How to Save Money on Travel Insurance

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You’ve booked your flights and hotels, you’ve read all the guidebooks you can get your hands on, even mapped out all of the details of your trip in an itinerary and started planning what you’ll pack. But have you thought of everything?

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In a perfect world, everything will go according to plan and your trip will be smooth sailing. But the world we live in is complex and messy, and things do not always unfold according to our expectations. In many cases, these hiccups are simply part of the thrill that comes with exploring a different part of the world and are a minor bump in the road — even something to laugh about later. But sometimes these changes can be very expensive — trip delays, cancellations, interruptions, lost baggage — leaving you with a big hole in your travel budget and a bad taste in your mouth.

This is why travel insurance is so important. Up front, it’s a small additional cost to fold into the rest of your trip expenses. It may seem unnecessary, like you’re throwing money away. But the peace of mind that comes with knowing you’ll be reimbursed for expenses you incur from travel curveballs is worth it alone — never mind that if you do end up needing it, you’re saving a lot of money in the long run.

There are lot of choices for travel insurance plans out there, and pricing can vary widely. If this is your first time buying travel insurance, the following tips can help you figure out how to get the best deal.

luggageFind out if you already receive discounts on travel insurance.
Ask your employer. Rolled into a benefits package of medical, dental and life insurance is sometimes a small travel insurance policy. Check with the HR manager or benefits administrator of your company; it might already be included, or you might receive a small discount on a plan.

If you’re a student, you can receive discounted travel insurance through STA Travel. Check out rates online, or ask your university’s study abroad office for advice.

Many membership-based organizations also offer travel insurance. If you’re a member of USAA or AAA, you can receive discounted travel insurance via a partner. You can purchase discounted travel insurance plans with membership-based retailers like Costco. If you’re already a member of one of these organizations or retail clubs, you may as well use that to your advantage by saving money with their travel insurance providers! I’m a member of USAA, so I saved money by purchasing insurance through its partner, TravelInsured, at a special USAA rate.

American Express also provides some travel insurance coverage. Cardholders have access to a Global Assist hotline, and if you paid for your trip using your American Express card, you automatically receive some trip protection and baggage insurance.

Don’t buy insurance from a travel booking site as an add-on to your flight or hotel.
You’re much more likely to find a good deal buy doing pricing comparisons yourself, and the best coverage is more likely to be offered by a company that specializes in travel insurance. Be wary of buying travel insurance through a travel agent, as it will probably cost more that way.

Travel insurance would have reimbursed us for our World Cup tickets if interruptions in our trip prevented us from going to the match.

Travel insurance would have reimbursed us for our World Cup tickets if interruptions in our trip prevented us from going to the match.

Understand how much coverage you need. 
Most comprehensive policies offer everything from medical coverage to baggage protection, some even reimbursing you for expenses you might incur when your bags are only delayed by a certain number of hours. The medical is a must because even if you have health insurance at home, anything in another part of the world will be considered “out of network” and could quickly become very, very expensive. If you take any prescription medications, it’s important to make sure your travel insurer will help you cover the cost of replacing them if they get lost.

Many policies will reimburse you for the costs you might incur if your airline cancels your flight or your trip is interrupted for a variety of reasons, including bad weather, illness, a childbirth you need to get back home for, job loss or a work emergency that requires you to get home right away. Many plans also allow you to purchase additional “cancel for any reason” insurance that pays you back if you need to cancel your trip for any reason at all, but this is usually quite pricey — so only buy it if you truly think you need it. Insurance plans already cover trip cancellation for a variety of reasons, so be sure you understand what those are before shelling out for this optional coverage.

You may not want or even need all of this, so it’s important to think carefully about your trip and what kind of circumstances are most likely to arise.

For example, on my recent trip to Brazil for the World Cup, I made sure my travel insurance covered trip cancellations or interruptions due to transportation strikes. Indeed, a few weeks before we left, workers of the airline we’d purchased our flights on were organizing a strike, so it gave me peace of mind to know that even if we had to change our trip in some way, we wouldn’t take a hit financially to do so. I also thought it was nice that my plan paid for additional days of pet care should my flight be delayed on the return home or some other circumstances caused me to come home later than planned. If you pay to board your pet or hire a pet sitter when you travel, this coverage is nice to have!

Travel insurance can help you with the cost of replacing passports and visas if lost or stolen.

Travel insurance can help you with the cost of replacing passports and visas if lost or stolen.

Choose a plan with a low deductible.
The deductible is the amount you’ll pay out of pocket when you file a claim. Depending on your plan, there may be no deductible for certain types of reimbursements (luggage delay, flight changes) or a small one (possibly for medical expenses). Sometimes, travel insurers will have one deductible for any type of reimbursement rather than several different deductibles. Just make sure the cost of what you pay to file a claim isn’t so high that it renders your insurance less valuable. The cheaper the plan, usually the higher the deductible, so remember that when pricing out policies. It’s not just the up-front fee to take out the insurance that you need to compare pricing on.

Adding travel insurance to your trip expenses may seem unnecessary, particularly if you’re on a tight budget — but it’s important to remember that in the event something goes wrong, being insured can actually save you a lot of money. And the peace of mind it buys you is well worth the minor cost.

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