What is Travel Insurance?
Travel insurance is a form of financial protection against unforeseen emergencies and extreme expenses that you might incur while on a foreign or domestic trip.
The four major types of travel insurance are: travel health insurance, medical evacuation insurance, trip cancelation insurance and property insurance. Those types can be purchased separately or they can be combined under one policy. Oftentimes, insurance plans can be customized to include only what you need and that may bring the price down.
In addition to picking and choosing the coverage you want, you can choose the amount of time you’d like to be covered. Some plans will only last a few days but there are options that protect travelers over the course of an entire year. The plan you’ll want (if you want travel insurance at all) depends entirely on your situation. You are the best person to decide whether or not you need travel insurance. If you’re 80 years old and going to climb Everest, you probably want to look into medical insurance and medical evacuation options. A travel photographer will likely want to insure their equipment and if you have similar liabilities, you might want to consider insurance, as well.
As far as cost goes, most experts recommend spending between four and 10 percent of the total trip cost. So, if you spent $3,000 and you decide to insure your trip, you should be spending between $120 and $300 on insurance. Any less means you’ll likely be lacking in protection or the policy is a scam and more than 10 percent is typically unnecessary.
As we’ve written before, the popularity of travel insurance has grown in the poor state of the economy, with people eager to protect their hard-earned vacations. At last report, more than 27 million American travelers spent almost $1.8 billion on travel insurance in 2010, according to the U.S. Travel Insurance Association (USTIA). That number is up from $1.6 billion in 2008 and even more so from $1.3 billion in 2006.
When it comes down to it, only you can decide if insurance is necessary. If you decide to get insurance, shop around. Insuremytrip.com and Squaremouth.com are both great tools for browsing policies, just like Kayak.com, they put all the information in one place.
A final piece of advice—when it comes to insurance, the sooner you buy, the better.