Things to Know Before Buying Travel Insurance

Is Travel Insurance Necessary?

Is Travel Insurance Necessary?

Most people understand that going on holiday is often a pretty unpredictable experience. You may not know exactly what conditions are like where you are going, there could be an accident or delay involving your transport, you might be the victim of a crime, you might fall over on the hotel stairs! Being in a foreign country can make many simple problems more serious as well. For those reasons most people decide to carry travel insurance, they consider it an essential part of traveling and for most people that is true.

But is it always essential? For many travelers the specific details of their trip may mean they don’t actually require travel insurance or they only require a certain type of coverage and there is an opportunity to save money.

In the United States travelers now spend close to $2 billion per year on travel insurance, so it is a flourishing industry and insurers realise this. That figure is up from $1.3 billion in 2006, so it can be seen that Americans are more well informed about the dangers of travel and the benefits of this kind of insurance.

The vast majority of policies purchased feature trip cancellation insurance which is usually very valuable for any form of traveling. However for other forms of travel insurance like medical insurance and property insurance, it’s worth looking at your existing policies and credit card coverage first – you may have too much coverage!

For example many credit cards offer some coverage for trip cancellation and many home and contents policies will provide coverage for your expensive items like cameras while you are traveling. By examining your current coverage and real risk factors you may be able to save some money on travel insurance which you can spend on a few more souvenirs from your destination.

Your personal situation also plays a very large role in determining how much coverage you need. Are you a healthy 25 year old who is simply going to Canada for the weekend? Or are you a 75 year old going on safari in Africa? You circumstances and travel destination may necessitate a certain kind of coverage. If you are going to Canada, which has a great public health system – you probably don’t need travel insurance that covers health issues at all! An older person traveling in Africa might need medical evacuation insurance so if anything happens you can immediately be transported to a world class hospital.

So here are a few pointers to help you determine if you need travel insurance and how to get a better deal on it!

Evaluate current insurance policies and credit cards
Firstly, evaluate your current health insurance and contents insurance policies to determine if they provide coverage while traveling. That might reduce the necessity of travel insurance. Take a look at your credit card to see if it provides any protection on travel costs.

Evaluate your personal situation
Look at your personal situation including your age, health, and the kinds of valuables you will be taking with you. If you are 20 years old, in good health and traveling to Australia (which has a very good public health system) with a cheap camera and a bag of clothes, you may not need travel insurance at all.

Your destination and what you plan to do there also plays a large role in determining if you need travel insurance. If you are 20 years old, in good health, but plan on going to Bali and drinking copious amounts of alcohol and partying – then there is substantial risk. That country does not have a world class health system and many tourists are injured in Bali every year.

If you plan on indulging in any high activities like bungee jumping, rock climbing or sky diving it is also a good idea to have travel insurance.

If it is a short trip going to another part of America or to Canada, travel insurance may not be necessary at all.

Check the quality of travel insurance policies
The policy provided by your travel agent may not in fact be the best one for your and could just be the policy that they receive the highest commission on!

It is usually best to shop for a policy yourself, after you have evaluated your situation and requirements. There are many insurance comparison search engines on the Internet which can help you narrow down your choices and find the right insurance for you. Websites like Square Mouth and Insure My Trip are both very good for narrowing down your choices and getting the right policy.

Understand how much good travel insurance costs
Travel advisors suggest that a good insurance policy should cost between 5% and 10% the cost of the trip. So if you are doing a massive trip through Europe which visits 12 countries and costs $5000 USD, you might have to pay as much as $500 USD for the highest quality travel insurance. However insurance prices that highly usually contains much more coverage than the average person requires, so a policy more around the $250 USD mark is probably more suitable.

So while travel insurance may not actually be necessary for everyone, if you are unsure then definitely err on the side of caution and have the peace of mind that travel insurance brings!

How Traffic Tickets Affect Insurance Rates

Traffic fines and insurance rates

Traffic fines and insurance rates

It’s one of the most common questions amongst car owners – how much will your traffic infringements cost you when you buy insurance?

Well unfortunately even a minor traffic infringement can make a difference when it comes to buying car insurance. The difference is minor in some cases, but in others it makes a surprising difference.

Let’s take a look at the minor traffic violations first.

A person in their 40s with a good driving record can see a 5 percent increase from being caught without a seat belt by police. If the same driver was caught failing to signal for a turn that could bring about a massive 19 percent increase in insurance premiums with some companies! Driving by yourself in HOV lanes could create a hefty 18 percent increase for a driver.

Are you a chronic tailgater? Well that could also land you a 19% increase in your insurance premiums if you are caught by the police. Speeding is even worse with a 15 miles over the limit landing you a hefty 21 percent increase in insurance premiums.

It’s important to note that every insurance company has different penalties for traffic infringements. That means if you have a few fines on record or a criminal offense, it’s more important than ever to shop around for you car insurance.

They increase the premiums because according to statisticians, the more fines you have, the more likely you are to be involved in a crash soon! Your risk profile is increased in the eyes of the insurer.

So the next question would be how long will you carry the penalty forward? Depending on the insurance company in question, you could carry the penalty to your car insurance premium between 3 to 5 years.

Now for the more serious traffic infringements!

If you get charged with reckless driving, that could increase your insurance premiums by over 80 percent! If you are caught driving under the influence, that increases your premiums by a huge 93 percent on average.

However there are ways to avoid the ticket showing up on your record and resulting in these huge penalties. For example a driver can accept a temporary suspension of their license, pay the fines and go into a driving skills program. It is up to the court whether they include a record of the infringement or look at your efforts to improve your driving and don’t put it on. A good lawyer may help there!

Some insurance companies have extremely high penalties when it comes to traffic offenses, so as always – shopp around for your insurance and do your research!