What Does My Travel Insurance Cover?

So, you’ve finally booked that lifelong trip to Machu Picchu, and used up much of your savings to go explore the famed and bewitching Inca trail. You’ve booked all your tours for the next two weeks, packed all your essentials into one bright and spacious duffel bag, and arrive at your Lima hotel only to find that your stomach is in violent disagreement with that salad you had. Or maybe it was that water they served you?

Regardless, you spend the next week bedridden and in intestinal purgatory.

It’s in situations like these that travel insurance can seem like a god send. Those medical bills and non-refundable tours could have been covered with the right travel insurance policy. Nobody ever goes on a trip thinking an accident will occur, but almost everyone is aware that emergencies certainly can happen. So, because the mere possibility of accidents exists— because nature is unpredictable, and our bodies sometimes betray us—it’s always a smart idea to get travel insurance before a trip.

So, what is travel insurance?

Much like other types of insurance, travel insurance acts as a safeguard against any possible disasters, accidents, or emergencies that may occur during your trip, or that may cause you to lose your trip altogether.

You’ll usually spend 4-10 % of your prepaid trip cost on your travel insurance plan, which can seem pricey until you consider the thought of losing a $2,000 trip to unexpected events.

One survey found that although 49% of people have a pretty good or basic idea about what this type of insurance covers, only 7% of them actually bought travel insurance on a regular basis.

Although travel insurance is generally known for providing medical and/or cancellation coverage, plans can vary amongst providers. So let’s break down some of the basic things travel insurance can actually cover..

Medical Coverage

  • Medical Insurance: Covers access to medical facilities in-country.
  • Medical Evaluation: Emergency travel to your hospital of choice around the world.
  • Emergency Dental: Covers broken teeth, infections, etc., usually for up to $1000.
  • Accidental Death and Dismemberment: Limited life insurance benefits in case of accidental death. Partial payouts for loss of limbs or appendages
    Repatriation of Remains: Covers the return of bodily remains in case of death.
  • An important caveat to consider with medical coverage is that most insurers will perform background checks looking for any “preexisting conditions” in the last 60-180 days to assess whether you exhibited any prior symptoms before going on your trip.

Cancellation Coverage

  • Cancellation: Provides reimbursements for prepaid and nonrefundable expenses on a trip that had to be called due to a natural disaster, emergency illness, and several other different incidents.
  • Interruption: Covers trips that are unexpectedly interrupted or cut short because of some natural disaster, political event (such as a terrorist incident), or illness. Occasionally, the insurance company will pay for returning the insured back on their trip.
  • “Cancel for Any Reason” (CFR): This pricier coverage will usually only cover 50-75% of the cost of your trip and is aimed at people traveling to riskier or more unpredictable locations.

An almost standard characteristic of travel insurance plans is that they won’t cover the accidents if they were caused by alcohol or drug intoxication. This means that if you missed your flight because you had one too many sangrias the night before, you’re in tough luck.

Credit Cards for Insurance

If you used a credit card to pay for the flight or hotel accommodations — which is the main way to make reservations — then you may be covered if your credit card offers free travel insurance as a perk of being a customer.

A number of travel credit cards provide various types of travel insurance (including car rental loss and damage insurance) when you use your card to pay for flights, rental cars and other travel expenses.

Whichever credit card you use to pay for a flight, remember its travel insurance shouldn’t be a replacement for more comprehensive coverage you can buy yourself from a travel agent or travel insurance company. Read the fine print of your credit card’s travel coverage and make sure any exclusions are covered by your own policy.

In the end, whether its scuba diving in the Great Barrier Reef, or sunbathing on the shores of Ipanema, the unexpected can always occur. Travel insurance can at least help to make sure you get back some of your lost money—and peace of mind.

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