Common Questions About Travel Insurance
Last October I purchased tickets for my family to travel to Japan (where my wife is from) for a nice two-week getaway at the end of February. We had been anxiously counting down the days until the trip, and then news broke out about the Coronavirus that is now quickly spreading around the world. I’m always cautious to avoid getting overly anxious about anything, but as a father of a toddler, I also have to weigh the risks and consider the “what ifs” that could impact my family. After a lot of discussion, my wife and I made the decision to reschedule our trip for later in the year.
When I bought those tickets in October I also purchased travel insurance, and luckily an option that covers any event so I can easily (and cheaply) reschedule our plans. Even though I work in the insurance business, I had never purchased travel insurance before, and this situation is really my first real-world experience in dealing with it. Truth be told, even more experienced travelers know what it is, but are either (1) not convinced of its necessity, or (2) confused about what it can and can’t do. That leads us to the following Common Questions About Travel Insurance…
What is travel insurance?
Like other types of insurance, travel insurance policies cover unexpected expenses. Depending on the coverage you choose, this can include trip cancellation/interruption, transportation (flights, connections, car rentals), lost or delayed luggage, medical emergencies and more. If you can’t afford to pay out of pocket for these things, you should buy insurance for your trip. But there are also a number of myths and misconceptions about travel protection that can lead people to either misunderstand their coverage, or not be covered at all.
My credit card will cover me, right?
Travel Professional NEWS, an online resource for travel industry professionals, pegs this as the number one myth: Though credit cards promote their travel protection benefits, they’re often limited: “While they may offer base coverage for lost or stolen items or trip cancellation (assuming your customer purchased their travel with the card in question), many have low coverage limits, and very few offer any sort of coverage for medical emergencies or evacuations abroad (often, the priciest contingencies travelers may face).”
What about my health insurance coverage?
Your insurer may pay “customary and reasonable” hospital costs abroad, but many other benefits don’t apply outside the country. And Medicare, with rare exceptions, doesn’t cover charges incurred outside the U.S. Medical evacuation (which sounds dramatic but may be simply a matter of not having the right specialists nearby) is not covered. For post-emergency care especially, travel medical insurance is a must.
It’s too expensive!
The typical range for travel insurance is 5-8% of the total cost of your trip. (We’ve seen the range placed at 4-8 and 5-10%.) True, the higher the cost of your getaway the more you’ll pay – but the reverse is also true: If you can’t afford to be out of pocket for a trip cancellation or a tour operator that’s suddenly gone bust, trip insurance provides the necessary protection.
I never see good reviews for travel insurers.
As Nomadic Matt points out, “Most people don’t write good reviews when they are helped.” In his experience, “People buy it, don’t read the exact wording, and make assumptions about coverage. So, when something goes wrong, they scream bloody murder when something isn’t covered or when lacking supporting documents to support their claim and write a nasty review online.” Read the fine print and there will be no surprises.
No one covers pre-existing medical conditions.
Some will, some won’t. Read the policies carefully – and be sure you understand every word of it – including all the terms and conditions. Keep in mind the term “pre-existing” can be broader than you think: If a check-up in August revealed you have coronary heart disease and you have a heart attack a month later in Rome, your insurer may consider the heart disease a “pre-existing condition.” If you have any lingering doubts, by all means pick up the phone and ask to speak to a specialist at the companies you’re considering.
Note: Don’t put it off, advises Consumer Reports: “If you want a policy that will cover an existing medical condition, you typically must apply within 10 days to a month of booking the trip.”
I can get it later if I think I’ll need it.
No. The longer you wait, the more likely something will arise that insurance might be necessary – and then it will be too late. Remember, this type of insurance is for the sudden and unexpected. If they’ve already named the hurricane, it’s too late to buy trip cancellation insurance.
You need to keep every receipt and every scrap of paper to make a claim!
This not a myth; it’s absolutely true. You do have to keep a paper trail: receipts, itineraries, medical records, police reports, you name it. Still, careful documentation is a small price to pay for the peace of mind (and financial protection) a robust travel insurance policy ensures.