How Does Travel Insurance Protect From 5 Financial Risks
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5 Risks That Travel Insurance Can Help Protect

Updated on August 18, 2020 01:02 pm
Insurance Risks

Travel insurance can protect you from various financial risks of traveling such as terrorist attacks, accidents, illness, missed flights, canceled tours, lost or damaged baggage, theft or burglary, emergency evacuation, and even death.

Most of the travel insurance policies are designed to be comprehensive to protect travelers from any risk that may cause a financial loss before or during the trip. Typical travel insurance should cover all the risks that a traveler may be exposed to.

Complete Guide: How To Buy Visitors Insurance

However, It is important to understand that Insurance works on the concept of probability. The probability of risk in the destination country, the travel, or the trip itself will determine the coverage and the cost of travel insurance.

Here are 5 types of financial risks travel insurance can protect you from:

Cancellation Risk

You may have heard this before but life is not certain. Cancellation or trip interruption is inevitable. There are unavoidable reasons that can compel you to cancel your long overdue trip or your well-planned getaway.

Cancellation or interruption means you will lose the time you had invested in planning for that trip. Which is why Travel Insurance is your savior. With Trip Cancellation coverage, you can protect all of your prepaid and non-refundable trip expenses. That way at least your money is not lost.

Most travel insurance companies will refund 100% of your trip expenses if you cancel your trip before leaving for a reason covered by your policy. The common reasons include:

  • Illness or death of you, a family member, or a travel companion 
  • Extreme weather
  • Terrorist attacks

Delay Risk

If your flight has been delayed or you have missed a connecting flight for any other reason, that is outside of your control, travel insurance can cover your financial loss. Some common reasons include:

  • Extreme weather conditions
  • Natural disasters
  • Mechanical breakdown of your plane
  • Accident on your way to the airport

Do you know how easy it is to renew your visitor's insurance?

Emergency Medical Risk

Travel insurance offers protection against financial risks and covers the cost of your medical expenses if you fall sick or get injured while traveling.

Medical coverage offers primarily two main travel insurance benefits:

Medical Expenses: In case of a medical emergency, travel medical insurance will reimburse you for the cost associated with medical treatment for an illness or injury during your trip. This includes expenses for physicians' fees, ambulance services, and hospital charges, among other expenses. This is particularly useful for when elderly parents are traveling to the US. 

Also Read: 7 Primary Reasons Why Visitors Insurance Is A Must For Parents

Emergency Medical Evacuation: Under this coverage, you will have transportation to the nearest hospital, and can be evacuated from the danger area or brought home depending on the severity of your emergency and the standard of healthcare in your destination country. Emergency evacuation also can include air ambulances expenses or other expenses due to natural calamities or terrorist activities.

Delayed/Lost Baggage Risk 

Travel insurance provides cover against delay, loss, damage, or theft of personal items such as baggage and passport.

Baggage loss

Depending on your travel insurance plan, you can claim a refund to purchase clothes and other essentials after 12-24 hours, If your luggage has been delayed. And if your baggage is permanently lost or damaged, you can claim reimbursement to replace the lost items.

Home Burglary Risk

Some travel insurance also covers home break-ins and burglary while you are away on vacation. This type of policy is gaining popularity in countries like India. With insurance that covers home burglary, you can travel freely knowing that if your house falls prey to burglars, your travel insurance will provide you a sum of the insured amount as compensation towards the financial loss.

To protect your money from theft or pickpockets during the trip, carry An Anti-Theft Bag. More tips to keep your money safe while traveling abroad.

Unconventional Risk

If you have to cancel your trip for some unconventional reason but generic travel insurance will not cover it, upgrade to Cancel for any reason insurance plan. This upgrade is comparatively expensive but it is flexible and you can get reimbursement for refundable trip costs and certain non-refundable deposits.

In conclusion, Travel Insurance is your best travel buddy that will help you travel with peace of mind knowing that when things are not in your favor, you have a backup. However, as we have seen, different insurance providers have different coverage plans.

Each traveler's potential loss and risk thereof varies, depending on multiple factors such as: 

  • Non-refundability 
  • Age of the traveler
  • Pre-existing conditions
  • Value of your luggage or baggage
  • Other additional insurance benefits you may already have from your existing health insurance, life insurance, renters' insurance, and credit card issuer 

Take these factors into account, understand your options, and make sure that you have evaluated the best insurance plan for yourself before traveling.

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