What kind of travel insurance do I need?

“What should I do about travel insurance?”

That’s a question we get asked on a fairly regular basis and, frankly, I have a hard time answering. It’s because… well, what is travel insurance?

Some people are looking for medical insurance while traveling abroad, others are looking to insure their belongings in case of theft, and still others are looking for trip cancellation insurance in case your trip gets cancelled for some reason. All of the above could be considered “travel insurance.”

Wikipedia defines Travel insurance as insurance that is intended to cover medical expenses, financial default of travel suppliers, and other losses incurred while traveling, either within one’s own country, or internationally.

Travelers list three top reasons for buying travel insurance: Peace of mind, protection against the unexpected, and protecting their trip investment. 

In this post I’ll talk about each type of insurance and give you some resources to help you wade through it all.

Medical Insurance

broken arm in Mexico

My son injured his arm in Mexico and needed a cast. He was treated very well.

Medical insurance is, as far as I’m concerned, essential. Maybe I’m simply looking at it through my American eyes, knowing how outrageously expensive health care is the USA, but I wouldn’t travel without health insurance.

I have friends who argue that it’s not important because the cost of medical care in other countries is reasonable. They feel they will simply pay for their care in those countries and not waste the money on insurance. I can see where they’re coming from and, if you plan to never return to the USA, that could be a reasonable strategy.

However, it’s not an acceptable strategy for me. Although I lived and traveled in various foreign countries for nearly twenty years, I still came back to the USA on vacation. I came back to visit to my family and expose our children to “their” country and I wanted to be able to visit the ER if we needed to. Without some kind of health insurance policy, that would not have been possible.

I also knew – or at least suspected – that if one of us got seriously ill with some kind of long-term illness like cancer, we would want to come back to America to be with family rather than being all alone in a foreign country. That may not prove possible even with insurance, but it for sure wouldn’t be possible without it.

We ended up with a policy from IMG, but look around and see which plan you feel most comfortable with.

 

Evacuation Insurance

I’ve written about the need for medical evacuation insurance before. This generally goes hand-in-hand with your medical insurance, but check to be sure it does. If not, pick up a separate policy – it’s cheap but worth having.

 

Trip Cancellation or Interruption Insurance

Trip cancellation insurance reimburses your pre-paid, non-refundable travel costs when an unforeseen event causes you to cancel your trip. Each policy has different stipulations, but in general they would cover your costs if you needed to cancel your trip due to injury, illness, natural disasters, traffic accidents, terrorism, death of your host, etc…

There is a related, type of insurance that is similar, but different. Trip interruption coverage kicks in after the trip has already started. It will reimburse you for unused travel expenses that you will forfeit if you have to end your trip and return home. It will also cover the cost of your plane ticket home.

Personal Belongings Insurance

luggageI’ve never used this type of coverage, and know very few travelers who do; we just accept the possibility that some or all of our gear will be stolen at some point and have money set aside to replace it. For some travelers, however, it makes sense. If you are a professional photographer and routinely carry equipment worth upwards of $50K, it makes sense to pay for insurance.

Check these policies carefully as there are many loopholes. Double check to know exactly what is covered and what isn’t and under what conditions they’ll pay. I’ve heard more horror stories about this kind of policy than any others but I think the problems stemmed from travelers not understanding the terms of the contract.

For most people who take short vacations, insurance companies sell something called a vacation plan. These plans combine most of the above into one plan, which is a great approach. Unfortunately, vacation plans don’t apply to long-term travelers. They are designed for people who stay home most of the year and take off for a couple week vacation.

books by Nancy Sathre-Vogel

About Nancy Sathre-Vogel

After 21 years as a classroom teacher, Nancy Sathre-Vogel finally woke up and realized that life was too short to spend it all with other people's kids. She and her husband quit their jobs and, together with their twin sons, climbed aboard bicycles to see the world. They enjoyed four years cycling as a family - three of them riding from Alaska to Argentina and one exploring the USA and Mexico. Now they are back in Idaho, putting down roots, enjoying life at home, and living a different type of adventure. It's a fairly sure bet that you'll find her either writing on her computer or creating fantastical pieces with the beads she's collected all over the world.

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6 Responses to What kind of travel insurance do I need?

  1. Justin May 8, 2012 at 3:09 pm #

    I don’t know. I think we are still planning on going with IMG because it allows us to be in the US 6 months out of the year. Although, as you say, I’m quite sure that doesn’t cover everything.

    I still think it’s really helpful to have a good credit card. Good cards today offer coverage for your purchases, lost or damaged bags, auto-rentals, etc.. It’s not perfect, but I would never get personal belongings insurance if I had my credit card. Just not worth it for me. A simple credit card for purchases covers quite a bit.

    I am on the fence a lot as far as health insurance goes. I really have to study up more. I just hate playing that “what if” game, but i’ll agree, in the US it is tough to avoid playing it.

    [Reply]

    Nancy Reply:

    @Justin, I suspect IMG is still the best bet for health coverage for Americans, although it’s not perfect. We never bother with insurance for our stuff – we take very good care of it and haven’t had a whole lot of theft over the years.

    [Reply]

  2. Brent Judge May 11, 2012 at 12:41 pm #

    Hi – admittedly I have a commercial interest and bias, but you may want to check out Azimuth, as we compete with that company and I believe you’ll see our Beacon Series stacks up quite favorably to the other plan. Feel free to contact me if I may answer any questions.

    [Reply]

  3. Trans-Americas Journey May 15, 2012 at 11:31 am #

    Very important (and complicated) issue for most travelers. We embarked on our Trans-Americas Journey with US health coverage. A year or so ago we just couldn’t justify spending the hundreds of dollars a month for something that did us no good in Central and South America where we’re traveling long term. We have benefited from the quality, low-cost health care in this part of the world (including routine dental visits, non-routine dental visits, routine eye exams, x-rays for fractured ribs, an MRI on a hip and consultations with a pain management specialist).

    We DO, however, carry emergency evacuation insurance with On Call International. There are a lot of evacuation insurance choices out there, but we like On Call’s 24/7 nurse on call and their very flexible and reasonable evacuation policies–they’ll get you to a hospital at HOME not just the nearest hospital. Then again, that would mean we’d need US health insurance…

    Like said: complicated issue….

    [Reply]

    Nancy Reply:

    @Trans-Americas Journey, It is a very complicated issue. When John was evacuated from Ethiopia, there was no talk at all about getting him back home – they were trying to get him to the most convenient location. We were OK with that. You’re absolutely right that if they evacuated you to the USA but you didn’t have coverage there, it wouldn’t do a whole lot of good.

    [Reply]

  4. Mike Fields August 8, 2014 at 1:07 pm #

    If you travel by car, a car insurance it’s a most in the check list, because mexican authorities are very picky if an american don’t have proper documentation when driving in Mexico.

    [Reply]

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