How to Buy Travel Insurance

 

When is the best time to buy travel insurance? For a variety of reasons, it is prudent to purchase travel insurance when you first book your trip (i.e. make your first payment for travel arrangements). Why? Most travel insurance policies contain one or more time sensitive provisions that broaden coverage.  Time sensitive provisions which may be included in a policy are: waiving of Pre-Existing Conditions Exclusion; travel supplier Bankruptcy or Insolvency coverage and the Cancel For Any Reason Benefit.

While there are many costs associated with travel, not all travel arrangements need to be insured.   Travel Arrangements can be made for the following:

  • Air Arrangements – prepaid airfare
  • Land Arrangements – prepaid costs for tours, hotels, etc or for ground transportation such as trains, rental cars etc.
  • Cruise Arrangements – prepaid costs for river or ocean cruises

Of course, most trips involve a combination of Air, land or cruise arrangements, and it is important to know which should be insured.

Fully refundable arrangements (i.e. without any penalties or restrictions) need not be insured. For example, many first class airline tickets, and some business class tickets are fully refundable.  You should only buy travel insurance for prepaid and non-refundable travel arrangements. Non-cash transactions such as use of frequent traveler awards, early bird discounts etc, generally cannot be covered as these items have no cash value.

Generally, you should always insure the full cost of any prepaid, non-refundable travel arrangements, as there will be additional limitations and exclusions if you insure less than the full cost of your non-refundable travel arrangements.

Although there are many covered reasons for the Trip Cancellation Benefit, not every possible reason is covered. Travel insurance policies do not cover fear of traveling or a change of mind or other similar discretionary reasons.  Cancel For Any Reason gives the traveler 100% freedom to cancel a trip for a non-covered reason, generally 2 days or more before the scheduled departure date, and be reimbursed for a percentage of the cancellation penalty amount (such as 75% or 80%).  Of course, if a trip is cancelled for a covered reason, then reimbursement would be at 100% of the cancellation penalty amount under the Trip Cancellation Benefit.

Cancel For Any Reason is time sensitive and must be purchased within a specified period (such as within 15 days of the date of the initial deposit for the trip).  Remember unlike covered reasons such as sickness or injury, you do not receive reimbursement for your entire cancellation penalty amount.

Non-covered medical conditions, divorces, canceled wedding plans, economic hardships, a change in plans, just a few of the types of reasons not typically covered under Trip Cancellation, but covered under Cancel For Any Reason.

Most travel health insurance policies exclude losses resulting from “Pre-Existing Conditions”. While the policy language may vary from company to company, generally, policies exclude any condition treated or recommended to be treated in a 60 to 180 day period prior to the purchase of the policy.

Some “Good” policies and all “Better” and “Best” policies available on TripInsurance.com include a provision to waive the Pre-Existing Condition Exclusion if you purchase the policy shortly after your first payment for your trip, generally within 15 to 21 days.

A travel insurance plan is composed of a package of benefits intended to protect you, your travel investment and your belongings. At a minimum, a good plan will provide benefits for:

  • Trip Cancellation to reimburse your non-refundable travel arrangements should you have to cancel your trip for a covered reason prior to departure.
  • Trip Interruption to reimburse your unused travel arrangements should you have to interrupt or return home early from your trip for a covered reason.
  • Medical Expense/Emergency Assistance to cover medical expenses and emergency transportation for a serious illness or injury that occurs while you are traveling.
  • Missed Connection to cover additional expenses that you must pay to make alternate travel arrangements when a flight connection is missed due to reasons such as bad weather or mechanical issues.
  • Travel Delay Benefits to cover your out-of-pocket expenses for meals and accommodations when you are unexpectedly delayed due to flight delays or cancellations or for other similar covered reasons.  Generally, you must be delayed for a specified amount of time, such as 6 or 8 hours or more.
  • Baggage and Baggage Delay to cover loss or damage to your baggage or personal items or the cost of buying toiletries or personal articles if your baggage is delayed for a specified amount of time, such as 8 or 12 hours or more.

The following benefits or coverage enhancements may be included in the “Better” or “Best” plans:

  • Enhancements to provide more covered reasons if you have to cancel or interrupt your planned trip. Many of the “Best” plans also include a Cancel For Any Reason Benefit which allows you to cancel your trip, generally two days or more before scheduled departure, for any reason whatsoever and receive a benefit for most of your non-refundable trip cost.
  • Higher levels of protection for most benefits
  • Additional benefits for:
    • Accidental Death and Dismemberment
    • Rental Car Damage

To understand which one of our travel insurance plans (Good, Better or Best) is right for you, it is important that you understand the benefits offered and how they may help you. For example, if you will not be renting a car on your trip, you will not need to purchase a rental car damage benefit. If you are traveling within the United States, higher limits of medical protection may have less importance to you.

