Everything You Need to Know About Buying Travel Insurance

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Choosing the right travel insurance can be a difficult task. With so many policies out there and all with differing service and ease of claims, your head might start to spin. Do you like to scuba dive, sky dive, or high dive? You better make sure you're covered for that. Are you carrying expensive electronics? They should be insured if they're lost or stolen.

There's a lot more to choosing the right travel insurance than just finding out how high your hospital bills might be. Let's break down the basics so that you can make an informed decision about which travel insurance is right for you. (See also: The Dirt on Travel Insurance)

Travel Insurance Isn't Just Medical Coverage

Before I get started with the five things you should consider before buying travel insurance, I should clarify that travel insurance can cover you for a lot more than just medical emergencies. Most people who are thinking of buying travel insurance are doing so because they're worried about a hospital visit.

But you can make claims for stolen goods, broken cameras, canceled flights, family emergencies, lost luggage, and so much more. A good travel insurance policy is basically a universal protection plan to ensure that you're covered for whatever the road throws at you.

What Is the Coverage Limit?

When looking at a travel insurance policy, one of the first things you should look for is the maximum coverage limit on the plan. If you're only covered for $5,000, there's not much point. Medical emergencies can cost tens of thousands of dollars, or even hundreds of thousands depending where you are and what happens to you.

A solid plan will cover you for at least $100,000. This limit can go all the way up to $1 million. A high coverage limit is extremely important when choosing travel insurance because if you are injured, fall ill, or need serious medical attention while on the road, you want to make sure that no matter how high the hospital bills are, you won't end up paying out of pocket.

The worst thing that can happen to you in a medical emergency is being stuck in a hospital because of a serious injury or illness and then coming out of it and realizing that you owe thousands of dollars. Make sure your plan has coverage of $100,000 or more.

What Activities Are Covered?

What kind of traveler are you? Will you be doing adventure activities like rock climbing, desert safaris, scuba diving, horseback riding, and mountaineering? You should always check your policy to ensure that you're covered for any activities you plan on partaking in.

You may expect that travel insurance will always cover you for whatever endeavors you get up to while on vacation, but that simply isn't true. Different plans cover different things and the more adventurous you are, the higher your insurance rates will likely be.

World Nomads has some of the best travel insurance for backpackers and long-term travelers. They allow you to start your policy while you're already on the road, they make it easy to make claims, and you can keep your policy going year after year.

The best part is that they cover you for a huge variety of wacky travel activities. Just look at their list of coverage:

What Gear Is Covered?

One of the best parts of a good travel insurance policy is peace of mind, knowing that your electronics and travel gear are covered if lost or stolen. A good travel insurance policy will reimburse you if anything happens to your valuables.

The issue with extra coverage on electronics is that most companies have a pretty tight limit on what they will reimburse you for. Generally $500 is the maximum payout for any lost or stolen electronics. Given that the average laptop costs $1,000 these days, and a camera can be even more than that, $500 doesn't go very far.

If you're traveling with a lot of gear, you may want to consider buying extra insurance through a specified electronics insurance plan. Clements Insurance offers special coverage for your electronics. They'll allow you to make claims on unscheduled receipts up to $10,000, meaning that you don't have to pre-submit your receipts and the cost of your laptop and camera will probably be covered.

Does the Policy Include Emergency Evacuation?

Emergency evacuation and care is an extremely important part of any travel insurance policy. You want to make 100% sure that if you're in a life-threatening situation, you will be covered for medevac, ambulance, and emergency air lift.

The cheapest emergency air ambulance is probably going to cost you $10,000 or more, with international medevacs costing upward of $40,000. That's a purchase you don't want to add to your travel budget.

If you're canyoneering in Utah and you fall and break your leg, your policy should cover your evacuation to the hospital. If you're in Thailand when a tsunami hits and you need to be evacuated to a safe place, your plan should cover that as well. Any good plan should cover a medical evacuation expense of up to $300,000 USD.

There are also times when an evacuation means that you need to be flown from a hospital to your home country. Standard emergency evacuation usually includes this provision, but you should always check with your insurance provider to make sure. Believe me, you don't want to pay for a medevac from Indonesia to the U.S.

How Easy Is It to Make a Claim?

Just because you have travel insurance, doesn't mean that you can easily call them up at a moment's notice, tell them what happened, and they'll send you a check.

The quality of service varies greatly from provider to provider and some make it very difficult and frustrating to make claims. The best companies will allow you to make a claim online and they may have a list of hospitals and clinics that they work with directly so they can pay the bills without you having to pay out of pocket.

Keep in mind that travel insurance companies are just that — companies. They're in the game to make money, so they're not waiting next to the phone, ready to hand out checks to every person who calls in. Even the best travel insurance companies can take a long time to reimburse you.

To try to speed up the inevitably slow process, make sure you have all your receipts, necessary forms, and proper documentation when making the claim, and keep it organized until you have been fully reimbursed.

A Few Other Things to Consider

• Multiple Countries: Some policies only cover you for pre-specified destinations, while others won't cover you at all for countries with government travel advisories.
   
• 24-Hour Emergency Service: If you're having a medical emergency, you want to make sure that your insurance provider will be there to help you, no matter what time of day or night you call in.
   
• Family Emergencies: If you're on a long trip and something happens to a loved one back home, your travel insurance policy should cover your flight home to be with that person.
   
• Flight Cancellation Costs: If you have to pay for a hotel, another flight or some other kind of transportation booking because your airline canceled your flight last minute, your travel insurance should cover the costs.

Do You Need Travel Insurance?

Ask anyone who has been in a medical emergency overseas without coverage. They'll say yes. Ask any traveler who had medical insurance and thanked their lucky stars that they were covered. They'll say yes. A good travel insurance policy will likely only cost you a few dollars a day, but it could potentially save you tens of thousands of dollars if something does end up happening to you or your possessions.

Insurance is the one thing that every traveler should buy before going on a trip, but it's something that you hope you never have to use. Do your research. Find a travel insurance provider that is right for you and make sure your policy covers everything you need.

Have you ever purchased travel insurance? Did you need it?

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