Do I Need Travel Insurance?
Travel insurance may not be appropriate for all trips
and you may have some coverage from policies you already have –
such as a life, health or homeowners/renter’s policy. Read your
policy or speak with your insurance agent or company to find out more
about what personal property and medical coverage you already have that
could provide protection while you’re traveling.
Some credit card companies also offer travel insurance
if you pay for the reservation with your card. When making your
decision, check to see if your company offers those benefits.
After finding out what coverage you already have, ask
yourself the following questions to help decide if you will benefit
from the added cost:
- Do I really need the coverage?
- What could go wrong before or during the trip? Can I
cover those costs on my own?
- Will the coverage apply if I have a family emergency
affecting someone other than myself (the traveler), or does the
coverage only apply to personal emergencies (like if I get sick)?
All companies and agents selling travel insurance must
be licensed in the state where you are purchasing the policy. While
considering whether you will benefit from the insurance, also stop to
investigate where you are considering buying the policy.
Marketing and sales material for fraudulent coverage is
often difficult to distinguish from real insurance coverage. So, to
protect yourself – STOP
before you write a check for the premium or sign the application and CALL our Consumer Services
Division at (800) 852-5494 to CONFIRM
that the agent and company are licensed in Arkansas, or click here
to confirm this information online.
What Are the Major Types of Travel Insurance?
There are two main types of travel insurance. The first
type, commonly called trip cancellation insurance, protects against the
loss of non-refundable travel costs – like airfare, hotel or tour
expenses. So if you’re making a deposit on a cruise or have
non-refundable airline tickets, this would be the type of coverage
The other type of travel insurance offers protection
against loss due to medical emergencies, damage to personal property or
death that occurs while you are traveling.
Trip Cancellation/Delay/Interruption Insurance
Travel insurance generally covers a very specific list
of reasons for cancellation, delay or interruption. Before you buy a
policy make sure you’ve reviewed these situations carefully.
- Trip Cancellation – Reimburses pre-paid travel
expenses if you aren’t able to take your trip because you become
ill or die.
- Travel Delay – Reimburses pre-paid expenses if
you aren’t able to take your trip because of a travel delay, such
as a flight delay or cancellation.
- Trip Interruption – Reimburses pre-paid
expenses if your trip is cut short because you become ill or die, or
because of any other misfortune listed in policy. Covered reasons might
include bad weather, airline strikes, terrorism, bankruptcy, jury duty,
or fire or flood damage to your home.
Medical/Accidental Death Insurance
When considering a medical or accidental death travel
policy, ask about pre-existing conditions and age limits. How companies
deal with pre-existing conditions can vary widely. Read the terms of
coverage carefully if you have a pre-existing condition and be prepared
to pay a higher premium to cover them. Some insurers also charge more
for older travelers.
American health insurance is generally not accepted outside of the
United States. To find out more about the extent of your coverage,
speak with your insurance agent or company before you leave home.
- Medical/Health – Reimburses medical and
emergency dental expenses that you incur because of an illness or
injury while you’re traveling.
- Medical Evacuation – Provides emergency
transportation to either a hospital in the geographic region where you
are and/or transportation back to a hospital near your home.
- Accidental Death – This coverage is usually
split into three parts:
- Air Flight Accident – Covers death or
dismemberment during flight only.
- Common Carrier – Covers death or
dismemberment while traveling on public transportation such as a plane,
ferry, train, bus or taxi.
- Accidental Death – Covers death or
dismemberment at any time during a trip.
Baggage/Rental Car Damage Insurance
Homeowners or renter’s insurance may cover baggage
or personal property damage when you’re traveling and your auto
insurance may extend to a rental car, but you should always check the
terms of your current policy or ask your insurance agent or company.
- Baggage Loss – Reimburses for lost, stolen or
damaged personal items. This usually doesn’t cover personal items
lost or damaged by an airline. If you buy baggage insurance, be sure to
review the policy for the list of property that is not covered and the
value limits associated with the property.
- Rental Car Damage – Reimburses for damage or
loss to a rental vehicle. If you purchase this coverage you can decline
the rental car company’s “collision damage waiver.”
This coverage doesn’t provide liability protection. Find out more
about your rental car insurance choices here.
Is a Waiver the Same as Insurance?
Cruise and tour operators may offer Cancellation
Waivers. Keep in mind that waivers are not insurance
policies and are not regulated by the state, and
therefore do not have the same consumer protection as a travel
insurance policy. Read all of the restrictions before you buy a
What Red Flags Should I Watch For?
Here are some warnings against possible
- The insurance is advertised through blast faxes, spam
e-mails, Internet pop-ups or signs posted on telephone poles.
- The company claims you can save a considerable amount
on travel insurance.
- The company uses high-pressure marketing and an
extreme sense of urgency, telling you that you “must act
now” or “this one-time offer.”
Just remember, if it seems too
good to be true, it probably is!
What Should I Check Before I Buy?
- Are the company and the person I am buying the policy
from licensed in Arkansas to sell insurance?
- What is the refund policy on prepaid expenses? How
long in advance do I have to cancel to get a refund?
- Other than a full refund, what benefits will the
insurance company offer? Will they rebook a flight or help me find a
new hotel room?
- Read the policy to see if the coverage applies only
to the traveler, or if an illness or emergency with a family member
will also trigger the coverage.
- If you’re working with a travel agent you
trust, ask about his or her experiences with any recommended travel
insurance companies. Have their customers filed claims? Were those
- If you’re planning an adventurous vacation
(i.e. skydiving, scuba diving), ask if the insurance will cover those
- You don’t have to buy travel insurance from the
travel agent booking your trip. You may get a better deal if you work
directly with the travel insurance company. Just make sure the quotes
you’re comparing are for the same coverages.
- If you buy from your travel agent, ask to speak with
the licensed insurance agent in their office, and check to make
sure that person’s license is up to date.
If you have questions or are confused about your
contact the Arkansas Insurance Department Consumer Services Division
at (800) 852-5494 or (501) 371-2640.
Get smart about your insurance needs! For more
information about auto, home, life and health insurance options –
as well as tips for choosing the coverage that is right for you and
your family – visit www.InsureUonline.org.