Will US Economic Sanctions cause a travel insurance boycott for travel to Russia?

April 16th, 2014

This question is beginning to raise it’s ugly head as a result of Russian actions in the Ukraine and America’s possible economic sanctions.  For the past several years some travel insurance companies have begun to introduce the following wording in the policies:

“Federal law prohibits unlicensed travel to sanctioned countries by U.S. citizens and permanent residents. Therefore, any expenses incurred or claims made related to travel to a sanctioned country are not covered under this plan, unless the insured is traveling under a license issued by the U.S. Department of Treasury Office of Foreign Asset Control.”

Some companies then refer the traveler to the US Department of the Treasury web site that shows current sanctions:  www.treas.gov/offices/enforcement/ofac/

Going to that site yields a list of Countries that have varying types of economic sanctions and are now not covered by some travel insurance plans.  However,  according to the Department of Treasury’s FAQ travel insurance can be sold to all destinations except Cuba and Cuba is permissible if the traveler has the proper OFAC license.  While some travel insurance companies conform to this standard others extend the prohibition to other Countries that don’t have the same level of economic sanctions; such as Iran, Liberia, North Korea, and Syria.  Are the travel insurance companies using economic sanctions as a guise to not cover travelers to Countries that might have a higher risk or might be politically undesirable?

So will Russia soon follow?  Russia has been a proven tourist destination for many years and is considered more desirable than Iran or the other listed countries.  Will the weight of the market override the travel insurance companies past decisions?     We’ll have to wait and see.

Pros and Cons of Buying Travel Insurance

April 3rd, 2014

Is Travel Insurance Worth It?

Is travel insurance worth it?  What are the pros and cons of buying travel insurance?  We’re asked these questions every day.  Here are some of the answers:

Pros

Vs.

Cons

Travel insurance transfers your risk of possible financial loss to a large pool of travelers via an insurance company and their policy You replace the possibility of a future loss for the certain loss of your travel insurance premium.
Coverage for pre-existing medical conditions is available if eligibility provisions are met. Trip cancellation, trip interruption, travel delay, and missed connection coverages are “named peril” coverage.  Not everything you think should be covered is covered.
Protect against the financial failure of the tour operator, cruise line or airline. Pre-existing medical conditions are excluded from coverage unless you qualify for a “pre-existing conditions waiver”.
Protection if your trip is cancelled due to a terrorism event on your itinerary.  

 

 

Medical evacuations coverage.  This possibility might represent the highest possible loss while traveling.  It is also one of the least probable to happen.
Medical benefits payments can supplement your primary medical coverage.
Help is only a phone call away.  Emergency Assistance while on the trip.  Most travel insurance plans have this feature which is available 24/7.
Payment for additional living expenses if your trip is delayed due to your common carrier.

PEACE OF MIND

Travel Insurance’s 150th Birthday!

April 1st, 2014

Today marks the 150th birthday of travel insurance in the USA.  On this day in 1864, while the civil war was still raging, travel insurance made it’s debut when The Travelers Insurance Company of Hartford, CT opened it’s doors for business.  The Travelers was originally incorporated in Connecticut  “for the purpose of insuring travelers against loss of life or personal injury while journeying by railway or steamboat.”  Later they amended their charter to include all accidents.

Travel insurance has evolved and matured during the past 150 years  – from insuring passengers on trains, steamboats, and stage lines – to modes of transportation that could never have been imagined during Mr. Batterson’s lifetime.

We feel honored to be a small part of that history.  Mr. James G Batterson, was founder and the first executive in charge of travel insurance at The Travelers and our founder, John W. Cook, had the good fortune during his career at The Travelers to be the 8th.  Today we continue that same commitment to excellence at QuoteWright.com, America’s Travel Insurance Store.

Unintended Results When Buying Airline Travel Insurance

March 19th, 2014

Most airlines will sell travel insurance when a traveler buys an airline ticket.  Their coverage is usually priced low to encourage an impulse purchase.  So why do you want to just say no and find coverage elsewhere?  Here are two good reasons:

 1.  Limited coverage:  How do they get the price so low?  Easy, pure insurance pricing is a function of how much do they pay(average claim payment) and how often do they pay(frequency).  When you see a very low price for travel insurance when compared to other plans, than the average claim payment and/or frequency is lower(Some other factors might come into play but that’s another story).  Coverage through an airline usually provides much lower benefits coupled with more exclusions which means a lower frequency because there are fewer claims being paid.  Consider the case of a friend of mine who recently purchased coverage when he bought his airline tickets for a trip to Florida.  Currently he’s in the hospital in Florida and might be in the need of a medical evacuation back to Connecticut however, the airline insurance plan he purchased doesn’t include  either medical evacuation or medical expense coverage.

 2. Complications with other insurance plans:  We are getting more and more client’s asking to insure tours or cruises where they have booked their airfare separately and purchased coverage from the airlines.  To them it’s unreasonable to insure the airfare since they already have however, many travel insurance companies require the traveler to include that cost when calculating their trip cost in order to be eligible for the “waiver of pre-existing” conditions.  Failure to include the already covered airfare may cause them to lose their pre-existing coverage eligibility.  The same situation happens when travelers buy tour coverage from the operator and then add a pre or post trip to their itinerary.  Operator plans very rarely offer the flexibility to cover any pre or post travel so travelers will seek other coverage which exposes them to the same possibility of losing their eligibility for pre-existing coverage.

Because of these factors we strongly recommend that travelers with multiple faceted trips avoid operator offered travel plans and rather shop around and talk to a travel insurance professional to find the plan that is right for them.

Disappearance and Travel Insurance

March 11th, 2014

Over the past several days friends and customers have asked me about the mystery of Malaysian Air flight 340 and how the flight’s disappearance would affect any travel insurance that might be involved.  Before I address this issue I would first like to say that my thoughts and prayers are with the family members who are waiting to hear about their loved ones and that insurance can never replace the loss of a loved one.

Most travel insurance policies sold in the USA have a provision for the disappearance of an insured which occurs under circumstances that would normally be covered by the travel policy.  This provision is either referred to as “Exposure and Disappearance” or just “Disappearance”.  It provides for the assumption that if an insured disappears as the result of a common carrier accident during the term of coverage than it will be presumed that the insured died as a result of that accident after a waiting period of usually a year.

This provision would require two proofs to file a claim:

  1. that the insured traveler was in fact a ticketed passenger on the common carrier and that they were on board at the time of the accident; and
  2. that the common carrier had an accident that would have been covered by the policy.

The first usually isn’t difficult to prove since airlines will have boarding manifests and those manifests will be carefully reviewed by authorities to insure their accuracy.  The second might be more difficult since no trace of Malaysian Air flight 340 has been found and right now it is only speculation as to what happened.