Travel insurance benefits are conditioned upon key concepts, terms and provisions which define not only what is covered, but items that may not be covered or are limited by definition. Understanding what these provisions are and how they work is key to understanding what you are buying.

Unforeseeable losses: travel insurance like all other insurance is designed to provide coverage for unforeseeable losses which occur after your purchase of the policy. If a circumstance or event has occurred prior to your purchase, generally, it will not be covered.

Example: you will not be covered for a loss due to a hurricane if you purchased your policy after the hurricane has been named, because once named and known, it is no longer unforeseeable that a loss may occur.  Remember, you cannot insure your car for collision damage after the accident!

Definitions: the policy definitions detail the meaning of the important terms and conditions of the policy you purchase.  Definitions are used to give specific meaning to what is covered and what may be excluded from coverage or otherwise limited.  If you are canceling your trip due to a sickness, injury or death of a member of your family, to be covered, the individual must be a “Family Member”, as defined.

Example: most “Family Member” definitions include a wide variety of relatives from grandparents to grandchildren, to Domestic Partners and to relatives of spouses and Traveling Companions, but generally do not include cousins.

Exclusions and Limitations: policy exclusions detail losses, events or circumstances that are specifically not covered.  There are two types of exclusions.  General exclusions apply to the policy in total, while specific exclusions may apply to a given benefit or circumstance.

Example: typically all policies have a general exclusion for war or acts of war.  Some policies may exclude losses arising from an epidemic or pandemic.  If you are purchasing a policy because of concern about an epidemic flu outbreak, you should not purchase a policy with this exclusion.

Since policy provisions, definitions and exclusions determine the scope of the coverages provided, take the time to review the policy/certificate before you buy, to better understand what you are purchasing.

Generally, the more coverage the better the plan. All plans that include a trip cancellation benefit provide coverage for sickness, injury or death, but may or may not cover a Pre-Existing medical condition.  “Better” and “Best” policies may cover many of the following additional reasons:

  • involuntary termination or transfer of employment
  • air carrier delays or cancellations due to strike, bad weather or mechanical breakdown
  • damage or destruction of your home or place of employment
  • a terrorist act or incident
  • revocation of military leave
  • Bankruptcy or Insolvency of an airline or other travel supplier
  • Cancel For Any Reason Benefit

Purchase the best coverage you can afford. While people often focus on one or two concerns such as elderly relatives or political unrest that might affect travel, it’s the unexpected that happens: like Icelandic volcano eruptions, Tsunamis, earthquakes, hurricanes, winter storms, torrential rains and on and on… that can affect you or your travel investment.

Often younger individuals and families assume that travel insurance is not for them. Older persons better understand the need to purchase travel insurance for travel health insurance benefits. As we age we are more likely to suffer illness or injury, it’s statistically a fact of life!  But there are still many risks that younger families need to cover with travel insurance.

The reality is that many trip cancellations or interruptions are due to the sickness, injury or death of family members both young and old.  Travelers in their 30’s or 40’s might have to cancel a trip due to an illness of a young child, an elderly parent, grandparent or other relative.  And what about job termination, transfer of employment or a host of other reasons?

Don’t think of just yourself and what might happen to you when purchasing travel insurance.  Think about what might happen to your children, parents, grandparents, etc.  Can you afford to lose your travel investment or the extra cost to return home if one of your children ends up in the emergency room?  Check out our competitive rates on family travel insurance.

What if you are unable to take your planned trip? Are some of your payments non-refundable?  This benefit covers the non-refundable trip costs when you must cancel your travel plans.  All plans cover cancellation for covered medical reasons (such as Sickness, Injury or death of you, a Family Member or Traveling Companion).  Additionally, certain non-medical reasons will be covered as well, such as: air carrier delays or cancellations, theft of travel documents, damage or destruction of your home, etc.  The more reasons that are covered, the better the plan. It is as simple as that!

When deciding to purchase travel insurance, many people consider only their own health.  For example it is not uncommon for younger people to assume that because they are healthy, travel insurance is not needed.  But what about parents, grandparents, children, grandchildren, aunts and uncles? Remember travel insurance covers you if something happens to you or to any of these people, causing you to cancel your trip.

Your child is sick at home and you need to return home early from your trip.  How do you get your money back for the remaining time you will miss?  This benefit covers the cost of your unused, non-refundable land or water travel arrangements and the additional air expense to either resume your trip or return home, if you interrupt your travel plans and/or return home early from your trip for the same types of reasons listed above for Pre-Departure Trip Cancellation.

You may have to interrupt your trip due to a sickness, injury, or death of a family member either on the trip with you or at home.

