by Suzanne Bair
Travel Insurance Basics
For many of us, travel is a luxury and an investment for our future. However, like any investment you want to protect yourself against any potential losses. That’s where travel insurance comes in. There is nothing like spending hundreds or thousands of dollars on a trip only to have to cancel all or part of it for unforeseen reasons. Travel insurance packages come in a variety of sizes, covering all or just parts of your trip such as airline tickets. But like all insurance, travel insurance will only cover what is included in your policy. Some policies have restrictions on pre-existing medical conditions which is extremely important to note for people with disabilities or other chronic medical conditions. There are also many exclusions that can make using your travel insurance difficult. Purchasing a Cancel For Any Reason policy can be the simplest solution. However, simple doesn’t always mean the best.
Understanding the basics of Travel Insurance can help make your trip a little easier and offer you piece of mind to cover those unexpected changes. Adding Travel Insurance to your over all travel budget can range between an average of 5-15% of the total cost of the trip. Many policies must be purchase between 7-21 days from your initial deposit. It is also important to understand that while some insurance companies offer limited, immediate compensation to assist you during an emergency while you are traveling, most only offer reimbursement for covered claims. Average claims processing times are between 30-60 days.
Types of Coverage
Trip Cancellation or Interruption Insurance provides reimbursement of nonrefundable prepaid fees in the event that your trip is canceled or interrupted due to a covered reason under your policy, up to your set policy limits. Trip Cancellation is when you do not go on your trip at all. Most plans require you to cancel 48 hours or more in advance. Trip Interruption is when you must cancel part of your trip after it has already begun. You will only be reimbursed for the uncompleted portion of your trip, but many plans also include increased transportation costs to return home.
Medical Insurance provides reimbursement for costs associated with emergency medical consultation and treatment, medication replacement, and hospitalization. Some plans also provide coverage to send a young child home or for a companion to be with you in your time of need. For those with pre-existing medical conditions you may need to purchase additional insurance or a more comprehensive plan for your trip to covered. Policies may include dental coverage as well.
Pre-existing Medical Insurance Policies also have additional restrictions and usually must be purchased within 7-14 days of initial trip deposit. In order to be eligible for pre-existing medical coverage you must be healthy enough to travel when the trip was purchased. For travelers with pre-existing conditions Travel Medical Insurance can be extremely important, especially for those travelling abroad whose primary healthcare is Medicare and/or Medicaid; Medicare and Medicaid do not cover travelers abroad.
Evacuation and Reparation Insurance often works in conjunction with medical insurance and provides reimbursement for cost associated with emergency evacuation due to a medical emergency to transport you to the nearest appropriate medical facility that can care for you and in some cases send you home for treatment. In the event of your death, coverage is available to return your remains to your home.
Baggage Insurance provides reimbursement for delayed, damaged, and lost baggage up to policy limits. Depending on your policy you may also have additional features that track your luggage, offer immediate limited cash advances, or other services. Be sure to check your homeowners/renters insurance or credit cards for additional insurance coverage which may be especially important for specialized equipment.
Flight Insurance provides coverage only for the flight portion of your trip and is subject to the policy restrictions. This option is offered directly by most airline companies or third party booking sites, but also as an ala cart option by traditional travel insurance companies. If you are planning a trip with multiple components such as Air, Hotel, Car Rental, and Activities it may be better to purchase a more comprehensive plan which will cover the total cost of the trip.
Collision Coverage works as your auto insurance for your rented vehicle. Some policies offer only comprehensive, while others offer a full list of services similar to your own auto policy, with or without a deductible. Be sure to purchase a policy with high enough limits if you require a modified vehicle (hand controls, wheelchair lift/ramp, etc).
Types of Plans
Cancel for Any Reason Plans are great because just like the name says, you can cancel for any reason, usually up to 48hours before your planned travel. If you or your covered traveling companion, get a cold, break a leg, have a sudden flare up of a medical condition, weather is going to be bad, your caregiver cancels, or any other reason, you can cancel -no questions asked. The down side of these plans is that they are usually a little more expensive and only reimburse for 50-75% of your losses. This means you really need to do the math because the increase in insurance cost and only recouping 50-75% of your travel cost may mean it isn’t worth purchasing for low cost travel.
Comprehensive or Higher Tier Plans Each company offers different plans and different tiers of service but these plans usually offer better value than Ala Cart Plans. Depending on which company and types of coverages you chose, some services may have no or minimal deductibles. Higher tiered comprehensive plans also usually include auto rental insurance, concierges’ services and other benefits. Coverage may also include children under the age of 17 at no additional cost when traveling with a parent or guardian.
Ala Cart Plans and Add-Ons usually offer basic coverage with add-ons for increased coverage or policy limits including: flight only, pre-existing medical conditions, medical coverage, auto rental insurance, adventure sports, business and sports equipment coverage, and more.
Single Trip and Annual Plans Single Trip Plans provide coverage for only one trip, but for frequent travelers who travel more than 100 miles from your home location several times a year, an Annual Plan may be a more economical way to go. Annual Plans usually offer all of the benefits of a traditional Comprehensive Plan including Car Rental Coverage but often with slightly lower policy limits. With Annual Plans there is no need to purchase another policy or inform your carrier of each trip, simply travel and know you’re covered no matter where life takes you during the year.