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Choosing Budget Travel Insurance

How to Choose the Right Policy for Your Trip

By

Greg Rodgers rock climbing

Your budget travel insurance probably won't cover solo rock climbing!

Photo by Greg Rodgers

No one likes to think about a great trip to Asia being interrupted, but it does happen. Budget travel insurance covers you while you are abroad; it may pay for itself if your bags are lost or stolen, or you get hit by a distracted tuk-tuk driver!

Fortunately, travel insurance is much cheaper than regular health insurance for Americans. Read on to learn what to look for in a policy before deciding on coverage.

What is Budget Travel Insurance?

Travel insurance is a policy that covers you in case you get hurt or robbed while traveling abroad. Chances are that your regular health insurance will not cover you once you leave your home country. Travel insurance fills the gap to keep you protected until you return home.

In addition to adding a little peace of mind in case you get injured, travel insurance also covers incidents such as bag theft or delay at the airport, unexpected trip cancellation (e.g., a family member becomes ill just before you leave), and even emergency evacuation to get you home if needed.

Do You Need Travel Insurance?

The short answer: Yes. Sometimes things don't always go as planned, particularly in developing countries, and your trusty first aid kit may not be enough. You'll appreciate the peace of mind once you take a bus ride or two in Asia's mountainous roads!

Also, you will probably be far more active on a trip to Asia than you are at home. Your time will be spent outdoors, crossing roads in busy cities, and enjoying a little adventure. Travel inherently increases your chances of getting hurt, more than sitting in the living room, office, or restaurants at home.

Before Purchasing Budget Travel Insurance

First, figure out if you are already covered for some incidents:

  • Some home owner's or renter's insurance policies may offer a little coverage -- usually $500 -- for your valuables while traveling.
  • Some credit cards will offer trip interruption and coverage for baggage if you purchased your flight with them.

Considerations Before Choosing a Policy

  • Trip Protection: Nearly every policy includes some level of trip protection in case that you are delayed or have to cancel your trip. Read about Rule 240 and your rights for unexpected delays while flying.
  • Emergency Evacuation: Your travel insurance should cover you in the event that you are sick and injured to the point that you need to return home. Sometimes this requires a costly charter flight with doctor on board, so aim for policies with at least $100,000 coverage for evacuation.
  • Lost or Stolen Property: Most policies will cover your electronics and valuables, however, the claims process is usually strict to prevent abuse. Read the fine print and understand the process for claiming losses carefully!
  • Extreme Sports: Find out in advance what qualifies as an 'extreme sport' before you make a purchase.

Adventure Travel and Extreme Sports

By default, many travel insurance policies exclude coverage for what they consider to be 'high-risk' activities. Extreme sports doesn't have to mean bungee jumping; some insurers claim that hiking, boating, and riding a motorbike are too dangerous. Depending on what you plan to do, read the policy fine print to see if that scuba diving or trek you have planned is covered.

Most policies will allow you to cover your adventure travel with an upgrade that costs a little extra.

Tip: A majority of budget travel insurance policies do not cover riding motorbikes -- an activity that is common in Asia.

How to Choose Budget Travel Insurance?

Not surprisingly, a confusing array of policies, providers, and options exist for travelers wanting to get insured. Travel Guard is a leading travel insurance provider in the US. Their website clearly defines what is and is not covered for various policies, and adventurous travelers can easily purchase extreme sports coverage.

Compare prices on travel insurance policies.

Know How to Use Your Travel Insurance

Big insurance companies can earn a profit because so few travelers take advantage of their policies or incorrectly make claims which are denied.

  • Immediately after purchasing your policy, print out a copy to carry with you on your trip. Make sure you have international contact numbers for making a claim, as toll-free numbers may not work from outside the US.
  • Print the card with policy numbers and emergency contact lines; carry it in your money belt or wallet at all times in case you are injured away from the hotel.
  • Read the policy and know in advance how to make a claim in case you are robbed or injured.
  • Check to see if a police report is required to make a claim -- it probably is. You'll need to navigate the local process for getting a formal police report right away after an incident.
  • Find out if you must pre-approve medical treatment and if you must go to specific clinics.
  • See what the time limit is for reporting a claim. Many policies require that an incident must be reported between 24 - 48 hours after it occurred, so waiting until you return home is not an option.
  • Know if receipts for your phone, camera, laptop, or other valuables are required to make a claim. If so, make copies and leave them with a loved one that can fax them to your insurer.
  • Record the model numbers, serial numbers, and even take pictures of valuable electronics you plan to carry on your trip.
  • If you plan to rent cars while away, find out if your budget travel insurance covers rentals so that you can decline the additional insurance when renting.
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