When going on a vacation, the last thing you want is to worry about falling sick or getting injured and spending your hard-earned money on medical bills. While illness and accidents can happen anywhere, they waste both time and money when they occur during a limited-time vacation.
That’s where travel insurance plays its role in reducing your losses. Travel insurance is an insurance category that protects you while you are travelling. Travel insurance helps to protect travellers from most unexpected expenses if something goes wrong while away from home.
This guide will discuss what travel insurance is and how it is useful for travellers.
What Is Travel Insurance?
What is travel insurance? Travel insurance is insurance coverage that we buy for an upcoming trip. It is designed to protect us against travel delays, flight cancellations, flight mix-ups, issues with baggage like delayed and lost luggage, and medical treatment.
The cost of travel insurance depends on multiple factors, like where you are from, the total expenses of the trip, the traveller’s age, dates of departure and return, and the initial premium paid. Travel plans can be as cost-effective as a few hundred rupees a day.
For more details, check out our article Travel Insurance 101: Understanding the Basics for Pakistani Travelers
How Does Travel Insurance Work?
Travel insurance works by repaying you for all expenses made during the interruption in your trip. For instance, if you miss a flight, travel insurance will compensate you for the missed or additional cost of a new flight you booked. Travel insurance will reimburse you for expenses incurred in case of lost luggage or medical emergencies. Travel insurance can also provide cover for trip cancellations and delays.
Common Benefits Covered by Travel Insurance
Travel insurance can be difficult to shop for since there are multiple benefits and coverage clauses to include. Common travel insurance benefits are:
- General Travel Protection, like Trip Cancellations, Travel Delay Benefits, and Interruption Coverage
- Missed Connections and Change over Fees
- Reimbursement of Miles or Reward Points
- Delayed Baggage or Lost Baggage Insurance and Personal Property
- Pre-Existing Condition Waivers
- Accident and Sickness Medical Bills (COVID coverage)
- Emergency Medical Evacuation Coverage
- Comprehensive Coverage for Emergency Medical Care
- Common Carrier Accidental Death & Dismemberment (Flight Accident Insurance)
- Search and Rescues
- Sports Equipment Renters and Rental Car Insurance
- Cancel for Any Reason Coverage (best plan if you want to cancel a trip with limited termination provisions)
Travel Coverage Types
There are two basic types of travel insurance policies:
- Trip cancellation and trip interruption coverage (Domestic Trips)
- Travel medical insurance. This is basically health insurance for international trips. This is an option suited for anyone travelling internationally.
Travel Insurance is Important Because….
A comprehensive travel insurance plan typically offers emergency travel assistance services and concierge services to you while on your trip 24 hours a day, seven days a week,
Travel insurance is slowly becoming an essential part of travel plans for any traveller. It provides coverage for unexpected medical emergencies. Medical costs can be high in many countries, and even more for Pakistani. A simple trip to a hospital emergency can rapidly add up to high charges, which will affect your budget. Travel insurance can relieve you of such costs while ensuring that you receive all necessary medical care.
Travel insurance commonly covers issues that cause trip cancellations or delays. For instance, family emergencies cause a genuine need for someone to cancel their trip due to unexpected circumstances, like sickness or a natural disaster. In such cases, travel insurance will compensate for most expenses related to your trip.
Similarly, suppose a traveller experiences any issue that results in a trip interruption, which is under the insurance cover, e.g., flight delays or cancellation. In that case, travel insurance can offer compensation for additional expenses incurred due to these factors.
For more details, visit our blog, The Benefits of Buying Travel Insurance Before Your Trip
Buying Travel Insurance
Travel insurance offers us peace of mind and a sense of security when travelling. Knowing that you are covered against financial loss in case of an emergency or unexpected event can allow you to relax and enjoy your trip without worrying about the economic consequences of something going wrong.
Like in any financial contract, it is essential to go over the terms and conditions of your travel insurance policy in detail to know what is and isn’t covered. Some guidelines may have exclusions or limitations on coverage, so it’s important to ask questions and clarify any concerns before you finalize a policy.
Similarly, some regions have restrictions on coverage and exclusions.
Travel insurance is necessary for anyone planning to travel, as it protects against unforeseen events and can save you from potentially disastrous financial losses. Whether planning a short trip or an extended stay in a foreign country, investing in travel insurance is a smart and responsible choice.
Things to Do
When picking a travel insurance option, you need to be aware of the usual insurance buying checklist. You need to:
- Read the policy document,
- Compare different plans and policies from different companies.
- Ask about coverage clauses and exemptions.
- Ask about network associations with your travel destinations to see how well you will be covered there.
As a traveller you need to get a comprehensive travel insurance policy that covers the most common travel issues and reimburses you for them on time.
Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.
