Travel Insurance: Everything You Need To Know

Travel insurance can significantly reduce the financial risks associated with traveling: accidents, lost baggage, missed flights, terrorism, travel-company bankruptcies, theft, and canceled tours. Each traveler’s potential loss differs greatly, depending on the prepaid amount, how refundable or nonrefundable your ticket is, your health condition, the total value of your luggage, and your destination.

If you travel regularly, insurance is an incredible deal. And if you want peace of mind while on your trip, you’ll definitely make travel insurance your number one priority. Take the following considerations into account, explore your options, and travel in style!


Understanding the Basics

The travel insurance menu incorporates five main courses: flight insurance, loss of baggage, medical emergencies, evacuation, and trip cancellation as well as an interruption. But supplemental policies can always be added to cover specific concerns, like identity theft and political evacuation. And instead of purchasing each of them separately, consider getting comprehensive travel insurance that offers all the above services in a single package.

With a reputable Australian travel insurance company, you’ve access to comprehensive packages that act as your primary coverage. However, it’s important to note that insurance premiums vary significantly depending on your age, with most packages costing about 5 to 12 percent of the total trip. Rates increase dramatically for those aged over 50 years, while coverage is generally much affordable for children below 17 years of age.


The Different Types of Coverage

Different travel insurance policies offer different levels of coverage depending on whether you buy the car rental, flight, or hotel directly on your own or via a travel agent. Typically, travel insurance is available in three options; single-trip, multi-trip, and the comprehensive package. Inquire this from your insurer, and always read the fine print carefully to find out what’s covered.

The policies vary significantly from one state to another, and not all insurance firms are licensed in every state. It’s also imperative to note that certain travel insurance policies, particularly trip cancellation coverage, are reimbursement-only.


What Happens If Your Trip Is Cancelled/Interrupted?

Frankly speaking, this is one of the most worthwhile types of coverage. It can be very expensive cancelling or interrupting your prepaid travel. But with only a small fraction of the traveling cost, you can actually reduce the risk of losing money in case something unforeseen gets in the way.

But before purchasing this form of coverage, ensure that you consult with your credit card issuer- yours might be offering limited for flights and tours purchased with the card. Whether you’re traveling independently or an organized tour/cruise, having a trip-cancellation or interruption coverage can be extremely helpful as it will save you from losing the prepaid expenses like your flight and all nonrefundable hotel reservations.


The Bottom-Line

If you’re a frequent traveler, purchasing travel insurance is perhaps one of the biggest investments you can make. Not only does it safeguard you against medical emergencies but it also reduces the financial risk that comes with the loss of luggage, missed flights, trip cancellation, accidents, terrorism, and travel-company bankruptcies.


The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.