According to a survey in 2018, about 38% of Americans are likely to purchase travel insurance before traveling abroad. I think this number will continue to increase as more people start to understand the pitfalls of being in a foreign country when a problem arises, without having purchased coverage beforehand. Countless people have fallen into a terrible financial situation because of this very scenario. Protection is important.\n\n\n\nToday I'm going to teach you the basics of how travel insurance works. Honestly, it's not complicated at all. But I can assure you that failure to have travel insurance before leaving on your trip may result in incredibly complicated situations. Let's begin.\n\n\n\nSometimes hiking up to get a good Instagram photo is a bit risky. Good Travel Insurance coverage is important!\n\n\n\nThe Basics Of How Travel Insurance Works\n\n\n\nResearch & Buy Travel InsuranceIf Problem Arises, File a ClaimPay Deductible, If ApplicableReceive Reimbursement\n\n\n\n1) Research & Buy Travel Insurance\n\n\n\nChoose a policy with coverage that fits your needs. If you plan to go Adventure Traveling in Asia, it is quite important that you have good travel insurance that will cover your unique activities. For example, if you plan on skydiving, you will probably want to have coverage before you jump. Right? Well, many insurance companies refuse to cover activities like this. It is important to do your homework. Here are my favorite travel insurance companies that cover all kinds of amazing activities!\n\n\n\nIn addition to activities, it is important to choose an insurance company that has a deductible which fits your needs. You can purchase travel insurance with a $500 deductible all the way down to a $0 deductible. The price of your premium, obviously, will be different. There is no right or wrong choice, really. Choosing a company with a high or low deductible is completely up to you.\n\n\n\nIn my opinion, if there are two separate companies that have the same coverage but different deductibles, I tend to believe that it is more beneficial to choose a high-deductible ($250 for example) for expensive countries, such as some European countries, and a low deductible ($0) for traveling to Asia. \n\n\n\nIf you are traveling in a western country or Europe and have some type of infection, the final bill will most likely be more than $250 USD so therefore, paying a $250 deductible will be cheaper than paying for the treatment with cash. \n\n\n\nBut if you are traveling in Asia and you get the same infection, there\u2019s a pretty good chance that the total bill will be significantly less than that of a western or European country. Possibly less than the $250 deductible. So therefore, you would never use your insurance because the overall cost would not meet the deductible. \n\n\n\nYou may have a special scenario in which your circumstances may be different. So, the choice is always yours. I am just simply giving you my way of thinking. Also, if you are going cover your trip, you should probably learn when the best time to buy travel insurance is.\n\n\n\n2) If Problem Arises, File a Claim\n\n\n\nIf you unfortunately end up in a situation, and you need to use your travel insurance, you must then file a claim. \n\n\n\nMaybe you went to the emergency room for a terrible accident and you need to file a claim, or, maybe your trip has been delayed significantly and everything is out of your control. \n\n\n\nThere are hundreds of unique scenarios that may arise that require the help of your insurance company. Hopefully it doesn't happen. But if it does, you need to know how to file a claim. \n\n\n\nHere's an example page of starting the claim process with World Nomads.\n\n\n\nHow To File A Travel Insurance Claim\n\n\n\nIt is usually quite easy. You can file a claim using your phone, laptop, or you can call them if you wish. The filing process is usually not very complicated. It\u2019s pretty straightforward. Just type in all of the information that they request from you and submit all paperwork that you have which is related to this particular loss. Then wait for a response.\n\n\n\nAs a side note, if a loss does happen, it is important to keep a photocopy (or take a photo) of all of the paperwork and documents that you are given from related parties (hospitals, airlines, police, etc). Receipts or even if it\u2019s just general information that a local company has sent you - keep it and copy it. It may be important evidence in regards to your claiming-process. Too much information is better than not enough.\n\n\n\nAs another side note, usually individuals have 24 hours to report incidents to specific parties within the local country. If you are robbed, it is important to inform the police and make a report within 24 hours of the event taking place. Failure to do so may result in a denial of your claim. Every insurance company is slightly different, however.\n\n\n\n3) Pay Deductible, If Applicable\n\n\n\nDuring the process of filing a claim, you will eventually need to make a payment of your deductible.\n\n\n\nWhat Is A Travel Insurance Deductible?