Travel insurance is insurance that is intended to cover medical expenses, trip cancellation, lost luggage, flight accident and other losses incurred while traveling,
Travel insurance can usually arrange at the time of the booking of a trip to cover exactly the duration of that trip, or a “multi-trip” policy can cover an unlimited number of trips within a set time frame. Some policies offer lower and higher medical-expense options; the higher ones are chiefly for countries that have high medical costs, such as the United States.
Some credit card issuers offer automatic travel insurance if travel arrangements paid for using their credit cards, but these policies are generic and particular care must take to take into account personal requirements. There are many travel insurance policies available in the marketplace, but care must take of what events covered by each policy, and what exclusions, exceptions and limits apply, besides other issues.
The most common risks that covered by travel insurance plans are:
- Medical treatment, including transportation to the medical facility.
- Cancellation, curtailment and trip interruption
This section covers any unused travel and or accommodation costs, pre-paid charges (including any additional travel expenses incurred, provided they deemed reasonable and necessary) if a trip canceled or cut short under a variety of circumstances, which may include any of the following, depending on the policy:
- death, bodily injury, illness, disease, or pregnancy complications
- compulsory quarantine
- jury service
- being called as the witness
- termination of employment (provided you did not know about it before you booked the holiday)
- being called up if you are a member of the armed forces or other public defense or safety organization
- prohibition of travel by the government to the intended destination
- officially recommended evacuation from the intended destination
- the official advisory against going to or remaining at the intended destination
- death or serious illness of a family member (subject to age restrictions).
- Repatriation of remains
- Return of a minor
- Trip cancellation
- Trip interruption
- Visitor health insurance
- Accidental death, injury or disablement benefit
- Overseas funeral expenses
- Lost, stolen or damaged baggage, personal effects or travel documents
- Delayed baggage (and emergency replacement of essential items)
- Flight connection missed due to airline rescheduling or delay.
- Travel delays due to weather
Medical expense coverage can be per-occurrence or maximum-limit.
Some travel policies will also provide cover for additional costs, although these vary widely between providers. Almost $2 billion in travel insurance sold each year.
In addition, often separate insurance can purchased for specific costs such as:
- Pre-existing conditions (e.g. asthma, diabetes)
- Sports with an element of risk (e.g. skiing, mountain climbing, scuba diving)
- Travel to high-risk countries (e.g. due to war, natural disasters or acts of terrorism)
- Additional AD&D coverage
- Rental Car Coverage
- Cancel for Any Reason Coverage
- 3rd party supplier insolvency (e.g. the hotel or airline to which you made non-refundable pre-payments has gone into administration)
- Acute onset of pre-existing conditions
- Specific event coverage, (e.g., to cover travel cancellation costs if the reason the person is traveling, such as a concert, canceled. )
Certain countries will require that you have purchased sufficient coverage should something happen while you are traveling to that country. Those governments do not want to burdened with the costs of your medical care and will require you to have a suitable plan meeting certain minimum requirements.
- Students traveling to the USA required to have a qualified plan during their period of study
- Depending on the length of stay, travelers to countries in the Schengen area) are required to prove they have sufficient insurance at the time of their visa application
- Health insurance is mandatory for visitors to enter the UAE (Dubai, Abu Dhabi etc) and require a visit or tourist visa
- Companies running group tours often require insurance, as do many cruise companies.
- Generally, most countries where you are applying for a visa are likely to also require a minimum level of travel insurance.
The common exclusions in travel insurance policies include pre-existing medical conditions, unlicensed operation of a vehicle, traveling for the purpose of receiving medical treatment, elective surgery or treatment, or injury or illness caused by alcohol, drug use, or reckless behavior, including engaging in some sporting activities. Events arising from war and terrorism usually excluded, but most policies allow trip cancellation arising from war or an act of terrorism that meets the policy’s criteria.
Insurance companies issuing new policies will often exclude circumstances based on an ongoing event, such as typhoons or floods. Long-term exclusions may be announced for events such a Bali’s Mt Agung volcano being excluded from cover for the foreseeable future, (as of late 2017).
Some policies exclude travel to certain countries, or parts of countries, where a greater risk expected. These determinations are often made based on official government travel advice from organizations such as the US State Department or the Australian Department of Foreign Affairs.
Travel insurance can also provide helpful services, often 24 hours a day, 7 days a week that can include concierge services and emergency travel assistance. Pre-existing medical conditions must declare prior to the trip start date. The European Health Insurance Card (EHIC) entitles to treatment in state-run hospitals in EU countries and Iceland, Norway, Liechtenstein, and Switzerland, but it is not a substitute for travel insurance.