Ask any traveler who’s had a less-than-favorable experience trying to collect a travel insurance claim whether or not their expectations were unreasonable, and, as one would expect, the traveler will adamantly argue that a canceled trip warrants reimbursement. If the cancelation is due to a pre-existing medical condition, for example, the travel will declare his/her refund expectation as hardly “unreasonable.” While our traveler is probably correct in considering such a dilemma as not being “unreasonable,” until one reads their policy completely, or if one doesn’t consult an expert when purchasing the insurance, the expectation of reimbursement may be “unrealistic.”
If you quickly skim a traveler’s insurance policy, rather than thoroughly scan it, it’s somewhat natural to consider various categories and generic terms as covering everything. Take, for example, “Trip Cancellation” listed in the policy. One would think this term covers any/all cancellations caused by unforeseen events. Unreasonable? Not really. Unrealistic? Definitely.
Visit unbiased travel insurance rating websites, such as www.travelinsuranceratings.org, and here you’ll read scores of woeful tales of travelers whose reimbursement expectations have been dashed. Most boil down to misunderstandings surrounding pre-existing medical conditions or a trip cancellation or interruption for other reasons. In truth, travel insurance policies begin by excluding pre-existing medical conditions from coverage, which also prohibit medical expenses and that of emergency medical evacuation coverage, cancelling or interrupting one’s trip. Additionally, depending on the policy, pre-existing medical conditions of non-traveling family members may also be excluded from reimbursement.
As for flight interruptions, a recent article tells of a traveler who had to buy another airline ticket because she couldn’t fly into a San Francisco airport because the airport was closed due to a crash that occurred. The traveler, a handicapped college professor from California, was returning home. A simple read of the policy would have revealed that the closed airport was not a covered reason for a trip interruption. However, examples such as this evoke sympathy and make for a good story on how the big insurance companies can appear heartless.
How each travel insurance company defines its coverage—or lack of coverage—of pre-existing conditions depends on their exact definition and the specific medical condition surrounding one’s claim. When purchasing travel insurance, rather than trying to interpret how pre-existing conditions are defined, the traveler should shop for a plan that offers a “waiver of pre-existing medical conditions.” While most travel insurances offer this waiver, there are, however, multiple conditions with which one must comply in order to qualify: (1) buy the policy within the required time period (usually 10 to 30 days following deposit), (2) be physically fit to travel when buying the insurance, (3) insure your trip to its full pre-paid value. All these conditions are important. However, the “insure to value” requirement is the one that causes the most heartache. An important factor is that most “waiver” provisions require that you insure to the full, pre-paid, value of your trip. It is important to remember to not round your trip cost down. You may think this practice is immaterial, but in truth, insurance companies have been known to use that as an excuse to deny an otherwise valid claim. In one recent case the amount was only a few dollars less than their total pre-paid value.
Finally, the second most common complaint by travelers comes when s/he fails to understand their coverage, especially the cancellation/interruption clause within a policy. Not all financial losses are covered and what one may think is a “reasonable” loss may, in fact, not be covered at all. Popular trip coverages for cancellation, interruption, and travel delay, are termed “named peril coverages,” meaning the insurance company has a specific list of reasons that can trigger your loss and if it’s not listed within the policy than there is no coverage..
Understanding the basis of these issues will go a long way in helping the traveler find an appropriate plan that will provide more confidence in what’s “unreasonable” vs. “unrealistic.”