Over the years, hundreds of thousands of travellers have been stuck, distressed, sick or injured due to things they never imagined would happen to them. And those “things” seem to be happening with increasing frequency.
the volcanic ash clouds that halted
air travel in Europe twice in the last 18 months, then in South
America and Australia
in June; the historic earthquake in Japan that marooned
travellers in March and forced
the cancellation of thousands of trips; the abrupt start
of political violence across the Arab world this spring that forced
visitors to evacuate quickly; the severe US snowstorms that snarled travel
plans during the peak 2010 to 2011 winter holiday season.
On a smaller
scale, there are a multitude of events — a sick family member, a big project at
work, or the loss of a job — that can force last minute cancellations or
adjustments. There are also car crashes, heart attacks, broken bones and other
debilitating injuries that happen to travellers when they are far away from
happened to all these distressed travellers? It is likely the ones who had the
foresight to purchase travel insurance came out farther ahead than those who
decision to purchase or pass on travel insurance is complex. For some people, on
certain types of trips, it makes perfect sense. For others, it might be an
unnecessary extra cost. So knowing about the three broad categories of travel
insurance is a good first step: one protects your finances, another protects your
health while you are travelling and the third helps you get home in the case of
a medical emergency.
Trip cancellation coverage
There are a
wide variety of insurance plans designed to protect travellers from taking a
financial hit because of trip cancellation or interruption.
trip cancellation policy protects travellers from losses if they are unable to
travel. For example, a couple buys airline tickets and makes a large deposit
for a Mediterranean cruise, but at the last minute, one of them falls ill,
forcing a cancellation. In this case, travel insurance would refund the cost of
the entire vacation. If the couple did not have insurance, they would only
receive a percentage of the cruise deposit back (if any), and airline tickets
would likely be forfeited or assessed a hefty cancellation fee. The cost of
trip cancellation policies is typically about 5% of the total trip cost.
interruption plans protect travellers who get stuck once their trip is
underway. For example, Susan Godfrey of Morristown, New Jersey, was recently returning
home from a trip to Alaska, which required a stop and change of planes in
Seattle. But her flight from Anchorage to Seattle was severely delayed, forcing
her to spend the night in Seattle before continuing on to New Jersey the next
she had purchased a policy that included trip interruption, she called the
insurance agency, which booked and paid for an overnight stay at an airport
late in Seattle, we went straight to the hotel. We got our keys and were
checked in as other people from our flight started arriving. However, there
were no rooms available!” she said. “So we had our room, guaranteed, and they
were out of luck. We were really happy and pleased with the service.”
trip cancellation or interruption policies can be filled with exclusions and
loopholes, (illnesses, for example, can be considered pre-existing conditions),
it is increasingly popular to purchase “cancel for any reason” policies that cover
losses if the holder decides not to take a trip for any reason. This includes cancelling a trip due to fear of
political or civil unrest, as we have seen in the Middle East.
policies are more expensive, typically running at around 10% of the trip cost
(versus 4% to 8% for standard policies), but they provide the most protection. Travel
suppliers like airlines, tour companies or cruise lines act as brokers for
insurance companies and typically sell these policies only when you purchase
tickets or make deposits.
travel insurance provides coverage or assistance if you become sick, injured or
disabled overseas. It covers medical expenses you might incur at hospitals or
clinics when away from your national or private health care system.
from countries with national or socialized health plans buy travel health
insurance as a matter of course when travelling outside their home countries,”
said Roy Berger, CEO of MedJet Assist, a medical evacuation provider in
Birmingham, Alabama. “That’s because their national health systems typically
cover them when they are in their own countries only — additional coverage is
necessary when travelling abroad.”
For Americans travelling abroad, most major US health
plans cover costs for emergency treatment only. Basic Medicare (a government health care plan
for senior citizens) does not provide coverage outside the US, but many
Medicare supplement programs do.
you depart, contact your insurance provider and ask if you are covered when
travelling abroad. Get specific -- ask about emergency treatment,
hospitalization, the possibility of long-term care -- and determine what limits
or exclusions apply. Regardless of where you are from, if treated for an
emergency in another country, keep receipts for your medical expenses for
reimbursement you when you return.
Travel agencies, banks and credit card providers
frequently act as insurance brokers and can offer advice on plan specifics. The cost of medical insurance varies
widely depending in the age and physical condition of the traveller, duration
of the trip and destinations.
Infrequent travellers will get the best prices on
policies that cover a single trip only. Frequent travellers should purchase
annual plans that cover multiple trips.
type of health-related insurance covers the cost of medical evacuation, which
can reach into the hundreds of thousands of dollars. If
you are injured or become severely ill abroad, this type of policy will pay for
the high cost of taking an air ambulance back to your home country, or to a
nearby country with better health care than the one you are in. Single trip
policies typically run in the $100 range; annual subscriptions cost
To shop around for a travel insurance policy that suits you
best, talk to a travel agent or see online sites such as insuremytrip.com, oncallinternational.com, squaremouth.com or travelinsurancereview.net.
McGinnis is the business travel columnist for BBC Travel