When Should You Buy Travel Insurance?

When should you buy travel insurance? This is a common question we get from our readers, and today we want to give our official recommendation.

You should always have travel insurance.

There are just too many variables when you travel, and you can become injured through no fault of your own.

For example, you can be in real trouble if someone hits the cab you’re riding in or you catch a local variation of a bad flu while in another country. Travel insurance is one of those things that you do not want to cheap out on!

One of our staff members once traveled to Mexico and broke her arm. Had she not purchased travel insurance, then she would have been out a lot money to get a cast locally – or would’ve had to wait until she got back to her home state.

You should always have travel insurance, but what is up for debate is how you get it (eg. credit card travel insurance, work health care plans, or individually purchased travel insurance). We want to focus on the medical/accident portion of the travel insurance world in this article as trip cancellation and interruption are fairly straight forward.

Check out our tips below to help you decide what kind of travel insurance is right for you.

Credit Card Travel Insurance

If you have a credit card with an annual fee of more than $100 and it includes travel insurance, then the coverage is very likely good enough. You should be able to find the detailed insurance policy for your credit card through a quick google search. Here are the key components of the insurance policy that you will want to check:

Emergency Medical. This will cover emergency medical expenses while travelling, and the coverage amount should be at least $1,000,000.

Travel Accident. This will usually cover accidental death and/or dismemberment, and the coverage amount should be at least $200,000.

Car Rental Theft and Damage. This will cover any damage or theft to your rental vehicle, and the coverage amount should be at least $50,000. With car rental insurance, there are a few things you will want to watch out for.

• Eligible Vehicles Types. Most insurances will not cover vehicles such as trucks or vans. Furthermore, they may have restrictions based upon the weight of your vehicle. We have been burnt by this before where we rented a pickup truck, and it got some scratches on it that didn’t end up falling within our coverage. Don’t make the same mistake!

• Third Party Liability. This is usually not included with credit card car rental insurance. Common scenarios where this coverage would be needed would be if you got into an accident and the other party was injured, or if you ran over a street sign and have to reimburse the government for the damage. We would recommend getting this added onto your personal car insurance policy as most policies will allow you to add a component to cover rental vehicles. If at the time of your car rental you don’t have third party liability, then we strongly recommend you purchase this through your car rental company.

One final thing to watch out for is that most credit card travel insurance policies are fifteen days or less. Make sure your credit card policy covers the entire duration of your trip if you are relying on it for your coverage.

Work Health Care Travel Insurance

Your place of employment will likely provide you with some sort of health care plan. This will usually include a travel insurance component for when you’re out-of-state or country. The key components of the insurance policy that you will want to check are the same as the credit card travel insurance:

Emergency Medical. This will cover emergency medical expenses while travelling, and the coverage amount should be at least $1,000,000.

Travel Accident. This will usually cover accidental death and/or dismemberment, and the coverage amount should be at least $200,000.

It is very unlikely that your work health care travel insurance will cover car rentals. If you’re planning on renting a car, then please make sure you either have existing coverage through other insurance policies or buy it from the car rental company.

Individually Purchased Travel Insurance

If you don’t have any travel insurance policies through your credit cards or work, then you will need to buy it on a per trip basis. This is super easy, and you can get it done online in less than ten minutes. This type of insurance policy can also be good if you’re traveling for a long period of time such that the trip duration exceeds your normal coverage.

The cost of medical care while traveling is just too high to take the risk of skipping travel insurance that will likely cost you less than $50.

Similar to previous forms of insurance, you will want to make sure that you have $100,000 for emergency medical and $200,000 for death/dismemberment.

Chances are that your individually purchased travel insurance will not include car rental. If you’re planning on renting a car, then please make sure you either have existing coverage through other insurance policies or buy it from the car rental company.