A recent survey reports that consumers are more positive about their ability to afford to travel this year. If you are planning a trip in the U.S. or out of the country, it is important to know about travel insurance and how it relates to your homeowner and medical coverage, and especially, how to handle the unexpected after your plans have been made, before you even leave.
Your homeowner insurance provides coverage for personal property anywhere in the world. The limit is 10 percent of the amount listed in your policy for personal property, which on average would be $15,000, more or less.
The real concern could happen before you even pack your bags. Trip cancellation insurance protects you against losing money when an unexpected event causes you to cancel your trip. The most common “covered reasons” for trip cancellation include the following:
- You, a traveling companion, an immediate family member or a business partner becomes sick or even dies, causing the trip to be cancelled
- An unfortunate situation of having your home damaged by a hurricane or tornado and you need to be available to handle the situation
- You or your traveling companion could be called for jury duty or active military service
- You lose your job and can no longer afford the trip
- Or one of the more realistic concerns in today’s world—a terrorist incident occurs in a city on your itinerary.
Some policies include more specialized covered reasons: financial default of a tour operator, cruise line or airline; or legal separation or divorce which happens after your policy effective date and before the departure date. Unfortunately, there is no coverage for relationship deterioration once the trip begins…
Medical coverage should be included. Medicare does not provide any coverage for hospital or medical costs outside the United States. If you carry Medicare Supplement Plan J, there is coverage—in the first 60 days of each trip outside the U.S., you pay the first $250, and your plan would pay 80 percent of a lifetime maximum benefit of $50,000. You would pay the 20 percent of that $50,000 and the remainder of costs.
Many health insurance policies include medically necessary emergency care services. For example, foreign travel coverage would be for emergency only, with a lifetime maximum benefit of $100,000.
There are other things to consider—many foreign doctors and hospitals require payment in cash prior to providing service, or if you do have coverage, it may not pay for medical evacuation back to the United States, which can cost $10,000.
A common rule of thumb says, “If the cost of the trip is more than you’re willing to lose, buy insurance.” You should decide what part of travel insurance you will need and buy the insurance as soon as you make the down payment on the trip. The cost of travel insurance is five to eight percent of the cost of the trip, and you can get information from your travel agent or online, where you can compare rates.
Just as with life insurance, your journey will be less stressful when you plan for the unexpected with trip insurance. iBi
