S3, E16: Replay: Your Ultimate Guide to Travel Insurance

This week on Unpacked, we simplify the perplexing realm of travel insurance, and we even have some fun doing it.

Transcript

Wendy Perrin: “So, I find myself unconscious in the Amazon, stranded, and—what exactly do you expect me to do to ensure my claim gets approved . . . eventually?”

Aislyn Greene, host: Unconscious in the Amazon could make for a riveting story title.

Wendy: Haha!

Aislyn: I’m Aislyn Greene, and welcome to Unpacked, the podcast where we delve into one challenging travel topic each week. With May upon us, it feels like the travel planning season is in full swing. I recently secured a flight and booked a couple of hotels for an upcoming trip to Norway with my mom and sister, and I’ve also begun arranging a fall visit to Japan.

While planning, I realized that both trips are prime candidates for travel insurance. They’re quite costly and have many components, so I’m currently exploring policies for each. With summer approaching, this week we’re revisiting an episode from last season focused on travel insurance.

I consulted with multiple experts to grasp what travel insurance truly entails, the various types available, how to determine if you actually need it, and if so, how to select the best policy for your situation. We’ll also provide guidance on what steps to take if things go awry during your trip. Ready to dive in?

Wendy: The purpose of travel insurance is to safeguard your finances, covering the expenses you've prepaid for your journey.

Aislyn: That’s Wendy Perrin, the editor-in-chief of wendyperrin.com, a website dedicated to travel advice. Wendy has extensively considered the topic of travel insurance. Be sure to visit her site for some excellent insights. At its core, travel insurance is a safety net that shields you from risks and financial losses while you’re traveling. But as Wendy puts it:

Wendy: Travel insurance isn’t always necessary. It really depends on your unique situation.

Aislyn: We’ll discuss how to assess your travel plans and make the right choices later in this episode. First, let’s explore the three primary benefits of travel insurance. Joining us is Christina Tunnah, the general manager of marketing and brands for World Nomads, a travel insurance provider that caters to adventurous and independent travelers.

Christina: Insurance is essential for three scenarios where things can go awry. First, if you need to cancel your trip, or if something unexpected occurs during your journey that forces you to return home, leading to lost reservations and bookings. Second, it covers you personally—your health and safety, including medical emergencies or accidents. Finally, it protects your belongings, meaning the items you travel with.

Aislyn: So, how do you determine if and when you need insurance? Wendy Perrin advises considering the potential reasons for trip cancellation. This could involve a situation at home that requires your attention, a health issue affecting you or a family member, or risks tied to the activities you’ll engage in during your travels. Choosing insurance is a highly individual decision and varies from one trip to another.

Wendy: Do you have a mother with a heart condition who might require you to cut your trip short to care for her if something goes wrong? Are you traveling to an area that poses political or geopolitical risks? Or perhaps you’re heading to the Caribbean during hurricane season? It’s crucial to consider the potential reasons that could lead you to leave a trip prematurely or cancel it altogether.

Aislyn: Just be sure to thoroughly review the policy you choose, especially if you plan on engaging in certain activities.

Wendy: If your trip includes activities like rock climbing, scuba diving, or bungee jumping, which are deemed risky, you may have a heightened need for insurance. You might think, “I really should have coverage in case I get injured far from reliable medical assistance.” However, it’s important to choose your policy carefully, as only certain plans will cover those high-risk sports.

Aislyn: Honestly, even younger travelers in their twenties and thirties should consider it. It can be tempting to skip insurance when you’re young and trying to save money, but don’t make that decision too quickly.

Wendy: Injuries can happen to anyone, regardless of age. You could trip and fall, break an ankle, or face any number of injuries on various types of trips. Younger travelers might be especially active, as they’re often the ones interested in rock climbing or scuba diving.

Aislyn: If you’re unsure how to assess your trip and identify potential risks, consider opting for “cancel for any reason” insurance.

