Do You Need Travel Insurance - or Does Your Existing Policy Cover You?
May 10, 2014
You are planning to travel and you have options to purchase travel insurance. You may or may not need this coverage, depending on your needs. Many travel-related risks may be covered within policies you already have. Let's look at certain policy types that provide protection while traveling.
Homeowners' Insurance - Don't leave home without it
The good news here is, your homeowner's policy does go beyond your home. Parts of the policy can cover you while traveling. For example, your personal property is covered while traveling, subject to the policy terms. One example where coverage would likely exist is if your property were stolen from your hotel room or vehicle. Nearly all homeowners' policies include coverage in this situation. Another example is liability coverage. If you have an incident where you may have accidently caused injury or property damage to another party, your policy is likely to respond. If you are traveling outside of the U.S. or Canada, contact your agent to see if coverage exists.
Auto Insurance - Limited liability
As long as you are in the U.S. or Canada, you are in good shape. For the most part, your existing coverage will apply when you rent a car. However, if you only have liability coverage, your rental car will not be covered for physical damage; you may need to purchase extra coverage through the rental company. If you are driving someone else's vehicle, their coverage will come in as primary and your liability will come in as secondary. Your policy, however, will probably not cover physical damage to their vehicle. Also make sure to read your policy or check in with your agent on what constitutes a covered vehicle. For example, if you are driving a bus, coverage is not likely to exist in this scenario - nor for vehicles that do not fit your policy's definitions. And if you are driving internationally, you will need to purchase additional coverage.
Life and Accidental Death Insurance - Not just for traveling
Many travel policies include accidental death insurance. However, this is better addressed by purchasing a life or accidental death policy that covers you whether traveling or not. To properly protect yourself, you should have an existing and ongoing policy that does not just apply in a very narrow window of traveling. There are a few problems with this as well. First, it does not look at how much coverage one needs. Travel policies just include a certain and limited amount as part of the package. In most cases, accidental death is covered. But if a death occurred and there was no accident, coverage would not apply.
Health Insurance - Routine vs. emergencies
Most health insurance policies cover you for emergencies anywhere in the world, subject to the applicable deductibles and co-payments. If you are looking to stay an extended period of time in any foreign country and may have routine healthcare needs, then check your plan options to see if you need to purchase an international plan.
Travel Insurance - A range of options
Travel insurance policies often cover a number of potential risks of traveling. For example, trip cancellation coverage will pay you for your trip's cost if you must cancel the trip due to a list of eligible incidents. It may cover you for transportation back home if the incident is covered. It may also cover the cost of delays related to traveling and a number of other relevant costs. Companies that provide travel insurance often offer different packages, usually ranging from a low-cost basic package to a more expensive comprehensive package. While in many cases it's a good idea to purchase these plans, you can save money by preventing or minimizing an overlap with coverage you may already have.
Does it make sense to review your policies before you take your trip? Of course. This is a great time to examine your existing coverage and address any potential overlap with additional plans with your agent. While insurance is very important whether you travel or not, it's even more important