Travelling is supposed to be a worry free break from everyday life. But every now and again, we’re brought back down to earth with travel delays, lost luggage, an inopportune hospital visit or a fender bender with our rental car. That’s why travel insurance is essential to protect the significant investment people have placed in their increasingly expensive vacations, not to mention the potential catastrophic impact of an uncovered hospital stay out of country.
hile necessary, travel insurance is expensive. However, many of us have some insurance coverages embedded as add-ons to some of our main insurance policies. Knowing which coverages you have before buying additional coverage is essential to saving. For example, many car insurance policies already cover you for car rental insurance. Many health insurance policies already cover you for out of country travel medical coverage.
However, there is one resource many people have already paid for that offer a turn-key roster of travel insurance coverage. Travel credit cards, especially premium cards with annual fees, tend to offer a comprehensive suite of travel insurance coverage for almost every need.
Some premium travel credit cards offer travel medical, trip cancellation, trip interruption, flight delay, car rental, lost baggage, motel/hotel burglary, accidental death, and purchase protection. The total value ofthose coverages could be between $500-$750 depending on the size of your family and travel habits. Travel credit cards have basically acted like miniature travel insurance brokers on behalf of cardholders, aggregating the most important coverages and negotiating the best terms.
That said, not all travel credit card insurance coverages are alike. Here are a few of the key terms you should review to determine the value of each coverage type:
- Travel Medical: Look for the number of consecutive days of coverage. Most cards range from 15-25 days. Also look for the maximum age of those covered, with most being at 65. Look for the maximum amount of coverage available, is it $500,000 or $2,000,000?
Lastly, look for exclusions. For example if you travel while in your last trimester of pregnancy, you may not be covered for hospital costs. If you travel with a known medical condition, prior to your trip, you may not be covered for medical costs arising from that condition while on vacation. Assume your insurance company will have complete access to your medical records, because they will if you want your claim to be paid.
- Car Rental Insurance: Most credit card car rental insurance covers you for damages caused to the rental car. However, to the extent you injure someone else, you’ll need separate 3rd liability insurance. Often times your car insurance, should have, offers 3rd party liability insurance for both your car and rental cars. If you don’t have it, you’ll have to get it elsewhere or at the car rental agency.
Some car rental insurance offers coverage for the theft of personal effects. Many do not. But if yours does, if your rental car gets broken into and someone steals your sun glasses or iphone, you’ll be covered.
Lastly, make sure your car rental insurance covers you in the country of your destination. There are some countries, where many credit card issuers do not cover car rental insurance, such as Australia, Italy, Ireland and Israel.
Overall, travel credit cards offer a great opportunity for travelers to get a comprehensive suite of travel insurance coverage. Just make sure you’re getting coverage that meets your particular situation so you don’t end up with a nasty little bill you thought would end up in someone else’s mail box.