Beth Godlin: The general advice I provide is: If you’re purchasing insurance because you believe there’s a significant chance something could happen, then go for the cancel for any reason option.

Aislyn: That’s Beth Godlin, president of Aon Affinity Travel Practice, which develops travel insurance policies available through third-party providers. For instance, if you’ve booked a tour or cruise and were offered or purchased travel insurance at that time, it’s likely that Aon is behind that policy. The cancel for any reason insurance Beth mentioned is costly, but there’s a valid reason for that.

Beth: Instead of receiving a cash refund, you might get a credit towards a future trip or receive 75 to 80 percent of what you insured, depending on the specific product you choose. This option offers the most flexibility without requiring specific reasons for cancellation.

Aislyn: It seems that a lot of this boils down to your personal priorities. For example, are you traveling with expensive gear that would be devastating to lose?

Beth: Isn’t it all about insurance? For instance, do I rent an apartment and get renter’s insurance, or should I just insure myself?

Aislyn: I asked Beth who she believes requires insurance the most.

Beth: The individuals who need it the most are those planning their travels well in advance, like booking a trip that’s scheduled for 60 to 90 days out. During that period, unexpected events could arise that may stop you from going. Additionally, travelers heading to distant locations should consider insurance to ensure they have emergency medical coverage and interruption benefits in case something happens that forces them to return early or delays their return due to illness preventing them from catching their flight.

Aislyn: It’s also wise to think about that reliable old option, cancel for any reason insurance, especially if you’re making a large, nonrefundable payment well ahead of time. Keep in mind that this type of insurance typically needs to be purchased within 14 days of your initial trip deposit, as it covers cancellations due to pre-existing medical conditions. However, if everything you’ve booked is cancellable or refundable, you might not need cancellation insurance, according to Wendy Perrin.

Wendy: If you’ve booked a hotel that allows cancellation 24 hours in advance, a rental car that can be canceled at the counter, or an airline ticket that offers refunds or full credits for future flights, then if you haven’t invested a lot of money, you likely don’t need insurance to protect you.

Aislyn: However, you should still consider medical insurance. This brings us to our next point: Avoid over-insuring! Before rushing to purchase a policy, Wendy Perrin advises checking the coverage you already have.

Wendy: Before you invest in travel insurance, assess the coverage you currently possess, whether it's from your credit card or your personal health insurance. Each individual's situation is unique, which complicates matters. It’s crucial to understand what you’re already covered for to prevent duplicate coverage.

Aislyn: Most people typically have two main types of insurance: health insurance and coverage via their credit card. While most health plans should cover you when traveling domestically, Christina Tunnah from World Nomads warns not to assume the same applies internationally.

Christina: Some individuals mistakenly believe that having health coverage in the U.S. means they don't need it overseas. There are plans that might offer international coverage, but it's essential to contact your health care provider to clarify what is included. Do you have coverage for repatriation? What assistance services are available? If you need to return home, will your insurance cover your belongings left in your hotel?

Aislyn: Credit card coverage can be equally complicated. Christina emphasizes the need to examine what your credit card policy entails. Yes, it really comes down to reading the fine print. Christina: Does your credit card cover expenses that weren't charged to it? That’s vital to know. Does it provide coverage for emergencies like ambulance services if you require transportation? What about hospital stays? Does the credit card insurance support the need for an airline traveling nurse companion if necessary?

Does it also account for the expenses of family members needing to extend their hotel stay because you're hospitalized, or covering their travel back home while you recover? These are various situations that credit card companies might or might not include in their coverage.

Aislyn: Christina mentions that credit cards might offer limited coverage or impose payout caps. Therefore, it's essential to check with your card provider. Additionally, if you plan on engaging in adventurous activities, confirm that your credit card covers those as well.

Now that you’re aware of the insurance you already possess, how can you find the right policy tailored for you?

Christina: While everyone can benefit from insurance, not everyone will find the same plan useful. It's crucial to highlight that there is no one-size-fits-all solution.

Aislyn: For instance, World Nomads caters specifically to independent and adventurous travelers, providing a distinctive service.

