Many people want to save money when they go on a business or vacation trip. They avoid buying a proper travel insurance policy. This is because it is possible to purchase a travel insurance policy directly from the insurance company you are dealing with or buy a credit card that offers travel coverage.
As some of the credit card brands do provide a few of the benefits included in travel insurance, you may be prompted to believe that credit cards offer the benefits you need and it is unnecessary to buy traditional travel insurance. However, on closer examination, you will realize that the travel benefits provided by a credit card and a travel insurance policy are not the same. The aim of this article is to help you understand the difference between the two.
#1: Medical Evacuation Coverage
If you happen to fall ill or sustain an injury when you are on a holiday and you need to be immediately evacuated to a medical facility nearby, it can be an expensive affair. At times, it could even be a life or death situation. The problem is that many credit cards do not cover expenses associated with medical evacuations.
This means that you or the person traveling with you will have to bear the cost if one of you has to be evacuated. On the other hand, standard travel insurance serves to eliminate this concern. This is because most traditional travel insurance plans include coverage for medical evacuation. Of course, the coverage will depend on the plan that you have chosen.
Some travelers might choose to neglect this benefit. They may think that a situation that requires might not arise at all in their case. However, you might understand that life is dynamic and it is not possible to foresee such situations and it is worth buying a traditional policy so to have proper medical evacuation coverage.
#2: Trip Interruption/Cancellation Coverage
Many a traveler has been faced with the need to interrupt or cancel a trip either before or after starting it. Most of the travel insurance plans available in the market today offer this benefit. The expenses incurred by you are reimbursed if you have to interrupt or cancel your trip for a reason included in the policy.
Credit cards also provide this coverage, but the difference between two is the overall amount for which you are covered. The best of the travel credit cards available in the market provide coverage only up to $10,000, irrespective of the expenses incurred by you. Traditional travel insurance policies provide better coverage.
For example, traditional travel insurance policies enable you to obtain coverage up to $100,000 per individual as against the coverage of $10,000 included in your travel credit card. Depending on your trip cost, you can decide whether you should rely on the protection provided by your credit card or buy a traditional travel insurance policy.
#3: Travel Delay Coverage
Travel delay refers to the situation when you have to delay your travel. As a result of this, you might have to buy additional meals and extend your hotel stay while you wait. In such a situation, you will be reimbursed the extra expenditure incurred by you if the reason for delaying the trip is covered by your insurance policy or the credit card. However, the coverage provided by your credit card will be very limited.
This is because most credit cards cover only delays related to outbound travel to the specified destination and not the return trip back home. Additionally, there may be restrictions on the number of claims that can be filed in a year. Further, credit cards do not generally provide coverage for normal carrier cancellations.
In the case of traditional travel insurance, most insurers do not specify any limitations on the number of travel delay claims you can file. Further, these policies often include coverage for both to and fro trips. In addition, these policies cover delays certified by the carrier.
Final Thoughts
In general, the travel insurance benefits offered by credit cards are sometimes pretty awesome, but they are often limited. Therefore, they may not always provide the cover that you actually need. The travel benefits offered by credit cards vary from one card to another. However, the benefits offered by specialized credit cards include rental car insurance within your country, no foreign transaction fees and no penalty on changing airline tickets. However, you are still vulnerable to a wide range of issues. Many things could go wrong while you are traveling.
On the other hand, traditional travel insurance policies can be customized to suit the needs of your trip. This means that the insurance will be focused depending on where you are traveling and what you are doing. Further, there are differences in terms of coverage when you stay within your home country and when you travel to a foreign country.
When you are on a trip, you might rent a car, travel by plane, boat, train and use other different modes of transportation. Therefore, you need to be adequately protected against many exigencies.
Traditional travel insurance policies cover a wide range of risks, including trip interruptions and cancellations, travel delays, medical emergencies and lost luggage. Additionally, the insurance provider also provides you with a 24/7 hotline for emergencies. The dedicated customer service staff of the insurer will be available for help irrespective of which country you have traveled to or traveling. They will help you to book a new air ticket, deal with lost luggage or provide for translation assistance in a healthcare center.
Whether you decide to utilize the benefits offered by your travel credit card or buy traditional travel insurance, it pays to remember that you should never travel without proper coverage. It is worth exploring the various options that are available to you before deciding to go with one. It is true that the coverage extended by a credit card is free, but it pays to remember that there could many gaps with respect to the level of coverage provided. This means that you could end up wasting a great deal of your hard earned money to fill up the shortages.