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Travel restrictions and life events cause many people to change or cancel their travel plans. Travel insurance can give consumers peace of mind by protecting their purchase against potential canceled flights or changed itineraries. However; not all policies will cover cancellations for a health scare or bad weather.
When booking a trip for business or leisure, the decision is somewhat risky because it's hard to tell when an unusual event such as a pandemic, war or severe weather will impact the destination you are planning to travel to. Here are some tips to help decide:
Understand the coverage that is provided. Find out what coverage you have on your existing insurance policies by contacting your health and car insurance companies, and your homeowner’s or renter’s insurance providers. Understand the difference between natural disasters, and epidemics and carefully read the language that is in the coverage policy. Find out if you are covered in case of illness or theft, and if that coverage changes if you’re travelling internationally. This is especially important if you or those you are traveling with have health issues.
You may also be able to purchase additional coverage through your current homeowner’s or renter’s insurance policy temporarily in order to protect expensive equipment, jewelry, or other property you plan on taking with you. Contact your current provider to discuss your options.
What type of coverage is offered through your credit card company? If you use a credit card to make major purchases, instead of a debit card, typically there is additional protection for those purchases. If you used a credit card to pay for some, or all of your vacation plans, contact the financial institution to find out what type of coverage is included. You may also have the option of purchasing travel insurance through a credit card company.
So, do you need additional coverage? Once you understand what coverage is offered through your current policies and credit card companies, determine what additional coverage you may need. Are you covered in case of medical emergencies on your trip? What happens if you have to cancel? Consider how much you are spending on the trip, and if you are prepared to take on additional financial burdens if something goes wrong.
What to expect from your coverage. Expect to pay between five to seven percent of the cost of your trip, according to the Insurance Information Institute. Typically travel insurance will cover some or all of the following:
- Trip cancellation or delay;
- Lost or stolen luggage;
- Emergency medical assistance;
- Coverage for rental cars.
Be sure you understand every detail of the agreement including the reason for trip cancellation or delay. Some travel insurance policies will not cover trip cancellation for reasons such as a health scare, terrorist attack, pandemic, or bad weather. Make sure you read the policy thoroughly and don’t be afraid to ask questions.
The difference between trip cancellation insurance and a cancellation waiver. Before buying travel insurance, know the difference between insurance and a cancellation waiver. According to the III, although waivers do provide some trip cancellation protection, they generally include more restrictions.
Always do your research.
Before doing business or making a purchase, always research the company at BBB.org. Look for things like any possible complaints, and customer reviews. For more information, contact your local Better Business Bureau by using the BBB Directory.
For more travel advice, read our tips for planning your next vacation or trip.
Traveling internationally? Check for travel advisories in Canada or around the world by visiting the U.S. Travel Association.
BBB of Northeast California contributed to this article.