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The last thing you want to think about when making
travel plans is the possibility of an accident. As a result, many
people never think about travel insurance. But travel insurance
covers much more than worst-case scenarios.
Costs vary by provider and coverage, but you can generally
expect to pay in the area of 3-6% of the cost of your trip.
Typical Coverage
As with all forms of insurance, travel policies vary widely as far
as what is covered and not all policies provide the same
protection.
- Emergency cancellation - If you cannot go on the trip
due to an emergency (illness, injury, death in the family, etc.)
the insurance covers all out of pocket costs for non-refundable
deposits and tickets.
- Default by Travel Provider - The
insurance covers your losses if a hotel, airline, or tour operator
goes bust before your trip.
- Medical Expenses - The
insurance should cover any costs associated with illness or injury
suffered on the trip, including doctors, hospitals, and
transportation (such as ambulances). The insurance may also cover
a flight home.
- Baggage - Some policies cover the cost of
lost baggage and "essentials" purchased as replacements
while traveling.
Car Insurance - Your policy may provide coverage for rental
cars.
Do you Need the Insurance?
The answer to this question is based primarily on four different
factors.
- Cancellation Policy - If your plane tickets are
cancelable (perhaps for airline credit) and your hotel offers a
24 hours cancellation policy, then you may not need the travel
insurance, though most policies do provide additional coverage
(such as injury while on vacation).
- Financial Exposure - You need to ask yourself how
damaging the financial loss would be without the insurance.
- Normal Insurance - Does your normal health insurance
cover you for injuries sustained while out of the country?
- Credit Card Coverage - many credit cards cover
purchases, renatl cars, and more. Check your agreements
carefully so you don't duplicate coverage.
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