“Can I afford to lose the cost of my trip if I have to cancel or interrupt my travel plans? ”
If the answer to that question is no, then you want to buy trip cancellation insurance. But how do you find the right plan? How do you determine the plan that best fits your needs? It’s easy if you follow a 4 step process:
1. Take a look at the plan’s benefits. These are the financial losses that will be reimbursed by the insurance company. This is the area of trip cancellation/interruption coverage where the plans are basically similar. Most of them will reimburse the non-refundable deposits and fees if your trip is cancelled or interrupted and will pay additional, economy transportation charges if trip is interrupted.
2. Trip cancellation/interruption coverage is “named peril” coverage. Translated from insurancesse means that the policies have specific “covered reasons” that are recognized by the travel insurance companies as valid reasons for a claim. Read these “covered reasons” carefully because if a cancellation is caused by a reason that is not listed then coverage will not apply. As an example some companies say that as a condition of coverage for “financial default” of an airline, cruise line, or tour operator that the traveler must buy their travel through a third party rather than directly with the airline, cruise line, or tour operator and they must buy the coverage within a specific time period of their intial trip deposit. In addition to “named peril” coverage, one company recently introduce a new plan that allows “cancellation for any reason”. It provides for partial reimbursement for cancellation caused by non-covered perils. The amount that is reimbursed is determined by the plan and is either 75% or 90% of the pre-paid, non-refundable fees. This coverage is ideal for those that need broader coverage than they can find by the traditional “named peril” plans.
3. Look at the exclusions and the pre-existing medical conditions clause. These exclusions are used to limit the “covered reasons” and should be read carefully and in concert with the “covered reasons”. Many of the plans will waive the pre-existing conditions clause if coverage is purchased within a 10 to 21 day period(depends on the plan) from when the initial trip deposit is made. One company will waive the pre-existing conditions clause if their coverage is purchased insurance prior to the scheduled final trip payment.
4. Finally, look at the definition of “family member“. Trip cancellation/interruption coverage usually will include coverage if traveler must cancel or interrupt their trip due to a medical reason or death of a “family member” regardless of whether they are traveling with them. However, not all companies define “family members” the same. Some companies will provide a broader definition than others. Some will provide coverage if a traveler has to cancel or interrupt their trip because of the “family members” of a traveling companions while others will only cover the traveler if their travel companion has cancelled due to the companions personal medical condition and not if due to the companions family.
Another important factor is that trip cancellation insurance is sold as part of a “package” of travel insurance which are plans that are pre-bundled by the insurance companies and contain several travel related coverages. Even more important is that there are no industry standards when it comes to trip cancellation insurance. Because of the differences it is important that you shop around and find the plan that is closest to your needs.
Another helpful hint is that when you are reading a policy you will find some terms and words capitalized. Usually when a word or phrase that is capitalized when it normally shouldn’t be it indicates that it has a special meaning which will be explained in the definitions section of the plan.”
Keep these points in mind will provide most travelers with the tools necessary in finding the travel insurance plan that is best for their traveling needs. There plans include other coverages that may distract the traveler but if trip cancellation/interruption insurance is your primary concern than stay focused on that first and than review the others coverages after you’ve found the trip cancellation that is best for you.