Travel Insurance Explained: What You Need to Know

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Do you need travel insurance, is it worth it, what does it cover, and how much does it cost? With so much information floating around on the internet, travel insurance can be tricky to break down and understand. My goal is to help you understand the different types of travel insurance, and give you a roadmap to assess your current situation and determine whether or not you need travel insurance, and if so, which type.

I’m Kristy, and I’ve been a digital nomad since 2017, traveling and living in different parts of the world while running my online business, Nomad Nextdoor. This blog is all about travel and helping you navigate the world as a digital nomad so you can optimize your experiences living, working, and traveling in different countries.

Now let’s jump in. The first thing you'll need to do is figure out what type of travel insurance you will need, or if you need it at all. The best way to do this is by taking inventory of your current insurance policies that you have, to see what is already covered.

There are several different ways to categorize travel insurance, but I’m going to break it down into 3 basic parts to help you get a better understanding of what type of insurance you might need. First you have Medical Insurance, which usually only covers medical emergencies that happen on your trip, so if you get sick, get in an accident, need to be airlifted or have a life-threatening medical situation, this insurance will cover you. Second you have Trip Insurance which covers non-medical aspects of your trip like lost luggage, travel delays, lost passports, trip interruption, political evacuations; the list goes on, and each plan is different. The third is what I like to call “Personal Belongings or Gear Insurance”, so insurance for things like cameras, laptops, or other expensive electronics. 

Medical Insurance

Let’s talk first about medical insurance, which in my opinion, is the most important aspect to consider, as it can have the highest cost and leave you in debt of hundreds of thousands of dollars if something happens and you are caught without medical travel insurance. To determine whether or not you need this insurance, you should first check your current medical insurance policy in your home country, and find out if they cover medical treatment abroad. If they do, find out to what extent, and also if there are any countries excluded from the list. Oftentimes insurance policies will exclude places like the USA or Hong Kong, as the medical expenses are significantly higher in these countries.

You will also want to inquire whether or not they include COVID-19 insurance. These days, COVID insurance is becoming a prerequisite to enter many countries. If your medical insurance provider does not cover you internationally, or for COVID, then you will probably want to look into taking out a separate travel medical insurance policy. This ended up being the case for me.

My medical insurance policy does cover me internationally, but does not cover me for the required COVID coverage, so I searched around online for travel insurance, comparing different options and ended up taking out a policy with SafetyWing. Although I have taken out policies with other travel insurance companies in the past, the main reason I chose SafetyWing is because they have COVID insurance, and they offer it at the most affordable price, starting at just $42 per month. Their Nomad Insurance policy includes COVID, medical, and trip insurance. I've linked it below so you can check it out. Also just note that you will need to have had the plan for at least 28 days in order for the COVID insurance to kick in and be effective, so purchasing ahead of time is a good idea. 

So what doesn’t medical travel insurance cover? Normally you are only covered for medical emergencies, so that does not include things like prescription medications, pre-existing conditions, or non-emergency doctor visits. It oftentimes will also exclude high risk activities like skydiving or bungee jumping, so you will want to make sure you read the fine print so you know exactly what is and isn’t covered before leaving. 

If you are a long term traveler, digital nomad, or plan on giving up your medical insurance back home, you may want to consider taking out a more comprehensive travel medical insurance policy. This would give you more comprehensive coverage, covering you both abroad and in your home country. If something like this does interest you, it's worth checking out SafetyWing’s Remote Health insurance policy. They also have add-on options for things like maternity care and dental. The pricing for a Remote Health policy starts at $206 per month. 

Trip Insurance

Now let's move on to the second type of insurance you need to consider, which is trip insurance. You’ll need to determine what the trip is costing you, and how much you would be willing to lose. It’s two different scenarios when it's a weekend trip across the border or your honeymoon trip of a lifetime. If it’s costing you more than you can afford to lose, trip insurance might be worth considering. But before going out and buying a policy, you’ll want to see if you are already covered.

Many U.S. credit cards have travel insurance and purchase coverage included. Meaning if you book your trip using that credit card, and something within the terms of coverage happens, then you will be reimbursed.

For business, I personally use the Chase Ink Preferred Business Card, which includes benefits such as Trip Cancellation or Interruption, Auto Rental Collision Damage Waiver, and Purchase Protection, to name a few. Another credit card I currently use and have had for over 5 years is the Chase Sapphire Reserve. Although it has a higher annual fee, I love this card because it also includes Priority Pass lounge access, meaning you can visit a network of airport lounges worldwide at no cost. If you are a frequent traveler, this can save you hundreds of dollars per year on food and drinks in airports, as most lounges offer them at no charge. The third card I use is United MileagePlus. This is a great basic travel credit card, with an annual fee of under $100. These credit cards also have great sign up bonuses, which you will see when you visit their websites. There are many other credit cards out there that cover travel related incidents, and vary from card to card. You will just want to pay attention to the fine print to see exactly what is and isn't covered. 

If you don’t have a credit card, or yours doesn’t cover what you need it to, no problem because a lot of the travel medical insurance policies also include trip insurance. For example, the Nomad Insurance by SafetyWing policy also includes trip interruption, travel delay, lost luggage, political evacuations, and more. And the best part is, if you are buying their insurance mainly for the medical aspects, you won’t have to pay extra because the trip insurance is already included. 

But what is not normally included in trip insurance? Again, you will need to read the fine print, but there are specific conditions that need to be met in order to have an incident count as a trip interruption or cancellation. You can't just cancel for any reason. Normally you are covered if you have a medical or family emergency, but again it can differ from plan to plan so always double check. Another thing that is not typically covered is theft or loss of personal belongings, which is what we will talk about next.  

Personal Belongings/ Gear Insurance

Last but not least on our list is “Personal Belongings Insurance”. If you are a digital nomad or traveling for work, more than likely you will be carrying electronics of value like laptops, tablets, cameras, lenses, you name it. Having them insured might be a good idea, especially if they are high value items. You never know when they might be robbed from a hotel room, fall overboard on a boat ride, or get lost on a train. When you're traveling around more frequently the odds that something can happen goes up, and you probably won’t want to be left uninsured if something does.

So how do you get them insured? The first thing you will want to do is check with your homeowners or renters insurance policy to see if they are covered. Oftentimes they are, and if not you can usually add a rider to your policy, which basically means you tell them what gear you have, what the value of each item is, and they will increase your insurance premium to compensate for the items. I’ve done this in the past and it cost about $100 per year to have over $8,000 worth of equipment insured, which included my laptop, phone, and all my camera gear. My laptop did end up getting damaged, and the insurance paid for a new one.

If you don’t already have an insurance policy, you can also look into buying insurance for your gear through a third party insurance provider. Although I haven’t personally used any third party companies before, I have heard good things about PPA insurance for camera gear.

Also make sure to note that if something does happen to your gear while you are abroad, filing a police report right away is a good idea, as some insurance companies require this in order to file a claim. 

I hope you found this information helpful and now have a better roadmap for determining what type of travel insurance is best for you. Feel free to leave any questions or feedback in the comments below. You can also check out my YouTube video for more visuals along with the explanations. Make sure to subscribe to the channel so you don’t miss out on future content.