Do
you need travel insurance? If so, what type of travel insurance? Of course this
depends on your specific situation. Your credit card may say that they provide
free travel insurance if you purchase the trip with their card; however, the bottom
line might be that they only really pay a small sum of money to your estate if
a plane that you are on crashes and you are killed. This is only if your family
your family knows to file the claim with the credit card company within the specified
time period.
The two big risks that are at least partially covered by
most travel insurance policies are the costs of either changing or canceling your
travels and the cost of any medical care or emergency assistance while traveling.
There are usually small amounts of other coverage such as for lost or damaged
luggage, but issues like these are relatively trivial amounts of cover and insignificant
risks. Most policies include a large
amount of air death insurance, because the risk for this is so low. This should
make people who are afraid to fly breathe a little easier! Some travel policies
will offer to cover car rental risks for an extra cost per day of coverage. These
rates are usually much less expensive then what you would pay to the car rental
company. If your regular car insurance policy does not include coverage for when
you drive rental cars (keep in mind that most policies do) and if you do not have
some type of protection through a credit card, then this is a much better way
to cover yourself then to buy the expensive cover from the rental car company. Try
to understand what your possible costs might be if you end up needing to change
or cancel your travel plans. Then decide if you actually need to insure against
that "worst case scenario," and how much coverage you should have. Normally,
the cheapest airline fares have the most risk regarding changes and cancellations.
It can sometimes cost more to change your flight home then to just be another
ticket. On the another hand, if you are flying on an unrestricted first class
fare, you might not need any cancellation/change coverage at all because your
ticket can be changed at any time, for free, and if cancelled, you would get a
full refund.
Basic Travel Insurance
Most travelers want insurance
that covers a single, expensive trip involving a major up-front expenditure. This
insurance is intended as a protection of your investment should something go awry
before or during your trip. The insurance protection will cover your contractual
obligation to the tour company or cruise line and refunds you any deposits that
you have already made. Of course there are restrictions - a change of heart is
not covered! Some incidents commonly covered by basic travel insurance include:
- You
or an immediate relative planning to travel with you are injured or become sick.
- You
are called for jury duty.
- You
are called for military duty.
- Your
home or business is made uninhabitable due fire, flood, burglary, vandalism, or
natural disaster.
- You are fired
or laid off from a job held more than a year through no fault of your own.
- Your
talents are required for an acquisition or merger in which your company is involved.
Always
buy your insurance from a third party, not the tour company or cruise line with
whom you booked your trip. If the company goes out of business between the time
you paid your deposit and your date of departure and you took out the "house"
travel insurance with that company, you will most likely not get your deposit
back. Also, due to several cruise lines and tour companies going belly-up, some
travel insurance companies created lists of companies whose trips they will insure.
There are some companies that insurers will not cover, so always check before
you put down a down payment on your trip. Also
keep in mind that some aspects of your travel insurance may offer primary, secondary,
or tertiary coverage. Primary coverage means that the travel insurance policy
will be the first to pay if anything goes wrong. Secondary coverage means that
if you have other insurance that covers a problem, your travel insurance will
only pay once you have claimed as much money as possible from any other insurance
you already have. Tertiary, of course, means that your travel insurance is third
in line to help pay the costs. The most important difference is most clearly seen
with car insurance. If you have a large claim, you do not want to have to use
your regular auto insurance because they might then choose to increase their rates
and you lose your good driving history with them. If the travel insurance is the
primary insurer, then you do not have to go through your regular auto insurance
at all. If your travel insurance is only secondary coverage, then they will not
pay a dime until your primary auto insurance has paid up. Primary coverage is
always the best option. Another issue
to keep in mind is whether the insurance company pays the claim direct to whoever
seeks payment. Other policies require that you pay up front and then seek reimbursement.
Can you afford to pay these costs up front? Keep that in mind when comparing policies. For
the frequent traveler, it is possible to buy an annual travel insurance policy
that covers you for potentially as much travel as you do in an entire year. An
annual policy is considered a better buy for people who are always on the go,
and not just planning one or two trips for the year. Trip
Interruption Insurance
If your trip does get interrupted, most travel insurance
policies also cover the costs. You will be refunded at least a portion of the
cost of the trip. Some situations that are usually covered include:
- If
you, your traveling companion, or an immediate family member become seriously
ill.
