5 Tips to Save Money on Backpacker's Travel Insurance
by Virginia O'Connor
We’ve all heard stories of people 'wasting' their money on travel insurance, but remember - it's insurance! It's only useful when you need it and not possible to buy it after you need it. Most backpackers need travel medical coverage. This is something you cannot travel safely without if you are going abroad (i.e., outside your health insurance network) and/or you don’t have health insurance at all. Medical care is expensive everywhere, so protect yourself ($50,000 - $100,000 is usually the minimum when going abroad).
So, for all the backpackers who are thinking about or getting ready for their next trip - here's what you need to know to save money on your travel insurance.
1. Know what you can and cannot live safely without
The key to knowing what you can and cannot travel safely without is knowing enough about your trip: i.e., where you're going, what risks you'll face there, and what activities you'll be doing. In most cases, the following coverage is important to backpackers:
Most backpackers travel pretty light, but their gear is sometimes expensive. Travel insurance baggage coverage protects your stuff up to the plan’s limit no matter where you are on your trip (read the plan details to know the limits). If your pack is stolen, for example, you can get the cost of a new pack and some of the essentials reimbursed to you.
Some backpackers need pre-existing medical coverage because the typical travel insurance plan excludes any medical condition for which you sought treatment or had diagnosed prior to your trip. This is a 'loophole' that catches many travelers off guard.
All backpackers can benefit from trip interruption coverage, which brings you home should an emergency arise and will even return you to your trip after the emergency is handled should you have more time to continue your trip.
All backpackers should check their travel insurance plan details to understand the coverage for passports and credit cards. Many travel insurance companies will refund you the cost of replacing your passport if it's lost or stolen on a trip, and help you replace your credit card as well.
What a backpacker probably doesn't need? In most cases, a backpacker does not need the following:
Multi-millions in flight accident or AD&D coverage.
'Cancel for work reasons' coverage - in all likelihood you arranged this trip well ahead of your work schedule and you can go even if work piles up.
Car rental collision coverage - in all likelihood you’re not traveling by car if you’re backpacking, but if you are then avoid the higher costs at the rental counter and add it to your policy instead.
The tricky one is trip cancellation coverage because weird stuff happens. If a person important to you suddenly is very ill, are you still going to take your trip? Likely, you’ll delay your trip and if you don’t have a lot of pre-paid and non-refundable trip costs, it won’t be a big deal. You’ll pay the fees to change your airline ticket and move the dates around instead.
Still, if you do have a lot of pre-paid non-refundable trip costs, you may want that extra coverage to avoid losing everything if you have to cancel the trip.
2. Avoid insuring refundable trip costs
Travel insurance doesn’t refund you when you’re trip costs can be recouped in some way. Here are a few common examples where trip costs are recovered:
If you can reschedule your lodging for a different date, for example, those trip costs aren’t really lost and you won’t be able to claim them.
If your flight is cancelled, but the airline gives you a full cost voucher for future travel, there is no real ‘loss’ and the insurance company has no obligation.
If you purchased airline tickets that you can change, or change with a small fee, then it’s usually not worth insuring those costs either. This tip alone can save you lots of money on your travel insurance purchase.
3. Skip the multi-millions in evacuation
Sure, having coverage for evacuations is important for two reasons:
If you’re very ill or badly injured and need immediate medical care, you want someone to haul your broken body to where you can get some help.
If you’re in a bad situation - terrorist attacks, civil uprisings, etc. - you may want someone to get you out of there quickly.
Still, it’s rare for even a medically necessary evacuation to cost more than a couple hundred thousand dollars, so getting a half million or million in evacuation coverage is usually unnecessary unless you're climbing Mt. Kilimanjaro, for example.
4. Skip the adventure cover unless you really need it
The typical travel insurance plans exclude activities that are considered high risk and every travel insurance plan defines the high-risk activities differently. In fact, they’ll list the activities that are excluded in the plan’s description of coverage (read this document carefully!). Look for the section labeled 'exclusions'.
Here's an example of what the exclusions will look like:
We will not pay for any loss under the plan cause by or resulting from: mountain climbing, bungee cord jumping, skydiving, parachuting, hang gliding, parasailing or travel on any air supported device, other than on a regularly scheduled airline or air charter company.
Unless you're planning to experience high-risk activities on your backpacking trip, you won't need the adventure coverage. It's usually an optional add-on and it does increase the cost of your premium. If you are planning to SCUBA dive, or ski, or snowboard, or anything else that may be considered risky, check the plan to be sure it's covered. Not sure? Give the travel insurance provider a call and ask.
5. Do not buy it from a travel booking site
You've probably seen that checkbox when you're booking your travel on just about any online site, but it's never a good idea to select your travel insurance this way.
- You won't read the policy details before purchasing,
- You won't have a range of plans and coverage to choose from
- You won't have access to potentially necessary upgrades
You'll have more focus, selection, and the ability to purchase upgrades if you research your plans on an independent travel insurance comparison site instead. Plus, with a comparison site, you can price-shop to get the best deal.
Want to compare travel insurance plans now? See Travel Insurance Review for a great travel insurance comparison tool and useful info for adventure travelers too.
Posted: Feb 17, 2013
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