While on your trip, you fall and injure yourself.  Does your insurance back home cover these medical expenses?  This benefit reimburses you for medical treatment during your trip if you become sick or are injured while traveling.  Travel health insurance typically covers the same types of expenses covered by personal health insurance plans.  Additionally, air transport expenses (such as upgraded air arrangements, air ambulance, including doctor or nurse escort expenses) for medical evacuation are covered, if required to obtain the appropriate level of care needed for your condition.

Did you know that many employer provided health insurance plans and supplemental medical plans provide little or no coverage while traveling while outside the United States?  And even those plans that do provide limited medical coverage often do not cover the medical evacuation transport expenses required in emergency medical situations.  Government plans such as Medicare do not cover any expense incurred outside the United States.

This benefit covers you for reasonable expenses for transportation to the nearest place of safety if a formal recommendation from appropriate local authorities or the US State Department is issued to leave a country due to: 1) a natural disaster; 2) civil, military or political unrest; or 3) being expelled or declared a persona non-grata.

Strikes, bad weather, mechanical breakdown and other carrier delays can cause you to miss your connecting flight and force you to make alternate travel arrangements, sometimes with a different airline entirely.  When the reason for your carrier delay or cancellation is considered an “Act of Nature” (such as bad weather or other situations outside of the airline’s control), you may be forced to pay for the alternate arrangements to join your trip.  The Missed Connection Benefit covers the cost of these additional arrangements when you miss your flight connection due to a carrier delay, generally of three hours or more.

Having travel or flight insurance with the Missed Connection benefit gives you more choice when making your alternate travel arrangements, because you will not be limited by cost of flights available from your original carrier and may allow you to join your trip sooner.

What if you are stranded overnight in a connecting city due to bad weather? Who is going to pay for your hotel stay and what about meals? The Travel Delay benefit reimburses you for meal and hotel expense due to carrier and other covered delays of 8 or more hours.

Airlines don’t pay these expenses unless they are responsible for your delay. Most delays are due to bad weather, which is beyond an airline’s control, and the bad weather causing your flight delay could even be in a city not on your itinerary.

What happens if your bags are lost or delayed? While your personal articles are generally covered by homeowners insurance, most policies have significant deductibles and possibly coinsurance limitations.  The baggage benefit provides coverage on your baggage and personal items without deductible or coinsurance requirements. If your bags are delayed for 12 hours or more for a covered reason, the baggage delay benefit reimburses you for the purchase of toiletries and personal articles during the delay.

Collecting reimbursement from an airline for lost baggage is difficult, at best.  Each airline has different requirements and rules that also vary from country to country.

Renting a car on your trip?  How do you cover your liability for damage to the rental vehicle?  With the Rental Car Damage benefit, you are protected for covered losses to the vehicle.

Buying Collision Damage Waiver from a car rental company is the most expensive way to insure a rental vehicle.

Want to protect your family in the unlikely event of your death from an accidental injury while traveling?   This benefit provides a payment to your estate if you die from an accidental injury.  Generally coverage is provided on a 24-hour basis during your travels and additional coverage may be provided for commercial air travel.

Tips on How to Buy Trip Insurance

When you’re going on a vacation or a trip, thinking about what might go wrong is probably the last thing you want to do. Don’t skip this important step in your travel preparations! Buying the right travel insurance plan can give you peace of mind, so you can focus on enjoying your trip. At TripInsurance.com, we understand that it can be overwhelming to compare the many different insurance policy options available. We will help you find the best plan for your needs and specific travel destination and activities – at the right price! To get you started on your travel insurance planning, here is a step-by-step guide on how to buy trip insurance.

Read More

1. Find Out Your Travel Insurance Needs

The first step of your travel insurance planning is to look at all of your travel plans to find out whether you need insurance for your trip, and what aspects of your trip need to be insured. If you are going on a short, local trip within the US and don’t need to make a large deposit, you probably don’t need travel insurance. However, in most cases, you need trip insurance.
  • If you are going abroad
  • If there are any risks of delays in your travel
  • If you have to make a large, non-refundable deposit
  • If there is a risk you have to cancel or interrupt your trip.
Those are all good reasons to buy trip insurance.

Your Specific Personal and Family Circumstances

If you or anyone travelling with you has any pre-existing medical conditions, you should consider looking for trip insurance policies that cover trip cancellation, trip interruption and medical coverage for pre-existing conditions. Also, think about your general family circumstances, not just who is going on your trip. You might have elderly parents at home, who could get sick or pass away while you are on your trip, so you have to interrupt your trip to tend to this medical emergency. Also, your boss could cancel your vacation, your children’s school year could be extended, or something else. Your specific personal and family circumstances have specific risks that you’ll need to factor in when you look for the best travel insurance policy for your trip.

Destination and Activities

Perhaps you are going to a destination that could be susceptible to a terrorist attack, natural disasters, or an illness outbreak? Then you’ll need to factor those risks into your planning when you look at different insurance policies and trip-cancellation policies.

