The type of travel insurance you need is dependent on so many things. Here’s how to know you’re buying the right type of travel insurance.23 August 2013
Travelers often ask us what type of travel insurance they need for their particular trip. Essentially, there are three types of travel insurance plans: package plans, travel medical plans, and specialty plans that limit the coverage to specific options such as evacuation/repatriation, car rental, or flight accidents for example.
Most travelers think of travel insurance as the first type – a package plan, which is a comprehensive travel insurance policy that combines a lot of coverage options into a single plan that’s intended to cover all the mishaps and disasters that could occur on a trip. Package plans are the most common type of travel insurance sold, but it’s also the most expensive type of travel insurance – costing between 6 and 8% of a traveler’s total trip cost.
Some travelers don’t need the level of coverage in a package plan – they need a travel medical plan instead – and they can avoid the extra expense that comes with a package plan. The following explains how to determine what type of travel insurance plan you need.
… your travel is domestic, relatively cheap, or outside your health insurance network.
Travel medical insurance plans cover your emergency medical care when you’re traveling outside your health insurance network. Many U.S. based health insurance plans do not cover their members when they leave the U.S. and they apply out-of-network charges for travel outside the health insurance network area, which means the traveler pays a higher portion of the bill.
Essentially, you need a travel medical plan when you’re not worried about recovering your non-refundable trip costs, your trip is relatively inexpensive, and you know you will be outside your health insurance network area (and therefore won’t have coverage for medical care).
The following travelers need a travel medical plan:
Some travel medical plans include benefits that are similar to package plans like minimal trip interruption, coverage for lost or delayed luggage, and even some trip delays. Read our full review of travel medical insurance plans for additional information.
… your travel is expensive, once-in-a-lifetime, or you’re on a budget.
Travel insurance package plans cover a wide range of travel risks, including trip cancellation, travel interruption, emergency medical care, baggage loss, and evacuations as well as features like travel delays, car rental, and more. Cancellations can occur for a number of reasons, and when you want coverage for trip cancellation, you’ll need to buy a package plan.
The following travelers need a travel insurance package plan:
Travel insurance package plans include coverage for travel medical emergencies. Read our full review of package plans for additional information.
… you have a insurance gap you need to cover.
Travel insurance specialty plans are ideal for covering gaps in your insurance. Here are a few examples:
Damian Tysdal is the founder of CoverTrip, and is a licensed agent for travel insurance (MA 1883287). He believes travel insurance should be easier to understand, and started the first travel insurance blog in 2006.