Thrifty Thinking: Travel and Insurance

You might not think of insurance as a thing to check off your list before going on summer vacation. I had a chance to interview Kim Langford from Kiplinger to find out what people need to consider regarding insurance before taking vacation.

1) In terms of homeowners insurance, is there anything people need to be aware of when they're going on vacation? 2) When should people consider getting an extra insurance rider or personal articles policy?

 

Your homeowners insurance generally covers your possessions when you’re away and provides the same coverage as you’d have if the items were in your home – paying out if your possessions are stolen or destroyed, but not if they’re lost. Also, some insurers cap your coverage at 10% of your insurance limit for possessions while away – so if you have $100,000 worth of coverage for possessions at home, the policy would cover $10,000 worth of items you have with you while you’re away. You can buy special coverage for certain items, such as jewelry, that adds “mysterious disappearance” to the coverage and insures the items up to their appraised value without a deductible. Jewelry coverage typically costs $15 to $20 a year per $1,000 of appraised value. 

Blogger's note: If you have expensive items with you, you may want to check specific limits and exclusions. For example, accidental damage to an expensive camera due to falling over a railing somewhere is likely not covered under your regular policy, but our Personal Articles policy will cover accidental damage as well with no deductible, so if expensive items are coming along, you should check with your agent.

 

3) How about auto insurance - do people need extra coverage for rental cars?

 

Your auto insurance policy covers a rental car at the same levels as it does for your own car while you are traveling in the U.S. You may also have collision coverage on a rental car through your credit card. You generally won’t need to buy extra liability coverage if you have ample coverage on your own policy. You should contact your insurer, however, if you are driving your own car or a rental car outside of the country – the rules and coverages can vary a lot depending on the country. Here’s a great article by my colleague, Jessica Anderson, with more information about rental car coverage and fees (How to Avoid Unnecessary Rental Car Fees).

 

4) If someone has a lower rate on insurance for a car based on low mileage, is there anything they need to do before taking the vehicle on vacation?

 

That’s a great question. Low-mileage discounts are usually based on your annual mileage, and unless it’s a very long trip, it might not bump them up against their annual limits. But if you are in a special program where the insurer installs a device that tracks your mileage, you may want to let the insurer know before you are traveling on vacation, so that trip doesn’t count towards your regular mileage calculation. Either way, it doesn’t hurt to contact your insurer or agent to ask.

 

5) What insurance issues do people need to be aware of if they're traveling out of the country?

 

Ask your insurer about the coverage limits if you’re driving while out of the country. Also, ask your health insurance company about its coverage while outside of the country – most policies don’t provide coverage while you are traveling outside of the U.S., although some may cover emergency care. If your insurer doesn’t provide coverage, you may want to consider a travel insurance policy to cover the gap and to also cover emergency medical evacuation, which can be a major expense if you do need major medical care while traveling.