Travel is a very liberating experience. Whether you are heading off for a short vacation or making a serious lifestyle change and planning to hit the road long term, traveling is about throwing off the shackles of normal, workaday life, living your dreams and embracing freedom.
That said, not everything about travel can be completely care-free. There are some aspects of it that remain stubbornly mundane and normal. Like making sure you have the finances to fund your adventures, for example. Or buying flight or train tickets. And, yes, buying travel insurance.
Travel insurance is one of those annoying little details that people all to easily and conveniently put to one side when making travel plans. It’s not very glamorous, it’s not very cool, so why should I spend my time on it when I could be finishing off my list of the 10 best beaches I absolutely have to visit or researching the hippest hostels to stay at?
Be that as it may, travel insurance is important. So we thought we would make it easy for you and lay out everything you need to know about it, so when it comes to buying yours you can get it over as quickly as possible and move onto more exciting things.
Travel insurance basics: What it does and why you need it
Let’s start at the beginning. Like any kind of insurance, travel insurance is a form of financial protection which gives you the safety net of a guaranteed payout should any little accidents or mishaps happen while you travel (subject to certain conditions being met, of course). The kind of things travel insurance pays out on include:
- Medical expenses if you fall ill or suffer an injury abroad which requires you to visit a doctor or go to hospital;
- Delays or cancellations to flights or other forms of cancellation;
- Lost luggage;
- Damage or theft to personal property.
- Lost or stolen money and the costs of a replacement passport.
Many seasoned travelers will look at that list and say – none of those things have ever happened to me. And let’s hope they never do. But the thing about having travel insurance is, what if? What if your train is delayed, meaning you miss your flight home? Could you afford to buy a new ticket? What if all your luggage, cash and valuables are lost or stolen, leaving you in just the clothes you are wearing? Are you prepared take the hit on replacing all of that yourself without pay back?
The biggest ‘what if’ of all is about medical treatment. You might think it will never happen to you, but all it takes is one bout of gastric flu or one broken bone while you are abroad,andnot buying travel insurance could have serious financial ramifications. How serious are we talking? Well it is not unusual for a single night in a hospital bed in many countries to cost upwards of US $1000. And that’s before you even start thinking about treatment costs.
Still not convinced? Well here are some example costs for various health treatments around the world to chew over:
- Treatment for pneumonia in South Africa: $40,000
- Treatment for Dengue Fever in Indonesia: $50,000
- Surgery following a jet ski accident in Turkey: $160,000
- Emergency care for a stroke in the US: $1 million.
Types of travel insurance: Single trip versus multi trip
Most travel insurance is sold on the basis of one trip, one policy. Quite logically, this is known as single trip travel insurance. The policy will be valid from your date of departure to the date you return ‘home’ (which is wherever you bought the policy from). There is often a time limit placed on single trip policies, usually somewhere between 12 and 16 weeks.
If you are a regular traveller and tend to go on more than one trip each year, it can be more cost effective to buy annual multi-trip insurance. Instead of restricting you to a specific itinerary in terms of destination and length of travel, an annual multi trip policy will cover you for a whole year for as many trips as you go on in that time frame. Bear in mind that the time limit on each individual trip is usually less than that placed on single trip policies, although there is often the option to upgrade. Most multi trip policies will also have a limit on the total amount of time you can spend abroad each year, normally around six months.
If you plan to travel long term, you will need to look for a specialist extended term policy or a ‘round the world’ policy.
Added extras: Beyond standard cover
Insurance is all about assessing and managing risk, and if an insurance provider thinks there is an increased chance of having to pay out on a policy for you, they will ask you to pay more. With travel insurance, the biggest pay out risk is medical costs, so anything that increases the chances of someone making a medical claim will lead to a higher premium.
This means that if you plan, for example, to go skiing or snowboarding on your travels, you will have to pay extra for your insurance because you are a higher injury risk. You also have to be careful about taking part in extreme sports like bungee jumping, jet skiing or quad biking. These are the sort of things people do on a whim, but if you get injured, your standard travel insurance policy is unlikely to cover you. If you think you might want to do these sorts of things, it is a good idea to buy a bolt-on addition to your plan.
Finally, if you have a pre-existing medical condition, you must declare this when buying travel insurance. Again, this is because you are considered at a higher risk of making a claim. Some insurers will not offer cover and you are best off seeking specialist providers who underwrite bespoke policies for different conditions. Not declaring a medical condition and buying standard insurance will make the policy invalid if you need to make a medical claim.