There are plenty of insurance plans present in the market to select from, and choosing one can be overwhelming. You want coverage for your car, home, life, health, job, retirement, and, oh yeah, your travel.
So, what is gap insurance?
Gap insurance(short for “Guaranteed Access to Purchase”) is a type of insurance that covers you if something goes wrong while traveling. For example, if you get sick, the gap insurance would pay for medical treatment (or your deductible), lost luggage, or if you need to cancel your flight for some reason. A gap is covered by the insurance company, preventing you from suffering financial hardship.
Gap insurance is coverage that kicks in whenever you leave a job or house. Basically, it replaces whatever is lost, so you won’t have to worry.
So, what’s the difference between gap insurance and travel insurance?
The main difference is that gap insurance is used to reimburse costs related to a time-out. Essentially, it covers expenses related to a delay in expected income.
Travel insurance is a valuable product that can give your trip some extra security, but it’s essential to understand what gap insurance is and whether it applies to you. If you don’t have gap insurance and you’re involved in an accident, the costs of your medical care could quickly add up.
What is the essence of gap insurance?
The word “gap” refers to the time between when you pay your insurance premiums and when you use that money to cover an injury or medical condition. If you have ever been involved in an accident or suffered some injury, you know the importance of having insurance to pay for the medical bills and lost wages you incur.
Here are some of the most common reasons people buy gap insurance:
- Planning to study abroad or looking to take a gap year.
- Traveling abroad for the first time
- Going back to school or changing jobs
- Experiencing a medical emergency
- Getting married
- Other life changes.
How does gap insurance work?
GAP insurance allows travelers to buy a ticket without taking out a loan to pay a deposit. In the event of cancellation, the traveler still receives a refund, but the event organizer cannot sell the space to someone else. It usually comes in a prepaid card, which the traveler can rent space for a specific time.
If you’re a frequent traveler, you’ve probably come across the term “gap insurance”, while researching your options for trip cancellation, travel, or departure insurance. It is a type of insurance that covers a list of costs incurred by someone traveling. Given the uncertainty of the world we live in, the idea of permanent job loss, health issues, or the natural passage of time, it is pretty understandable that folks would want to have some coverage.
Gap insurance is optional insurance that helps you replace the cost of your trip if you cancel a trip. It is not an expense but an insurance policy that enables you to return the expenditure if you change your plans. You may want to consider gap insurance if you have to cancel a trip due to illness or a delay in getting a ticket – either way, you cannot make up the cost of the trip.
When you leave the country, it’s easy to assume that your medical insurance will cover you, and you won’t need to worry about how to pay for emergency medical care. But if you don’t have a medical card, or you’re traveling specifically to a destination that doesn’t accept your insurance, you might want to check into gap insurance.