Summer vacations are in full swing for many Americans. Whether you're traveling 200 miles or 2,000, leaving home without taking steps to help protect your financial well-being can be traumatic. Follow these seven travel tips to help guard your wallet from the unexpected.
1. Prepare for the unknown. "Murphy lurks, even in the best-laid plans," says Scott Halliwell, a certified financial planner with USAA. "That's why, for more costly getaways, it makes sense to consider travel insurance."
Travel insurance helps protect your trip against forces beyond your control, like a hurricane or a death in the family. "I've made it a point to cover our big family vacations in recent years. While I was shopping for the coverage, I noticed big differences from plan to plan, so make sure to read the fine print," says Halliwell.
2. Don't advertise your absence. Excited about a vacation, some people are eager to tell the whole world about it. Thanks to social media outlets, such as Facebook and Twitter, doing that is easier — and more perilous — than ever.
"Announcing your vacation plans and posting photos from the beach may let thieves know your home is a prime target," says JJ Montanaro, a certified financial planner with USAA. That's why it's best to wait until the vacation is over to do your bragging. If you can't resist, revisit your privacy settings to narrow the audience. "No matter which approach you take, be sure your spouse and children are on board, too," adds Montanaro.
3. Check your health coverage. An illness or an injury could be devastatingly expensive if it happens overseas, especially if you need medical transport back to the United States. "If you're heading outside the U.S., it's critical that you review your health insurance to see if you'll be covered if you get sick or have an accident," says Halliwell. Many plans won't cover such costs — including Medicare, though some Medicare supplements do. To fill the gap, consider a travel health insurance policy.
4. Make the right rental car move. You may have reserved a car weeks in advance, but once you reach the counter, you'll face a decision: whether to purchase the optional insurance coverage.
"Check with your insurer to learn about your rental car coverage. Typically, if you live and are renting your car in the United States, your rental will be covered by your personal auto insurance," says Montanaro.
There may be some gaps, though, including loss-of-use fees owed to the rental company if a car has to be repaired. If you're renting overseas, you'll generally need to buy protection from the rental car company. Whether home or abroad, your credit card may provide additional protection. Take the time to investigate the details before you hit the highway.
5. Guard your mail. "An overflowing mailbox is a sure signal of your absence and gives identity thieves ample material to do mischief, such as filling in one of those preapproved credit card offers and changing the address," says Montanaro. Have the post office or a trusted friend hold your mail.
"My wife and I make a point to receive many of our bills and documents online. Consider doing the same. You'll cut down on clutter and give thieves one less way to get your information," adds Halliwell.
6. Alert your credit card company. A foreign charge on your credit card may arouse your bank's suspicion, which could prompt it to freeze the account. To avoid that scenario, let your bank know you're heading overseas.
7. Make sure your affairs are in order. While we may just as easily perish on the way to the grocery store, few things remind us of our mortality like the moment a jet's wheels leave the earth. "If, like so many Americans, you haven't quite gotten around to updating your will, appointing a guardian for your children and securing the appropriate amount of life insurance, use your vacation as the extra nudge to take care of those things," says Montanaro.