Travel Insurance is essential, and everybody should take a look at it, before hitting the road. The right insurance can easily spell the difference between a bargain flight and a financial disaster. On the other hand, many people buy insurance, which they do not need at all. Or, they buy insurance coverage which they already have through their credit card.
There are three general types of travel insurance
Health related insurances covering the risk of sickness or an accident on the road
Luggage insurance
Insurance covering change or cancellation penalties
I want to make a few points for each category.
Travel Health Insurance
People need coverage of medical expenses at home. On the road you need it even more. The first step before buying special health coverage for your trip is a check of the policy of your existing health insurance. On the road you need treatment costs, including expenses for hospitals, and transport back home, to be covered. Very helpful is an emergency phone number, where you can reach somebody familiar with the country you are in. He may know the right doctors, have an idea which hospitals are good, and have a relationship with them allowing for treatment without the need to pay the hospital before you are admitted.
But please check the fine print. Mental illnesses are almost always excluded from coverage. If you have an address in the country you visit, or if you are a citizen of the country you visit, coverage via travel insurance may also be declined.
Luggage Insurance
This type of travel insurance is straightforward. If your luggage gets damaged or lost during your trip, you will be refunded. But check the fine print for excluded items. Expensive gear, like computers, cameras, jewelry and obviously cash are often excluded. There may be also provisions that you cannot leave expensive items in a car, or that some things need to be kept in a safe.
Insurance Covering Change Fees
A classic form of travel insurance covers the costs of changing or canceling a trip for specific reasons. The triggers may include sickness, pregnancy, death of a family member, unexpected unemployment and more. Check the policy of any insurance for these triggers, because they are not always the same.
Before insuring against a change penalty you need to have a hard look, whether it is really helpful. The trick is that insurance premiums are determined by the price you pay for your ticket or vacation package. But, on the other hand, penalties for changing or canceling a ticket are generally lower for higher priced flights and packages. This means, if you do not take care, you may pay 50 Dollars to cover a risk of 120 Dollars in case you need to cancel or change your plan. This does not make sense.
But it is also possible that a policy of no change and no refund allowed is connected to your ticket. In this case, you may lose the whole price you paid for your package, if you become at travel time. Under such rules travel insurance covering change and cancel penalties definitively makes sense
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