Things to Consider Before Going on Vacation
World travel—for both business and pleasure—is on the rise again, and with it comes increased risk for travelers.
Are You Covered While Traveling Abroad?
Liabilities and risks that most people typically cover with a typical homeowner’s policy or travel benefits from their credit card companies are multiplied when traveling the globe. Everything from personal liabilities to auto coverage to medical coverage, suddenly becomes more complicated and traditional insurance solutions fall well short of providing the needed protection, if they provide any at all.
Driving a car in a foreign country is difficult enough when you aren't familiar with the geography, but it can be a nightmare if you don’t have the right kind of insurance coverage. Relying on the pay-as-you-go coverage provided by car rental companies or other local insurers can be a costly mistake if it doesn't provide the liability limits you might need.
If you travel extensively overseas, it is imperative that you have automobile insurance that provides maximum coverage for the vehicles you drive anywhere in the world. Most luxury car insurance plans include this kind of coverage in their policy. You should also check your personal umbrella policy to ensure that it covers you worldwide.
With most health insurance plans, your full coverage stops at the shores of the United States. The good news is that most developed countries will provide medical care should you need it. The bad news is that you could be laying on a gurney for days waiting for treatment. And, if you’re traveling in a third-world country, you might stand a better chance of survival by refusing treatment.
In all seriousness, if you are a frequent global traveler, you multiply the risk of becoming ill or injured overseas. The only type of medical coverage that can ensure quick and quality medical care is an extended travel insurance policy which provides excess medical coverage for co-pays, deductibles, and hospital charges that are not likely to be covered by your personal health insurance plan. Comprehensive travel insurance plans will also cover the expense of emergency transportation to quality medical facilities.
Personal and Family Security
It is an unfortunate sign of the times that crisis events—such as kidnappings and extortion—are becoming more prevalent, targeting affluent travelers wherever they might go. While much rarer (or at least much less publicized) here in the U.S., these threats are on the increase in countries with troubled economies like Greece and Italy. But, they’ve always been a risk in countries throughout Europe, South America, and Asia.
Anyone with wealth is a target for crime syndicates that prey on the unprepared. Nothing short of a comprehensive insurance package that includes access to security consultants can provide the essential protection. This would include kidnap-for-ransom and extortion insurance as well as training in the basic principles of security. It can also include immediate response to any crisis-event anywhere in the world. Specialty insurers such as Chartis offer comprehensive personal security plans with the expertise to implement protective measures that will substantially reduce the threat.
Protecting Your Finances While on Vacation
The holiday season is almost upon us and for many Americans who haven’t traveled in several years, their vacations have been years in planning. However, even the best plans can quickly come unraveled if you don’t take some extra measures to ensure that your finances are protected before you leave on your trip. Your vacation planning checklist needs to include these essential steps of how to protect your finances while traveling on vacation:
Stick to a budget
Everyone plans their vacations around a budget, but sticking to one is a lot more challenging. If you find yourself overseas and overspending, you could wind up having to dip into your savings back home, and that could be more costly than you think. First, just accessing your bank accounts from abroad generates fees. High ATM fees (where ATMs are available) and exchange fees can add up if you have to go to the well too often. Then, after returning home, you have to confront the reality that you’ve depleted your checking or savings more than you planned. To prevent this possibility, build a cushion on the cost side by getting the best possible travel deals and cutting back on a few luxuries (that 2.5 start motel can be just as charming as a 4 star hotel).
Know your credit card protections
When you use your credit card to cover your travel costs, you’ll have some built in protections such as fraud protection, auto rental collision coverage, trip cancellation insurance (not all cards have this so check with yours), lost luggage insurance, and purchase protection. Review your credit card's protections so you know what you’ll have when you travel. It’s always a good idea to call your credit card company to let them know where you will be traveling to make sure your protections apply.
Automate your bill pay
Make sure all of your utilities, credit card, and loan accounts are set up for automatic bill pay. While it may also be possible to pay them online while you’re traveling, you can’t always count on a good Internet connection.
Take a postal vacation
The surest way to attract identity thieves is to let your mailbox overflow. Most post offices offer temporary mail holds. If not, arrange for a neighbor to pick up your mail. Of course, if you have converted most of your financial accounts to online bill pay, you shouldn't be receiving much in the way of bills, but it's best to be safe and hold all mail.
Use credit cards while traveling
You should always carry some cash, but most of your purchases should be made with a credit card. In addition to the protections, it provides you with a more accurate spending trail for budgeting. Try to use a credit card with the most favorable exchange fees (some cards waive the fees altogether). You need to be aware that, with most cards, you won’t see the exchange fees except when you receive your statement. Also, be sure to let your credit card company know where you will be traveling so they don’t freeze the card if they suspect it has been stolen. Also, check with your card company to see how quickly they will replace a lost or stolen credit card.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.
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