Ideally, everyone wants to have as much travel insurance as they need to protect themselves from the risks of travelling abroad. Unfortunately, determining how much coverage you need can be difficult. That’s why many people are underinsured or overinsured instead of having the right amount of travel insurance.
Keep reading to find out how you can avoid both issues.
Underinsurance occurs when you don’t have enough insurance to cover your needs. It can occur due to several reasons, including:
• You haven’t updated or reviewed your travel insurance policy in years, yet your insurance needs have changed.
• You’ve paid for the least amount of travel coverage to save money on your premiums.
If the amount paid by your insurer after an emergency or accident doesn’t cover your expenses and you have to pay more money out-of-pocket, you’re most likely underinsured. This results in severe economic losses for you.
Over-insurance occurs when you purchase too much coverage, and the coverage exceeds the risk that’s insured. For instance, if you only travel once a year during the holidays, taking an annual policy is over-insurance as you’re paying for multiple trips.
The problem with over-insurance is that it increases your premiums, making your travel insurance costly.
How to avoid both
The best way to avoid over-insuring and underinsuring is by identifying your travel insurance needs so that you can pay for exactly what you need. For instance, if you’re going to partake in dangerous sports activities such as skydiving, you may want to get additional cover so that you’re safely insured from injuries. If not, skip it to avoid over-insurance from travel insurance providers.
Similarly, don’t insure refundable trip costs as it only raises your premiums. Instead, insure pre-paid and non-refundable costs.
All in all, know what you’re going to do and the risks involved, where you’re travelling to, and how many times you plan on travelling in a year before purchasing any policy.
Additionally, compare quotes from different insurers to know what’s covered and what’s not. This can help you get a better policy at a competitive price. You can use our resources here at Compare Insurance to compare policies from various providers.