Christina: Our travelers are quite adventurous and often extend their journeys due to their passion for exploration. They may need to file a claim while they're away, so our products and website allow them to submit claims or purchase insurance even while traveling abroad, accommodating those already on their journeys.

Aislyn: Depending on where you live, you can still acquire a World Nomads plan after departing from home. There might be a brief waiting period, and you won't be able to apply for coverage once an incident has occurred—like if you fall ill or have an accident.

Expanding beyond World Nomads, Wendy Perrin suggests using sites like travelinsurance.com or insuremytrip.com, which allow you to compare various providers and their pricing. She emphasizes starting with questions about your trip activities and your current life situation.

Wendy: My top advice is to consider what is most likely to happen during this specific trip. Think about the reasons you might need to cancel, cut your trip short, or require medical assistance and need to return home, as these scenarios will differ each time.

Aislyn: And keep in mind that timing is crucial. Wendy: Many people fail to realize that after placing a deposit on a trip, they might think about travel insurance months later and could miss necessary coverage. It’s important to consider whether you want travel insurance right when you make that initial payment for your trip.

Aislyn: Next, she suggests reaching out to the insurance company you're considering and asking, "What happens if something goes wrong?"

Wendy: Explore various scenarios. "What if situation A occurs? What if B or C happens to me? Will it be covered? How much coverage is there? In case of a claim, what will I need to do? For instance, if I’m unconscious in the Amazon, what are your expectations for me to ensure my claim gets paid?" There are numerous important questions to ask before finalizing your policy.

Aislyn: There are also additional policies available, with some companies providing specific coverage often overlooked in standard plans. A prime example is medical evacuation—something that might not immediately come to mind. While reporting on this, I discovered how prohibitively expensive such a process can be—over $100,000—unless you have coverage from a company like Medjet.

John Gobbels: Medjet essentially offers a travel protection service for individuals. It operates as a membership program for travelers who find themselves over 150 miles from home. If they become ill or injured and need hospitalization, Medjet ensures medical transport back to their home hospital.

Aislyn: That’s John Gobbels, vice president and COO of Medjet. Medjet primarily utilizes air ambulances for patient transport. An air ambulance refers to a fixed-wing aircraft, similar to a Learjet, complete with a full critical care team onboard. If critical care isn't necessary, Medjet can send a critical care nurse to accompany you—flying back commercially in business class while ensuring you reach your home hospital safely. John notes that while people typically purchase memberships for significant international trips, they often utilize them for travel closer to home.

John: Imagine you’re heading to Africa or going on a cruise to Asia. Interestingly, around 90% of our members purchase the coverage for their big trips but often find themselves using it for domestic travel. They might go to the beach or take a holiday a state or two away and suddenly realize, "Oh wow, we have Medjet from our cruise back in January!" They call us, and we handle everything. Even domestic transfers can cost over $30,000.

Aislyn: Medjet provides various membership options, ranging from an eight-day plan to a month-long membership, all the way up to annual and multi-year options. Memberships start at $99 and can vary significantly based on your travel duration. But as John pointed out, that small investment can save you a substantial amount of money.

John: In late May, we had a couple traveling in Ghana who developed an unexpected neurological disorder—something completely unforeseen with no prior medical history. Luckily, they had their Medjet membership, and I’m sure dealing with this condition was the last thing on their minds.

They received excellent care where they were hospitalized but wanted to return home, especially since this condition has limited treatment options and can even be irreversible. It was crucial to get them back to the United States, and the cost for that transport was approximately $130,000.

Not many people can easily afford a bill like that. For an annual individual membership with Medjet costing around $315, they ended up saving $130,000 and positively impacting their recovery process.

Aislyn: Before we dive back into another innovative company in this field, let me share that travel trivia I hinted at earlier in the episode. Here’s the question: Solo leisure travelers might experience sturmfrei. What does this German term signify? A) A sense of complete freedom to do as you please. B) An anxiety about isolation caused by bad weather. C) A sudden panic attack. D) The freedom to share secrets with strangers. I'll reveal the answer after the break.

