What Is Travel Insurance?

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Travel insurance offers protection against costly unexpected mishaps that can occur while a person travels. This type of policy may cover medical expenses stemming from an accident or illness, financial losses due to theft or lost luggage, or even problems caused by missed flights or travel companies going bankrupt. In certain cases, travel insurance comes in very handy, however because the financial risk of each trip can vary, there are times when it’s better to skip it.

Before you decide whether to purchase travel insurance, you should see what coverage you already have. Your renters or homeowners’ policy may cover losses due to theft even if they occur while you’re traveling. Your car insurance may cover you while you’re driving in a foreign country, and your medical insurance may offer some coverage as well. Credit cards and travel club memberships may also protect you from some losses. To avoid duplicating coverage or paying for coverage you don’t need, review all your current policies carefully.

Once you know what coverage you already have, you can look into buying insurance to fill any gaps. To get the best deal, it’s a good idea to use an established insurance company rather than buying directly from a tour operator or travel agent. Be sure to read the fine print as well. Some insurance policies offer primary coverage, but other policies will only pay if your other insurance doesn’t cover a charge. In addition, some policies pay directly, while others offer reimbursement after the fact.

The price for coverage varies, but it can be as much as 10 percent of the cost of your trip. Deciding whether to buy coverage is a very personal decision, but it might help to consider the size of the risk you incur by going without insurance. If the worst that might befall you is a financial irritation, like having to pay change fees to switch flights around if you need to cancel your trip last-minute, it’s probably not worth paying for insurance. Insuring yourself against the potential of paying tens of thousands of dollars for an overseas medical flight, on the other hand, is likely worth the cost.

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