Travel insurance is more than a luxury; it’s a necessity if one’s trip is to be successful. However, travel insurance is not a cookie-cutter arrangement where one size fits all. Here are 5 things that you should know before buying coverage:
- Know what you need! Travel insurance is designed to replace financial losses. What financial losses are you most concerned about? Do you homework by doing an audit of your current coverages and focus on the large, possible losses – these are the losses that you can’t afford.
- Will your medical coverage protect you while you’re on your trip and out of network? Many group and private plans will modify coverage because you’re traveling out of network. As a general rule Medicare does not provide coverage outside the USA.
- Will your homeowners coverage protect your personal processions while you’re traveling? Most homeowner plans will provide coverage off premise the same as on premise. Check with your insurance company.
- Will your credit card provide travel coverage for your trip? Some credit cards provide travel coverage if you use your card to charge your trip. Check with your credit card company for the limits and the fine print.
- Many travel insurance plans offer enhanced benefits if you buy early. The most important of these enhanced benefits is a “pre-existing conditions waiver”. The “waiver” is not available on all plans and where it is available it is usually free but it does have fine print which can include having to buy the insurance within a specific time following your deposit or first trip payment, being physically able to travel on the day the coverage is purchased, and insuring for value. Pre-existing medical conditions is the single largest cause of complaints involving travel insurance. Getting the “wavier” goes a long way in being a satisfied customer.
- Trip cancellation, trip interruption, trip delay, and missed connection coverages are “named peril”. That means that only those perils or covered reasons named in the policy can trigger the benefits. Don’t assume that any and all valid reasons for cancelling, interrupting, or delaying your trip will be covered. Your concept of valid might be totally different than the insurance company’s.
- Cancel for any reason coverage is available but do you need it? “Cancel for any reason coverage” is a safety net that can be added to some policies by increasing premium by up to 50% to cover travelers for cancellations that wouldn’t be otherwise covered by the basic trip cancellation coverage. Most travelers don’t need “cancel for any reason” coverage however, if you need coverage for a specific reason that won’t be covered by basic trip cancellation than you need this coverage. “Cancel for any reason coverage” is a time sensitive benefit that is only available if you purchase your coverage within the required time period. Plans also require that you insure to value. Underinsuring will invalidate this coverage. Plans will either include this coverage or it may be added as an option.
- Secondary versus Primary coverages. The vast majority of travel or cruise insurance is “secondary” coverage. A common misconception is that secondary travel insurance plans require that you already have primary medical coverage in place in order to purchase coverage. In reality it just means that if you have other insurance that covers the same loss than that company becomes primary (first payers) and the travel insurance company becomes secondary. If you don’t have other coverage than the travel insurance company becomes primary.
Bottom line is to become an informed consumer. Know your needs before you buy and research coverage first. Don’t buy before comparing plans. Plans and prices vary. A 60 year old traveling on a $3,000 cruise can find plans that vary in price from $100 to $350. Without comparing you might end up with the $350 plan when the $100 will cover your concerns.