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Aislyn: We’re back! Did you manage to guess the answer? If you selected A, a sense of complete freedom to do as you please, you got it right! According to our copy editor Pat Tompkins, who crafts these questions, there’s no direct English equivalent for sturmfrei; it literally translates to storm-free.

Now, let’s return to the topic of insurance. Besides supplemental services like Medjet, there are emerging players in the travel insurance sector, including a company called Sensible Weather.

Nick: We create tailored forecasts for specific trips or experiences, and ultimately, we guarantee our forecasts. The goal is to equip you with the tools to plan your journey or to fully understand what to expect if you're attending an outdoor music festival, thereby locking in that outcome with our product known as Weather Guarantee.

Aislyn: That’s Nick Cavanaugh, the founder and CEO of Sensible Weather. He began his career as a climate scientist and considers himself a big data enthusiast and passionate traveler. (His own words.) Nick developed these tools to enhance his own travel experiences as a climate scientist and recognized that, given the changing climate and weather patterns, others could benefit from them as well. Sensible Weather isn't exactly insurance; it's something you purchase alongside booking activities like camping, skiing, or outdoor tours. While insurance compensates for losses—like if you can't participate in an activity—Sensible Weather offers a completely different approach.

Nick: Our goal is to transform a day that could have been perfect, say a 100 percent day if it were sunny, into something better. If it rains half the day, turning it into a 40 percent day, can we refund you the full amount so it effectively becomes a 140 percent day?

Aislyn: You mention a guarantee. What does that entail? Does it mean if it rains during my trip, I won't enjoy myself...?

Nick: Yes, that's essentially what it signifies. That ethos is at the core of what we aim for. For instance, if you embark on a seven-day trip and two of those days are ruined by rain, those days could feel rather disappointing.

Can we provide real-time reimbursements for those days, allowing someone to adjust their plans and ultimately enhance their experience?

Aislyn: The typical cost for Sensible Weather is 10 percent of the activity price—and they offer payouts that far exceed those of standard insurance companies. Here’s how it could work in practice.

Nick: For each day of a seven-day trip, you effectively have daily coverage. Most of our reimbursements—about 90 to 95 percent—are based on forecasts. At the start of a rainy day, we’ll notify you, saying something like, "Today might not be the best, as it’s expected to rain from two to five this afternoon. You’re eligible for a reimbursement." This notification comes via text message, containing a link that leads to various reimbursement options, such as bank transfers through ACH, Venmo, or PayPal.

Aislyn: Nick mentions that their primary audience consists of planners. Many families with young children who book trips to theme parks utilize this service, along with those engaged in outdoor activities like skiing and camping. Sensible Weather has even teamed up with two campground reservation platforms you might be familiar with: Reserve America and Campspot. Nick's aim also includes assisting those who operate travel businesses.

Nick: Financially, I aim to leverage planning tools and weather guarantees to mitigate the impacts of weather fluctuations. For travelers, getting rained out can be disappointing, and we want to provide reimbursement for that. However, for regional destinations, unpredictable weather can lead to cancellations or deter bookings altogether, which ultimately affects their revenue.

Aislyn: Ultimately, the objective is to encourage people to take their trips, even as climate change poses increasing challenges.

Nick: Looking ahead, travel and social events—things that hold deep emotional significance for people—will inevitably be affected by our changing world. We’re working to establish a framework that acknowledges these impacts while encouraging you to get out there and enjoy life. Our goal is to empower customers to experience the world around them.

Aislyn: At this point, you might realize you need travel insurance, but you may be curious about the cost. It varies based on your plan, destination, and activities. Christina Tunnah from World Nomads mentions that it can be as low as $50 for a weekend trip.

Christina: Conversely, it could reach up to $1,000 if you're embarking on a six-month adventure that includes various activities. There’s a significant range in prices, largely influenced by various factors.

