15 Tips for Buying the Best Travel Insurance Policy

I know. I don’t like having to buy travel insurance either.And I don’t even like talking about it or having to do research and compare the best travel insurance companies.But you are here now, and before I get into my tips for buying the best travel insurance policy, let me just say this,It’s that simple.Let’s face it. You don’t hesitate at purchasing car insurance when you buy a car, or house and contents insurance when you buy a home. So why not travel insurance??Honestly, buying travel insurance can be so cheap it’s a no-brainer. Peace of mind is priceless!I would much rather spend an extra $100 or so for our trip and most likely never use the insurance than wipe out my bank account if something did happen.Call it what you like – vacation insurance, trip insurance or holiday insurance, not having insurance is not worth the risk. Anything can, will, and sometimes goes wrong. If it does and you are not insured, you can be up for a lot of money AND inconvenience.Imagine this.The excitement of your travel departure date is just around the corner, you’ve saved up all your hard earned money, paid for your flights and accommodation, tours are booked, clothes are packed, and your spending money is just waiting to be spent.I bet the mother whose daughter drank a cocktail filled with chemicals in Bali and had to be flown back to Australia at a price of $50,000 would have loved to have had travel insurance.When Caz got struck down with tick-bite fever in South Africa and had several hospital visits we’re glad we had travel insurance.And that time when US immigration lost all our passports in the US, we thought insurance was pretty useful as it saved us from forking out half a grand on replacements.On our trip to Thailand when we left our computer unattended briefly and a cheeky 2-year-old Savannah slammed it down and killed it, we were glad we had insurance – saving us $1,500 to replace it.Better to be safe than sorry, as they say! And for us as a traveling family, there is nothing we want more than to know our children can travel with us somewhat secure.I don’t want to have “I can’t afford the medical bills that can save my child’s life” hanging over my head.
If you are a traveling American, or someone visiting the US, you should definitely NOT skimp on travel medical insurance. Health care costs in the U.S. are ridiculous. So large that people go bankrupt.
TIPS FOR BUYING THE BEST TRAVEL INSURANCE POLICY

1. Firstly, what exactly is travel insurance?

Basically, travel insurance is designed to cover unexpected medical emergencies and events such as trip cancellation, your personal effects, lost, stolen or damaged luggage by an airline, and other related losses incurred while traveling.
Which travel insurance is best for you? There are different levels of coverage depending on:

  1. the plan
  2. the insurance company you purchase with
  3. the size of your deductible (excess)

Some policies offer lower and higher medical expense options; the higher ones are chiefly for countries that have high medical costs, such as the United States!
Note: Travel insurance is not intended to be a substitute for your health insurance policy in your home country. Whilst there is a medical component in your travel insurance policy that can cover a sudden illness or accident, the level of that cover depends on what plan and provider you choose!

2. What AND who are you insuring?

Which travel insurance policy is best for you? Make sure you know what your needs are and your situation:

  • Where are you traveling to?
  • How are you traveling? Flights, rental cars etc. Required coverage will change depending on this
  • What activities will you be doing – Skiing, ski diving, or other adventurous activities?
  • Length of trip
  • Who are you traveling with—single, couple or family?
  • Value of the goods you are taking with you
  • Risk aversion

3. Important Considerations

Extent of coverage

Does the policy cover indemnity only for medical expenses incurred abroad, or can you also obtain reimbursement for medical treatment continued in your home country?

Payout time and requirements

Does the contract require you to submit a written report of the incident within a reasonable time? What supporting documents are you supposed to attach to your claim?

Amount of premium

Are you paying for the right coverage or can you upgrade/downgrade as needed to something that you’re more comfortable paying for?
Available upgrades

How much will it cost to extend the insurance to your baggage? How much to include items that you might buy abroad, such as furniture or paintings?

Alcohol and Drugs

Many policies will be null and void if something happens while you are under the influence of alcohol or drugs!
What isn’t covered?

