When Do You Need Travel Insurance?


Lost luggage, delayed departures, emergency evacuations: You are bound to experience some kind of mishap when you’re traveling for vacation, business, adventure, education or volunteering. Travel insurance is one way to protect your pocket from these unexpected, expensive events. It’s not right for every traveler, but here’s a guide to when it could be right for you.

You travel frequently for business.

Consider the regularity and location of your trips when deciding whether to purchase travel insurance, says Joe Bates, vice president of research for the Global Business Travel Association (GBTA). If you fly frequently for business, you are more likely to encounter a travel mishap, especially one that’s airline-related. About 75% of business travelers encounter mishaps such as delayed or canceled flights, hotel rebookings, missed connections and lost items on the way to their destination, according to a 2013 GBTA study.

Some companies provide travel insurance for their employees, but many do not. However, a 2014 GBTA study found that it makes financial sense for business travelers to have insurance, whether it’s provided by employers or paid for by the travelers themselves. Each negative trip experience costs an average of $1,475, 55% of which falls on the company and 45% of which falls to the individual. Travel insurance can help reduce these costs for both parties.

Employers and individuals alike can purchase business travel insurance to defray the cost of company trip mishaps including interruptions, delays, missing baggage and medical expenses.

You are a student studying in a foreign country.

Many students take advantage of opportunities to study abroad. Because these trips usually last for long periods in unfamiliar countries, it’s smart to have insurance so both students and their parents have peace of mind.

It’s a best practice for study abroad programs to offer travel insurance, says Nancy Osborne, a health, safety and emergency response analyst for the University of California Education Abroad Program. Osborne advises students to check with their trip organizer to see whether insurance is included before purchasing it on their own.

The UC program and many other study abroad programs offer insurance that covers medical treatment, emergency evacuations, lost baggage and personal property, trip cancellations, delays and travel assistance, which can include 24/7 support for emergencies, and interpretation and translation needs. Osborne says UC students take advantage of all of these services, including evacuations.

“We had students that were in Egypt during the Arab Spring and so all of our students there were evacuated from the country,” she says, adding that other students have had to be airlifted from remote locations such as Costa Rica after breaking their ankles on excursions.

Your health insurance doesn’t cover you abroad.

While some medical insurance plans include international health visits, other policies, including Medicare, do not. If your plan does not cover foreign health care, or if your international health care options are limited, consider buying travel insurance that includes health care. You have two options: primary, which covers everything, and secondary, which covers only expenses that your main health insurance provider doesn’t. Travelers can also opt to purchase plans for specific situations, like emergency medical evacuation insurance.

You can’t afford not to have insurance.

Linda Kundell, spokeswoman for the United States Travel Insurance Association, says you should consider three things when deciding whether to buy travel insurance: the amount of risk you’re willing to take, the amount of money you could lose, and the amount of money you are willing to accept losing.

Still, there are times when you probably don’t need travel insurance, such as driving to visit a relative in the U.S., says Kundell. This type of trip carries far less risk than flying across the world, so travel insurance is not necessary. Travel insurance can be redundant because car, health and life insurance policies that you already have often cover aspects of travel. Additionally, many credit cards including Visa Signature, World MasterCard, American Express and Discover Escape offer free travel insurance.

So for all you globetrotters, travel insurance could be a good investment in your health and safety. But for you road trippers, it’s probably best to just use caution and stick to your primary insurance providers.

The article When Do You Need Travel Insurance? originally appeared on NerdWallet.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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