Statistics show that only about 70% of people traveling overseas buy travel insurance regularly. That leaves 3 out of every 10 traveling people uninsured. While you can save some money by avoiding the travel insurance, at the end it may lead to very dire consequences should anything happen during your travel. You will probably be able to cover for things like lost luggage or stolen credit card, but if you get sick while overseas, the hospital bill may haunt you for years to come.

So, if you are deciding whether to arrange any coverage offered by travel insurance then the definitive answer is Yes. It’s really not worth the risk. You don’t need to buy the most expensive travel insurance policy out there. Getting simple insurance with the most important things covered should suffice. In this article we provide some help by showing you which things to look for when buying your travel insurance so that you get an affordable deal with good coverage.

There are two groups of items covered. First includes must-haves which are essential for every travel insurance policy. In the second groups are optional items. These you can include or exclude, based on your budget and personal preferences.

(1) Important travel insurance coverage – must have:

(a) Medical Expenses

This is an absolute must. Hospitals in some countries are so expensive that a broken arm can set you back for years. Assuming that you were lucky to get treatment without paying upfront.

(b) Country inclusions / exclusions

Make sure that the country you travel to is included in your travel insurance policy.

You can also save considerable amounts on insurance premiums by excluding certain countries. Most insurance companies offer excluding some medically expensive countries like USA, Canada or Japan. If you don’t intend to travel there, exclude them from your policy.

(c) Personal Liability

This is another must. In some countries it is the national sport to sue everyone for anything. Even if you caused damage to someone by accident, you can still be liable to pay damages. This can run even into millions, so don’t risk getting screwed by some unscrupulous people trying to make their living out of you.

(2) Optional travel insurance coverage – depends on personal preferences:

(a) Dental Expenses

Most insurance companies won’t pay more than just few hundred dollars for your dental cover and the premium can be quite high. This cover is not especially good value for your money.

(b) Family Emergency

This cover will pay for your family members to visit you if you are for example stacked in hospital for some time.

(c) Resumption of Journey

If there is any disruption to your travel due to unforeseen circumstances, the insurance company will pay cost associated with resumption of your travel, for example new flight tickets if you missed your flight as a result of getting sick.

(d) Emergency Cash Allowances

This will pay some cash in case you find you’re yourself in some emergencies. Not very worth in our opinion – if you travel then you are expected to have some extra reserve money at hand. Otherwise don’t travel overseas.

(e) Permanent Disability

If you suffer an accident during your travel and become permanently disables, insurance will pay some fixed amount. If you have disability insurance with your medical or health insurance at home already then this cover is not necessary.

(g) Loss of money or travel documents

This option can be handy. Losing your passport, credit cards or money can cause significant inconvenience. Getting replacements quickly will help getting you back on road.

(h) Luggage and Personal Items

If you carry any valuable items with you like Laptops, Cameras or expensive mobile phones then this cover is important. There is high probability of loss, theft or damage to these items while traveling, so having them covered is beneficial. Otherwise don’t bother since the extra premiums can be costly.

(i) Cancellation fees and deposits

This cover applies mostly to your flight tickets. Hotels usually offer free cancelations if you cancel no less than 24 hours prior to check-in. Even if cancelled late, there is only 1 night cancellation fee. When it comes to flight tickets then it depends of what type of flight tickets you have. Some tickets offer cancelation options with only limited cancellation fees. However, if you mostly use budget airlines whose cancellation fees are 100% of the ticket price, then having this option can be worth the expense.

For this cover to be valid you need to buy your travel insurance as soon as possible, ideally at the same time when you buy your flight tickets. Otherwise the insurance company may refuse to pay since they will suspect that at the time when you bought the insurance, you already knew about coming cancellation.

(j) Rental vehicle excess

Most car rental companies offer to waive your excess, so having this cover with you travel insurance can be a duplicate. It is only worth if you know that you will hire rental car frequently and that it would be more expensive to get covered with rental car insurance than with your travel insurance.