Most policies do not cover:
  • Sport and adventure activities with a high risk
  • Travel to high-risk countries
  • Pre-existing medical conditions
  • Separate insurance can be purchased for an additional cost for those.
  • Check the Exclusions

Travel insurance policies will have a list of exclusions they won’t cover you for. E.g:

  • Severe weather conditions or natural disasters
  • Acts of god (think Icelandic volcano causing travel chaos)
  • Acts of war, terrorism, uprising or civil commotion
  • Choose a travel insurance policy with the least exclusions, and pay attention to them when reading an insurance policy.
  • Ensure you declare any pre-existing medical conditions you may have.
  • Failure to do so may nullify all coverage. Many policies will not cover pre-existing medical conditions and you may have to purchase an add-on to cover you for this.
  • Be very vigilant in knowing the medical exclusions and conditions for your policies. You do not want to get caught out, especially in countries like America where just one doctor’s visit can cost you close to $300. You’ll faint if you hear the price of a hospital visit there!

5. Should you get travel Insurance for domestic travel?

Enjoying the highlights of the Great Ocean Road in AustraliaWe’ve always purchased international travel insurance, but we never used to purchase domestic travel insurance in Australia.

We have socialized medicine in Australia so we always thought we’d be okay, and in regards to our luggage and equipment we just ran the risk.

That was until we did a quad bike tour near Newcastle and the guide explained to us what could happen if you had an accident. The only rescue would be a helicopter, which if you did not have health or travel insurance would cost around $25,000.

It is completely up to you. You can get policies that can fit in with your health and home insurance so you pay for only what you need.

6. Annual policy or single trip cover?

When searching for the best travel insurance policy you should have a basic idea of your travel habits and plans in advance in order to choose the right policy.

If you know you are going to travel several times within in a year, an annual travel insurance policy (multi-trip policy) covers all your trips and can be far more cost effective – they do have a maximum duration per trip though!
Other wise, stick with a single trip travel insurance policy!

NOTE:

  • Insurance premiums are based on the oldest traveler, and when a traveler turns 65 they hike up premiums.
  • Think carefully before opting for an annual policy for you or the family. If at least one of the travelers is 65 a separate policy for the older traveler may be the best option to avoid everyone else paying over the odds – but still do your calculations.
  • The deductible is the amount of money you pay for expenses before your insurance plan starts to pay. The higher your deductible, the lower your premium will be!
  • So if a claim is needed, you will be paying much more. If no claim is needed then you win as your upfront premium cost is lower.
  • If you take out a low deductible then your premium will be higher, meaning your upfront costs are more but you will end up paying less if you have to make a claim.
  • My comfort level is usually around $100 of deductible/excess. Depending on the travel circumstances though and premium price I will sometimes go for no deductible/excess.

8. How to Reduce Travel Insurance Premiums

A few tips on ways you may be able to reduce your premiums:

Check Your Home Insurance Policy
If traveling domestically, often home insurance policies may include coverage for personal belongings outside your home. This will help you save on travel insurance costs.

Buy Direct and Online

When buying the best travel insurance, it tends to be cheaper online and direct through an insurance provider.

Travel agents and airlines can get staggeringly large commissions from insurers for selling policies, sometimes up to 50%. Do your research just in case you discover an anomaly.

Traveling in a Group

If you are traveling in a group for business or leisure, you could save by purchasing one group policy instead of one policy for each individual.

Customer Loyalty

Check your other insurance providers, e.g. car and house as you could get a discount for a travel policy since you are already a customer.
Remember our Golden Rule, if you don’t ask the answer is always no. You can always highlight their competitor who charges less for the same coverage.

Family Travel Insurance

For families, some of the best travel insurance policies will cover kids for free, like World 2 Cover for Australians.
Credit Cards
Travel cover is a common add-on with select credit cards. Read the fine print and contact your bank to check for details. Obtain written confirmation that you are covered, what the insurance covers, and who to contact in an emergency.
Keep in mind:

  • Credit card travel insurance may not provide medical or evacuation coverage
  • You may have to pay for a higher level credit card in order to get insurance benefits
  • Restrictions on what is covered and the limits
  • You have to pay for the flights or other travel related expenses using that credit card in order to get covered!
  • Also, many basic policies cannot be activated without producing a copy of your credit card and do not cover any business or sporting activities, such as rafting.
  • And it’s not uncommon for the insurance to only last three months and once overseas, coverage cannot be extended. Personally, I would rely on credit card travel insurance.