\n\n\n\nA deductible is the amount of money that you must pay in order to file a claim through the insurance provider. Some insurance companies have a $500 deductible and some insurance companies have a $0 deductible. There are other deductibles in between, as well. \n\n\n\nGenerally, the lower your deductible is, the higher your premium will be. The higher your deductible is, the lower your premium will be.\n\n\n\nRandom rainstorms on a motorbike may be funny...until the tires slip out from under you..\n\n\n\n4) Receive Reimbursement\n\n\n\nGenerally, most insurance companies will send you your reimbursement check after your loss took place. For example if you kept your bags inside your hotel room and went out for a walk, and returned to see that all of your belongings have been stolen - then if your claim is approved, you will receive reimbursement after the event takes place.\n\n\n\nBut events such as hospitalizations are a little bit different. You can usually present your travel insurance card to the hospital, and your insurance company will be billed directly. This is a better option than needing to pay $10,000 with your credit cards and then being reimbursed later.\n\n\n\nHowever, sometimes travelers need to pay for hospitalizations in advance. There are times where you do need to visit a Hospital in the middle of nowhere and insurance companies aren\u2019t something that this particular Hospital works with. So, it is important to keep all of your documents and receipts, and share all of them with your insurance company when you file a claim. \n\n\n\nIf your claim is approved, then you will receive reimbursement after you have paid the hospital with your own payment. This is not an ideal situation, but it may happen. Take clear photos of all of your documents, paperwork, and receipts. Maybe even take a few photos of yourself while in the hospital just to be safe.\n\n\n\nTrying random street foods around the world is fun...until you get food poisoning.\n\n\n\nHow The Basics of How Travel Insurance Doesn\u2019t Work\n\n\n\nHave you ever heard of Insurance Fraud? This is basically any act with the intent to lie or cheat about an incident in order to receive reimbursement from an insurance company. \n\n\n\nTypes Of Travel Insurance Fraud:\n\n\n\nFalse Claims\n\n\n\nTelling the insurance company that you broke your leg and paid for it at the hospital when you actually never broke your leg nor went to the hospital. You are hoping to convince the insurance company that this all happened so you can receive a large reimbursement check. You try to forge documents and convince them that this particular scenario happened.\n\n\n\nInflated Claims \n\n\n\nWhen you file a claim, you make the scenario sound worse than it actually was. Someone stole your purse with all your cash and credit cards, but in order to increase the reimbursement check, you tell the insurance company that you also had a bar of gold inside as well.\n\n\n\nFaked Death\n\n\n\nYou and an accomplice work together to convince the insurance company that you have died in order to receive a large settlement check. \n\n\n\nApplication Fraud\n\n\n\nWhen you apply for your insurance, you write false information in order to get a cheaper rate. Maybe you are 55 years old, but you lie and tell them that you are 25 years old in order to get different pricing.\n\n\n\nWhat if you walk out in to this beautiful water and step on a poisonous sea urchin?\n\n\n\nYou Probably Shouldn\u2019t Commit Insurance Fraud\n\n\n\nIn other words, don't. If insurance companies get the feeling that you are trying to commit insurance fraud against them, there's a good chance that not only they will deny your claim, but they will involve the authorities. This may even involve the FBI. My guess is that you don't want this type of excitement in your life.\n\n\n\nThe way to avoid all of this is to simply follow the rules. Buy travel insurance after you have purchased your trip and your plane ticket, and then simply use it as intended. If a problem does arise, then absolutely file an honest claim! But don't try to intentionally cheat the system. Insurance companies are trained to seek out and spot fraud. \n\n\n\nIt's all fun and games until the Ferris Wheel comes off the hinges and it rolls away with you inside. Ok, that's a bit extreme lol\n\n\n\nIs Travel Insurance Worth It?\n\n\n\nYes! Travel Insurance is definitely worth it! Insurance is a huge piece of mind! Can you imagine traveling to a foreign country and ending up at a hospital from a reason that was not your fault at all? For example, you are sitting in a taxi at a stoplight waiting for it to turn green when suddenly someone smashes into the back of your car. You are extremely injured. You are rushed to the hospital with injuries and are hit with massive hospitalization bills that you cannot afford. Now what?\u00a0\n\n\n\nExactly! Don't try to convince yourself that travel insurance is unjustified. Here are a few reminders why travel insurance is justified. Will there be times when you travel to a foreign country with travel insurance but never need to use it? Yes. In those particular situations, you paid for peace of mind. \n\n\n\nTry not to focus your attention on how much money you can save by not purchasing travel insurance, but rather, focus your attention on how much money you may lose if you don't have travel insurance when you need it the most.