Travel Insurance 101

What is travel insurance?

Travel insurance is an all encompassing insurance you buy specifically for traveling.  It's not connected to whatever medical or home insurance you have back home.

It covers everything from medical costs, flight cancellations, theft, lost baggage and everything in between.

Do I really need it?

As a budget traveler, it's hard to fork out money for something that seems unnecessary.  I mean, what are the odds you're going to need the insurance, right?

Well, there are too many stories out there from travelers who had to pay thousands of dollars out of pocket because something bad happened on their trip and they didn't have travel insurance.

Think of it as paying for piece of mind.  If something bad does happen like a robbery or illness, your trip won't be financially devastated.

What about my credit card?

Credit cards offer limited protection when you're traveling.  Their coverage limits are usually pretty low so you'll still be out of pocket for the rest of the costs you incur.

Also, while they offer some coverage on lost and stolen items, medical expenses and trip cancellation, they won't cover you for anything else like an airlift evacuation or a bereavement return flight home.
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Get the right coverage

Some plans will cover you for everything while others only offer basic coverage and options to upgrade for other things.  Make sure you're covered and read the fine print.

1) Medical insurance

If you become sick while traveling or have a medical emergency you'll be covered for the costs you may incur like ambulance costs and hospital services.

2) Trip cancellation

Covers you if you have to cancel your trip for unforeseen reasons like sickness, weather or legal obligations.

3) Lost or stolen bags

If your bag is temporarily lost, you'll be reimbursed for essential things you need to buy like clothes or medicine.  In the case that your bag is stolen you'll also be covered for any losses.

4) Flight insurance

This covers you in the event your flight is delayed or cancelled due to weather, mechanical breakdowns, labor strikes or something else.  Extra fees you incur because of the delay or cancellation will be covered.

Read the fine print

Before you purchase your policy, it's important to read the fine print and see what isn't covered and what your deductibles are.

For example, if you were drunk and careless with your stuff, chances are they won't cover you when it gets stolen.  If you injure yourself while high out of your mind, you also won't be covered.  You also may not be covered for third party liability things like injuring someone while driving.

So, make sure you read the fine print and know what is and isn't covered in your travel insurance policy.

Travel Tip
If you’re planning on doing extreme adventures like skydiving or rock climbing, you’ll probably need to purchase a special option for that added to your basic insurance policy.

Making a claim

Always keep in mind that rule number one for insurance companies is that they're there to make money.  So, with that in mind, just know that they'll try to avoid paying you as much as they can.

Make sure you have all the receipts and documentation that you require to submit your claim.  Also, make sure any necessary forms you need have been filled out.

Once you file your claim be prepared to wait for reimbursement.  Companies will drag their feet when they're doling out their money to you.

Be patient and let the process work.
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How To Plan Your First Euro Trip
Backpacking Europe: Everything You Need To Know
Beware The Schengen Agreement
The Ultimate Backpacking Pack List
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