QuoteWrights Travel Insurance Buyers Guide

Pitfalls

Some of the most common misunderstandings and misconceptions that can result in having the wrong coverage when you need it the most.

Pitfalls - common misunderstandings  

Pre-existing medical conditions - the largest pitfall and source of most travel insurance headaches.  Up to 25% of all travel insurance claims are due to pre-existing medical conditions. Overcome this by finding a plan that waives pre-existing medical conditions.

Qualifying for pre-existing medical conditions waiver - the biggest pitfall is not insuring the full, pre-paid value of your trip. Rounding your trip cost down or not including fees such as taxes, will in many cases, disqualify you for the waiver.  Don't round your trip cost down!

Covered Reasons - Trip cancellation, trip interruption, and travel delay are "named peril" coverages. That means they only cover the specific reasons that the insurance company outlines in their policy. These are usually referred to a "covered reasons".  If it isn't listed then it's not covered. And all reasons are subject to the policy exclusions. The proper way to analyze trip cancellation/interruption coverage is to:

  1. read the covered reasons, only those reasons are covered;
  2. read the exclusions to see if they modify the covered reason - exclusions trump covered reasons;
  3. read the benefits because that is what the insurance company will pay.

Pre-existing Medical Conditions and Family Members - unless you've qualified for the waiver of pre-existing medical conditions then most policies will exclude pre-existing medical conditions for all "Family Members" whether or not they are traveling. Now you may know the medical condition of all of your "Family Members" but do you know the medical condition of your traveling companion's "Family Member"? Under many plans the pre-existing medical conditions of everyone are excluded from coverage unless the plan provides a waiver and you qualify. Not all plans do this - some plans only apply the exclusion to family members booked to travel with you.

Family Members - trip cancellation and interruption coverages limit coverage to illness, injury, or death of a "family member". Each company defines "family members" differently. Read the definition carefully. If you are traveling with a travel companion be careful as most plans include their relatives as part of your "family" and some limit coverage to only your companion. Might not sound like a big difference, but if your companion cancels due to the death of one of their "family members" you won't be covered under those plans that don't include your companion's family.

Secondary Coverage - not really a pitfall, but it is something that you have to understand. Secondary coverage means that you have to first submit a claim to your permanent insurance policies before the travel insurance company will consider the claim. That means that if you have a medical claim then you have to submit it to your health insurance company first or if you have a baggage claim than you have to submit it to your home owners insurance company.

Protection Plans and Cancellation Waivers - plans that look like travel insurance but really aren't. Be very careful with these and avoid them at all costs. They are called by different names, Protection Plans, Cancellation Waiver, etc, but what they have in common is that they are not insurance and one of their key telltale signs is that instead of a direct payment they provide a "tour" or "cruise" credit for future travel.

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CASE STUDY

Fact:  Husband and wife are planning a trip that costs $3,025 for each.  They buy the insurance within 14 days of their first trip payment and they are physically fit to travel when they purchased the insurance, however, they round their trip cost down and insure for $3,000 per person thinking that the additional $25 of trip cost was immaterial.

Result:  the couple had to cancel due to a flare up of the wife's pre-existing condition.  The claim was rejected by the insurance company because they did not insure the full, prepaid cost of their trip.

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