There appears to be some confusion about what secondary coverage is and how it works when used in conjunction with comprehensive travel insurance package plans. In visiting some other travel insurance sites that offer travel insurance comparisons I have found the following explanations of secondary coverage:
Secondary Coverage: “Secondary coverage plans require plan holders to have primary coverage, and the secondary coverage only covers those expenses not already covered by the primary coverage plan.”
“On the other hand, plans that offer secondary medical coverage will save you money, but only cover you after your own private health insurance paid most of the medical bill. Be sure to find out if your insurance will cover you where you will be traveling to. Typically, when traveling abroad you are outside of your network and often are not covered. Don’t have any insurance that will cover you when you’re traveling the world? Then primary insurance is your only option.”
Both of these statements are inaccurate and misleading because they both say or imply that you must have an underlying policy first or otherwise you can only consider the primary policies. Possibly they are written out of inexperience or out of a basic misunderstanding of travel insurance. Whatever the reason the real explanation is:
Secondary coverage only requires that you first submit your claim to your underlying insurance plan before the travel insurance company will consider your claim. Usually secondary coverage only applies to coverages where you may receive benefits from other insurance plans that you might be covered for, such as group medical coverage or home owners insurance and may even extend to benefits you might receive directly from the service provider, such as the airline or cruise line in the event your baggage or personnel effects become damaged or lost while they are in their custody. Typical benefits that maybe secondary are medical expense, emergency medical evacuation, and baggage.
What happens if you have no basic underlying coverage? Well contrary to what either one of the above sites say you are not required to have underlying coverage and your claim will be covered to the full extent of the policy.
What happens if your basic underlying coverage doesn’t cover you while traveling (Medicare will not cover outside the USA)? Again, contrary to what either one of the above sites say you are not required to have underlying coverage while traveling. Your travel insurance company may require that you get a statement from your basic underlying plan but you will still be covered to the full extent of the policy.
Why do travel insurance companies offer secondary coverage? They offer it because it usually saves them money which results in lower premiums for you. However, there is a trade off for the lower premium in that you have more paperwork to deal with and it might take more time to get your claim paid because you have to wait for your underlying company to make their payment before the travel insurance company will consider your claim.
So the good news is that you are not required to have underlying coverage in order to be eligible for secondary plans!
Updated June 11, 2014