Aislyn: If you’re purchasing a policy through one of the booking platforms associated with Aon Affinity Travel Practice, Beth notes that they typically aren’t charged on a daily basis.

Beth: The majority of policies sold—though not all—include trip cancellation and interruption coverage. This means travelers can be reimbursed if they need to cancel for a covered reason or face extra expenses if their trip is interrupted. Since these cover trip expenses and are calculated based on the original cost of the trip, the average benefit usually amounts to about 6% and can go as high as 10, 11, or even 12%.

Aislyn: Keep in mind that prices can vary based on your planned activities, as noted by Wendy Perrin.

Wendy: Travel insurance can indeed be costly, typically ranging from 4% to 8% of your total trip cost. The most significant expense usually comes from the trip cancellation coverage. However, if you’re not concerned about cancellation and your trip is fully refundable, you might find that the medical coverage alone is quite affordable.

Aislyn: Also, be sure to verify whether your policy includes medical evacuation coverage and its extent. If it doesn’t, keep in mind that Medjet memberships start at just $99.

Now that you have your policy or are about to secure it, the process isn't completely finished yet—but you're nearly there! Beth Godlin advises to ensure you double-check all the details before finalizing.

Beth: Review your policy carefully, whether before or after purchase. Most companies offer a grace period of a couple of weeks for refunds if you decide it’s not right for you. If you're buying coverage due to a seriously ill parent, check the pre-existing conditions clause to see if that situation is covered, or feel free to contact the company for clarification.

Aislyn: Christina Tunnah concurs, emphasizing the importance of taking the time to thoroughly read your policy.

Christina: I understand that this might not be the most thrilling reading material for a Sunday, but—

Aislyn: Pour yourself a cup of coffee and go through your policy.

Christina: It’s really just a quick read, about the time it takes to enjoy a cup of coffee.

Aislyn: This may seem obvious, but once you have your policy and are out traveling, make sure to utilize it! You've invested both money and time. Christina points out that even things like lost luggage and flight delays could be covered, provided you have the right plan.

Christina: We often hear stories of travelers whose bags go missing. They might say, "It's alright, I'll just wait for it to arrive at my hotel." I once met a woman at a bus stop who mentioned her bag hadn’t shown up. She had insurance, but when I suggested she call the assistance company, she replied, "No, I’ll just wait to see what the airline does." I urged her, "No, call the assistance company! That's what they're there for—to support you and keep you informed about your situation."

Aislyn: If something significant occurs during your trip, make sure to reach out to your insurance provider immediately. That's what I learned the hard way. Start documenting everything right away, so you can file a claim once you return home.

Christina: When you're back home and ready to initiate the claims process, it can go smoothly, but only if you have all the necessary information readily available. If you submit incomplete evidence of loss—be it a trip delay, lost luggage, or needing to stay overnight due to a missed flight—without full documentation to back up your claim, you'll find yourself going back and forth with the company.

Aislyn: So make sure to jot down notes, take screenshots, and save all your receipts.

Christina: Keep detailed notes, especially in medical situations. If you're visiting a walk-in clinic, you might think, "It's just $50 to bandage my hand"—but keep those receipts! Also, call the assistance service first. This way, you can ask the staff, "What do I need to ensure I don’t leave without the proper documentation?" They will guide you so that you don’t realize later that you're missing important proof.

Aislyn: Christina emphasizes the importance of having proof of ownership for any lost gear or technology. To receive compensation, you must demonstrate that the item belongs to you. Therefore, it’s crucial to keep documentation that shows your ownership.

Christina: We always advise travelers to snap photos of your receipts, if you still have them. Take pictures of the items themselves, along with any serial numbers, and credit card statements showing purchases—like, "Yes, I bought this at Best Buy on July 3rd, 2020." Store all this in the cloud so that if you ever need to file a claim, you have everything ready, rather than scrambling after the fact.

Aislyn: I assure you, we're nearing the end! One fascinating thing I discovered is that insurance can actually contribute to the greater good. Here’s Christina to elaborate.

