What travel insurance can and cannot do for you.

I WAS STANDING on the dirt road at about 9pm one night in Puerto Escondido, Mexico. It was May of 1992, and my friend’s “small bag,” the one with all the good stuff in it — passport, camera (analog, this was ages ago) — had been stolen. We were standing beside a pay phone, dialing endless digits to get an international line, when a dog came up and stole the bread we’d bought as a snack for the overnight journey we had planned, and which we never took because of the theft.

Hypersensitive to feeling victimized, I started after the dog, as though I would overtake him, take the bread back and eat it myself.

The theft rerouted us (my friend had to get a new passport). It would have cost her a good chunk of change if she hadn’t had travel insurance.

What is travel insurance?

It’s a policy that you buy before you start your trip that will reimburse you (or your family, in case of death) for certain travel-possible mishaps and emergencies.

What does it cover?

Policies vary, but they often include the following:

  • Trip cancellation insurance
  • Medical coverage (with a cap)
  • Theft
  • Lost and delayed luggage insurance
  • Evacuation
  • Repatriation of remains
  • 24-hour helpline to help you find resources, cancel credit cards, and so on
Buyer beware

Paying upfront: In almost all cases, you will pay out of hand, and be reimbursed. The chances of a foreign hospital or clinic accepting your insurance policy is practically nil. Keep receipts for reimbursement.

Theft reimbursement: If you’re covered for theft, many policies will require a local police report in order for you to make your claim. In some cases, like for petty theft, you may decide not to even bother. For bigger items, like cameras and computers, it’s probably worth the extra hassle. You will need to provide copies of purchase receipts for these items as well.

Hazardous activies: If you’re planning on doing anything that your insurance policy considers dangerous — which includes parasailing, paragliding, skydiving, and hang gliding, and may also include SCUBA diving, downhill skiing, and even mountain biking — you need to make sure your policy will cover these, or buy a hazardous sports rider to include them on top of what your policy normally covers. Otherwise, your insurer can reject coverage on injuries sustained while participating in these activities.

Making a decision

Ultimately, deciding to buy travel insurance (or not) probably depends on how long you’re traveling for, how likely you think it is that problems will occur, and whether or not you want to lay out the extra cash ahead of time to head off the financial crunch later. Policy prices depend on your state of residency, age, and by the price and length of trip and, of course, how complete the coverage is.

There are policies that may cost as little as $200 for a $5,000 trip lasting five weeks. Cheaper options offer lesser compensation or cover fewer items. Read policies carefully and think about what you’ll be doing to figure out if you want to go that route, and if so, what coverage you need.

If you decide travel insurance is a go for you, Matador has recently teamed up with Adventure Shield, a licensed insurance broker selling Travel Guard products. They have three different policies to choose from, including one aimed at the sports traveler with extra coverage for delayed sports equipment arrival.

When you buy an insurance policy through Adventure Shield, they will direct 20% of their revenue on that sale to the Matador Youth Scholarship Fund. The Fund helps low-income high school students from urban high schools who have finished a leadership training course to go abroad.