Risk-vs.-Cost.

Think of trip insurance as a way to protect an investment. For example, if you have to make large non-refundable deposits for your trip, trip insurance is probably a good idea since that money is lost if you have to cancel your trip or the tour company or travel agent goes bankrupt. Depending on your specific trip and circumstances, the benefits of trip insurance coverage can easily outweigh the costs. That’s why trip insurance should be factored into the total trip cost.

2. Know your Existing Insurance Policies

Credit Card Insurance

For trip-related coverage, check whether you have travel insurance through your credit card. When reviewing your existing coverage, it’s important to pay close attention to the details. Your credit card coverage might not provide you with adequate coverage for your entire trip and might only provide limited coverage for specific aspects of your travel such as cancellation coverage trip interruption coverage. You should also note that credit card coverage only covers trips and items you have purchased with the specific card.

Health Insurance

Whether you are going on an extended vacation or a single trip, check your health insurance. Some health insurance policies might provide medical coverage during your trip. Some health insurance providers such as Medicare only provide coverage in the US, and some only provide medical coverage in the specific provider area. Other health insurance providers only offer limited coverage for trips abroad and might not cover big-ticket items such as medical evacuation if you have to be transported to a hospital that can treat your injury or illness – this emergency medical expense can cost over $100,000 without insurance coverage. If you get sick or injured during your trip, the right travel insurance policy can make sure you have full medical coverage that includes medical evacuation coverage and transportation to your home country. That way, you and your loved ones don’t have to scramble to coordinate medical care in a foreign country. Another benefit to travel insurance is that there is usually no deductible, while most health insurance policies do.

Car Insurance

Depending on your car insurance company, your car rental might be covered. However, most US car insurance policies only cover you when you’re driving your own vehicle or a rental car in the US and sometimes Canada, and you might not have liability insurance that covers damage to other vehicles and medical expenses to others if you cause an accident. Also, look into the local rules around car rental insurance in your destination country.

3. Set your Travel Protection Priorities

Based on your trip insurance existing coverage at the kind of trip you’re going on, determine your priorities when looking for insurance coverage.
  • Are you mainly concerned with trip cancellation coverage?
  • Maybe your focus is on securing comprehensive coverage for medical care?
  • Are you interested in a specific benefit such as pre-existing conditions exclusion or 24-hour emergency assistance?
Your priorities help you focus on what exactly you’re looking for, and what insurance coverage you need and what you don’t need. This step makes it easier to compare options.

4. Compare Travel Insurance Plans and Insurance Companies

There are many different travel insurance companies that offer many different coverage options. To find the best travel insurance for your needs, you’ll need to compare your options and the details of the insurance policies. Getting an overview of all the different trip insurance options can be overwhelming and takes a long time. That’s why TripInsurance.com compare plans tool makes it easier for you to compare your trip insurance options to get the best value.

Check the Details

Make sure you read the details and fine print of the insurance plans. Understanding what the definitions, exclusions, limits, deductibles, co-payments, conditions of coverage can make a big difference.

Balance Value and Coverage

Don’t make the mistake of trying to save money upfront, only to realize later that the plan doesn’t have adequate coverage. If you are worried about having to cancel your trip due to a pre-existing medical condition for yourself or a family member, you want to make sure your trip cancellation insurance covers such pre-existing conditions. Take the time to find the right travel insurance plan now – this way, you ensure that your insurance investment pays off. We have rated trip insurance plans as best, better and good, so it’s easy for you to find a plan that has the extent of coverage you’re looking for at the right price point. You can easily compare the details of each insurance policy and see what plan offers the most value for your trip.

5. Buy your Trip Insurance

When buying travel insurance, timing is key. Many travel insurance providers have coverage options that are time-sensitive, for example waiving of pre-existing conditions exclusion, travel supplier bankruptcy or insolvency coverage. A Cancel For Any Reason cancellation insurance also needs to be purchased within a short period of making the initial deposit for your trip. To get the best insurance coverage and value for money, the best time to buy trip insurance is immediately after buying your trip or making the first deposit of your trip, but better late than never! At TripInsurance.com you can buy travel insurance up until the day before your departure. Most travel insurance companies let you request a travel insurance quote before you make a decision to buy.

TripInsurance.com – a Better Insurance Company

TripInsurance.com makes the process of buying travel insurance easy. Whether you are travelling in the United States or abroad, going on a cruise or any other adventure, we offer many different insurance packages from different insurance providers to meet your needs. We have found the best plans and prices, so you can easily compare options and costs for different types of coverage such as medical insurance, trip cancellation insurance, delay coverage. When you buy a trip insurance plan from us, we’ll be there to help you before, during, and after your trip.