Christina: We also see insurance as a responsible choice for travelers, as it helps ensure you aren’t placing a strain on the local community's resources. It’s essential to avoid being a burden on medical facilities or taking away a bed from someone who needs it.

Aislyn: World Nomads has an initiative called Footprints, which allows travelers purchasing a policy to make a small donation to a specific project.

Christina: We collaborate with vetted NGOs worldwide, choosing projects that require very specific funding rather than ongoing fundraising efforts. For example, it might be, "We need $20,000 to acquire two boats, fuel, and equipment for rangers dedicated to preventing turtle poaching in Nicaragua," or "We need $50,000 to establish water sanitation programs in the Torres Straits."

Aislyn: This entire topic can feel a bit daunting and dry, but remember it boils down to one essential idea: travel insurance is designed to provide financial protection. Here’s Wendy to elaborate further.

Wendy: The primary value of travel insurance is that it can save you tens or even hundreds of thousands of dollars. It’s important to consider where you’re investing the most money and how to protect yourself during your trip. Ultimately, it’s all about financial security.

Aislyn: Christina concurs, noting that a bit of planning can make a significant difference.

Christina: The vacation experience actually begins when you start planning and getting inspired about your destination. I understand that thinking about potential issues on vacation isn’t appealing, but incorporating it into your planning will help you understand what it can offer you. Every traveler’s needs are unique, allowing you to focus on enjoying the fun aspects of your holiday. So, tackle it, make it part of the process, and then move on to the exciting parts!

Aislyn: Let’s summarize the key points we covered today.

Takeaway #1: Travel insurance isn’t necessary for everyone, but the best way to determine your need is to evaluate your personal circumstances and travel plans each time you prepare for a trip.

Takeaway #2: There are three main areas you may want to safeguard with travel insurance: your financial investment, your health, and your belongings. Identify which of these are most crucial for you and proceed accordingly.

Takeaway #3: Insurance that allows cancellation for any reason can be the most beneficial for securing refunds, though it tends to be pricier. It’s particularly suited for those making significant nonrefundable deposits. Just keep in mind: you typically need to purchase this within 14 days of making your initial deposit.

Takeaway #4: If cancellations aren’t a concern for you, standalone medical insurance can be quite affordable.

Takeaway #5: Before purchasing a policy, make sure to review what coverage you might already have through your health insurance or credit cards.

Takeaway #6: Don't overlook additional plans like medical evacuation and weather guarantees. Medical evacuation can be costly and isn’t always included in standard travel policies.

Takeaway #7: Reach out to the insurance company before committing to a policy and discuss the most common situations you might face. Also, brace yourself and thoroughly read the fine print of your policy after you make a purchase.

Takeaway #8: If anything occurs during your trip, make sure to document everything meticulously.

Travel insurance: It can be a complex topic, but I feel significantly more ready to invest in my upcoming travels. For instance, I have an exciting trip to Japan planned for 2024 and I will definitely be securing travel insurance for it.

We’ll provide links to all the resources mentioned in this episode in our show notes, along with a travel insurance overview on Dinogo.com.

Hungry for more insights? Head over to Dinogo.com, and don’t forget to follow us on Instagram and Twitter at @Dinogomedia. If you enjoyed today’s discussion, we’d love for you to return for more captivating stories. Subscribing makes it easy! You can catch Unpacked on Apple Podcasts, Spotify, or your preferred podcast platform. Please take a moment to rate and review the show; it helps fellow travelers discover it. We want your feedback too: Is there a travel issue, trend, or topic you’d like us to cover? Reach out to us at Dinogo.com/feedback or email us at unpacked@Dinogo.com.

You’ve been listening to Unpacked, a production of Dinogo Media. The podcast is produced by Aislyn Greene and Nikki Galteland, with music composed by Chris Colin.

And remember: The world is complex, and we’re here to help you make sense of it.

This episode has been updated from its original release on September 5, 2023.