- If your cruise company, airline,
or tour company goes bankrupt. However, many policies require that you purchase
the policy within two weeks of having made the deposit on your trip in order for
this coverage to be valid. Also, if you use a credit card to make the payment,
you must file a dispute claim with the credit card company usually within 48 hours.
The insurance policy will only refund to you what the credit card company will
not.
- If there has been an act
of terrorism at your destination. However, if the State Department has issued
a travel advisory about one of the countries you intend to visit or travel through
at the time you purchase your policy, you are not covered if there was a terrorist
incident before or during your trip. Also, you are usually not covered if there
has been an act of terrorism within the last year in the country you intend to
visit.
- If an airline, cruise operator,
or tour-company is shut down for 24 hours due to labor actions, weather, or natural
disaster.
- If you are hijacked,
quarantined, or required to serve a jury or appear in a legal case while traveling.
- If
you or your travel companion are involved in a traffic accident en route to your
point of departure. However, you must file a police report to qualify for this
coverage.
- You or your travel companions
are active military personnel reassigned or your personal leave is revoked 10
days prior to your departure date. However, if your leave is revoked due to war,
an act of terrorism, base or unit relocation, or a disciplinary action, you will
not be covered.
Medical Coverage
Some
people think that their personal health insurance will pay for any medical emergency
anywhere in the world. This is not the case. The coverage you receive while traveling
tends to be minimal to none at all. Usually
the biggest catch to travel medical coverage is a waiver which denies coverage
if the loss was related in part to a pre-existing condition. If you have a pre-existing
condition before you buy your trip you will want to secure insurance 7 to 14 days
after buying your trip. Otherwise you will not be covered if a pre-existing condition
requires you to cancel or interrupt your trip. Your condition must be stable and
you must also be physically able to travel at the time of purchase. Some policies
even require that you have not seen a physician about your pre-existing condition
or that you have had no symptoms six months before you travel. Sometimes these
restrictions can be waived, but there is often a cap of $10,000 of coverage. Medical
Evacuation Coverage
Credit cards normally carry medical evacuation insurance;
however, this is only to the nearest medical facility and you may not want to
be treated at the nearest facility. Travel insurance will normally allow transportation
to a facility near your home if the attending physician determines that adequate
medical help is not available locally. There is usually a cap to this coverage
and medical evacuation can cost as much as $50,000. If you have a medical emergency
and have to be flown back home on a stretcher; that can require the airline to
take out a block of nine coach seats to make space for the stretcher. Obviously
this is a very expensive service. In order to help cover this potentially huge
expense, there are some medical evacuation plans that are separate from regular
travel insurance. These plans require an annual fee and will fly you in a medically
equipped jet to the hospital of your choice at your discretion. Travel
Insurance and Terrorism
Some policies cover terrorist acts, however the
requirements are very specific. For example, the terrorism event as defined by
the U.S. State Department must occur in a foreign city in which you are scheduled
to arrive within 10 days following the incident Comparison
Shopping
After you have worked out exactly what type of coverage you need
for your trip, then compare the policies against each other for the best deal.
Always check the fine print! If you have any questions about whether or not something
is covered, do not try to figure it out, and never assume! Call the insurance
company directly and ask. If the policy covers more than you actually need, that's
fine as long as you do not add on little extras that are not really necessary.
Never consider a policy that offers less than what you need because being half
insured is false economy. Either buy full travel insurance or none at all. Be
sure to find out when payment is due, when coverage starts and stops, and how
to file a claim. If you ever feel unfairly treated by your insurance company,
notify your state's Insurance Commissioner in order to resolve the dispute. The
website http://www.InsureMyTrip.com
offers comparisons between many different companies and policies. Take this information
and compare it to any travel insurance offers made by your travel agent or tour
operator in order to make the most informed decision. |
