverage is necessary.
- Over-insuring your trip expenses. Travel insurance only covers your prepaid and non-refundable trip expenses, so don’t include any costs that you can get back if you cancel. For example, if your hotel charges a cancellation feel, only insure that amount rather than the entire cost of the hotel.