Understanding Travel Insurance

Understanding the basics of travel insurance is fairly easy – it is insurance coverage designed to protect a traveler from risk of financial loss suffered while traveling.  The most popular type of travel plan is generally referred to as a “package” plan because the travel insurance companies package several of the various types of coverage together to form a bundled “package” of travel insurance.  Coverages that are usually included are;

  • trip cancellation,
  • trip interruption,
  • medical expense,
  • travel delay,
  • missed connection,
  • baggage loss and damage,
  • baggage delay,
  • emergency medical evacuation, and
  • travel assistance.

Some plans also might offer rental car collision cover, accidental death and dismemberment, and flight accidental death either as part of the basic package or as options that can be added to the basic plan.

How to find the plan that is right for you!

First try to determine what you are already covered for by your own insurance coverages:

Medical coverage:   does it protect you “out of area”?  Does it cover you outside the USA? If you are 65 or over and traveling outside the USA the answer for Medicare is no.  Does your medical coverage provide protection in the event you must be medically evacuated (most don’t)?

Rental Car collision coverage:  does your auto policy cover you for a car rental?  Does it extend to travel outside the USA?

Credit cards:  many credit cards provide free or very low cost travel coverages which are usually available only if you use the card to pay for your trip.  If you have these coverage than read them very carefully as they are usually very restrictive and might not provide the level of coverage that you need.

Understanding your current coverages will make you a better informed consumer.  Once you have completed your insurance inventory than you should have a better idea about your coverage needs and about your personal concerns.  Some travelers might be concerned about adequate medical coverage and others might be concerned about protecting their trip investment with a plan that includes trip cancellation coverage.

What to look for when trying to find coverage

Medical coverage:  is the plan primary or secondary?  Is the amount of coverage adequate?  One of the biggest financial exposures that you might have while on a trip.

Emergency Medical Evacuation:   Is the amount of coverage adequate?  Medical evacuations can be very, very expensive totally well over $100,000 for an evacuation from Europe back to the East Coast.  Is the coverage adequate for your destination?

Trip Cancellation/interruption:  these coverages are “named peril” coverages which means that only those “perils” named by the insurance company in the policy are reasons why you can cancel or interrupt your trip.  If you are looking for these coverages than make sure the plan that you are interested in protects you for whatever peril you might be concerned about. If you are concerned about possibly having to cancel or interrupt your trip due to the medical problems of a family member than first make sure the family member is part of how the insurance plan defines a family member and make sure you look for a plan that offers a “waiver of pre-existing medical conditions”.

Pre-existing Medical Conditions:  one of the biggest areas of misunderstanding.   All travel insurance plans have an exclusion for pre-existing medical conditions however, most plans offer a “waiver of pre-existing medical conditions” if you meet certain requirements when buying the insurance.  Usually these requirements are:

  1. you must buy the insurance within 10 to 30 days(varies with plan) following your first trip payment.  Two companies say prior to you final payment date.
  2. you must be physically able to travel on the day you are buying the insurance.
  3. you must insure your trip for trip cancellation coverage to the full, pre-paid value of your trip.  Do not round your trip cost down as this might invalidate your eligibility for the waiver.

Please call us at 800.821.4940 if you need assistance in selecting the right plan.