A lot of travel insurance feels like a scam. As consumers, we're primed to treat insurance and protection packages as a rip off, mainly due to the countless retailers who try to make us pay up by offering to poorly insure shoddy products. Whether it's the extended warranty at Best Buy or rustproofing on a new car, these policies are rarely worth the paper they're printed on.
As travelers, we're no different. We shy away from travel insurance, thinking of it as the lousy clickbait offered by airlines as trip insurance.
In this case it's a sensible attitude gone too far, because these aren't the same products. In fact, for the right person travel insurance can be a borderline invaluable purchase. Anyone traveling particularly far, or for more than a brief vacation, should consider it a necessity. For everyone else, it's worth a look. Here are ten reasons why.
Travel insurance is not to be confused with trip insurance. The former covers issues like airfare and hotel booking fees, while travel insurance generally starts with health care and proceeds from there. Trip insurance is notoriously flawed, covering illness (but only with hospitalization) or money troubles (but only if you can provide a pink slip); it's an overpriced product built not to be used.
Buying this shows judgment similar to a first date at the International House of Pancakes.
Health care coverage, on the other hand, is something you might urgently need. Many health insurance plans stop at the water's edge, meaning that if you get sick or injured while on that grand safari, you're out of pocket for the cost of stitching up a lion wound. This is the biggie: travel insurance is health insurance for Americans overseas. If you'd think twice about crossing the road without Blue Cross, should you really go for two weeks to Australia?
Hospitals aren't always available.
It's a grim but true fact of travel, in many parts of the world doctors struggle to control infection or provide what Americans would consider a basic standard of care. While the hospitals in Bangkok or Mumbai are world-class institutions, you don't want to find yourself with malaria and dependent on the care available on Lombok.
Which is why, depending on travel plans, medical evacuation coverage can be critical.
"There are countless stories that I have over the years of people that were traveling abroad and had a massive heart attack, or a massive bike accident, and they were in a place that they simply weren't comfortable with or wasn't capable of providing treatment," said Andrew Bard, vice president and general manager of Americas Tokyo Marine, a company that specializes in selling travel insurance.
In those cases, he said, medical evacuation is "key," but "the cost to fire up that jet is substantial. At a minimum I'd say you're talking about a $20,000 expense if you don't have insurance."
Best not to get that bill.
Medical bills can bite you two ways. The first, and in the long term the nastiest, is the financial stress of struggling to pay a large bill.
However it can be equally frightening when doctors demand a large up-front cost before providing care. Although different countries call it by different names, the key element is access to cash. How much do you need, how much can you get and what happens if it's not enough?
Don't let that become a problem. Having travel insurance is a way to ensure that your out of pocket expenses are controlled, because there's nothing worse than being alone in a strange land and discovering that you need to get a lot of money... fast.
One of the worst parts of being far from home and ill is the accompanying sense of loneliness. Your support system is across an ocean, your local friends are sympathetic but often helpless, and you struggle to even explain what's wrong with you. It's the latter that can create a real problem.
"If you're in Paris and you get sick and don't speak French," Bard said, "your travel insurance would connect with you to find a local doctor or hospital, [and] make sure they speak English... If you didn't have insurance you'd be charged with finding that doctor alone, and if you didn't find an English speaking doctor, you'd have to figure out how to communicate him."
Communicating "I'll have the soup" is frustrating enough over dinner. Trying to land proper medical care can be a whole different story.
Some drugs are more commonly available outside the United States. In most of the rest of the world, bless them, you can walk into a pharmacy and happily walk out with a packet of antibiotics strong enough to take care of whatever you picked up at the bar last night. (Not the proudest moment, all things considered, for countries that would like to hector the United States over short-term thinking.)
This isn't universally true however, neither for all countries nor for all drugs, and that has the potential to be a real problem for anyone who relies on a prescription. Patients can run out of their meds, or lose them, and if that happens it's good to have a system in place for a replacement.
On your own, a call back to the United States would probably be met with confusion at best and failure at worst. This is a risk, mostly specific to long term travelers. Vacationers who are spending a week or two abroad will probably (most of them) be fine even if they have to skip a few days of pills. Expat or backpackers, though? Those folks need a system in place to make sure that they can get a replacement 'script anywhere in the world.
So far we've only discussed health related issues, because that's the lion's share of travel insurance. For most customers the reason to purchase this coverage is making sure that they're protected in case of illness, and to build in some protections from the special risks associated with traveling.
That's not the only reason to consider these policies however. It depends on where you intend to go, but for people whose plans (or work) will take them to dangerous places, consider the advantages of crisis recovery.
"Bad things happen," Bard said. "For example kidnappings and ransoms, or there's such a thing as someone going to an ATM machine to take out money and having someone approach and say, 'Take out another $1,000.'"
This product would cover that, Bard says.
Few places are as troubled as many people fear. When visiting someplace that has a grounded, realistic reputation for danger, first reconsider going. Then think about insuring yourself... just in case.
This entry is similar, but different enough to warrant its own mention.
Some travelers will already be protected against a crisis. Homeowner's policies, personal protection plans, even (again) some credit cards offer coverage for things like the loss of money or valuables. Most of them, however, carve out an exception for acts of war or terrorism.
Many travel insurance policies do not.
As with crisis insurance, make this call based on reality rather than fear. Few countries will warrant terrorism coverage, but sometimes the risks are real.
All the rage in high end travel these days, concierge services are starting to put the human touch back in travel. Many websites, travel agencies and even a few credit cards offer hotlines that you can call for hotel reservations, restaurant suggestions and help planning a flight.
Now add insurance companies to that list as well.
Much like helping you find a doctor, an insurance concierge can help you find critical information at the right time. Information like where you can find the nearest embassy, bank or police station, or guidance on what to do in case of emergency.
Sometimes knowing who to call at the right moment can be critical.
Up top, we mocked the trip insurance offered by most airlines, and rightfully so. These are policies drafted with terms so ridiculously narrow as to be functionally useless to the average person.
But the fear they play upon is very real. Booking an overseas vacation means sinking a lot of money into fixed costs. Especially in an era where plane tickets are increasingly non-negotiable, that means that a single project at work or bit of undercooked chicken can cost you thousands of dollars.
While more expensive, the right travel insurance plan can offer more comprehensive protection, of a kind you might actually use. It can cover lost luggage, hotel rooms and even airfare in case you have to cancel. This is a highly variable category, but also a pretty useful one if the boss comes down with a case of the Lumberghs.
The final reason to consider travel insurance on your next trip?
It rarely costs more than a few dollars per day, or $12 to $25 per month over the long term.
The reason is because most of the fears listed above simply won't materialize. Short term travelers will very rarely get sick, and even people living abroad for the long run have few emergencies. Kidnappings are rare. Despite the turmoil around the world, the vast majorty of folks who travel abroad come home safe and sound.
As a result travel insurance companies price their products to move.
Like any other insurance plan, then, the calculation is down to how much you pay compared to how much you'll get. For long-term travelers, or those with special concerns, this is a no-brainer. Protect yourself at the rate of next-to-nothing per day. Short-term vacationers, this may or may not be for you.
Still worth taking a look at, though.