What are the most common “special” circumstances and how does insurance handle them?

Deanna Cotton is planning a trip to Israel soon. She wants to hedge her bets, and hopes travel insurance will help.

“I want to pick the best travel insurance,” she says. “I’m concerned about weather, illness and who knows what else?”

Ah, the old “who knows what else?”

Yesterday, I noted that no two trips are exactly alike, an obvious but often underappreciated fact. In the second of our five-part buyer’s guide on travel insurance, we’ll explore the “what else” — the unique circumstances that you might be surprised to learn your travel insurance covers.

But before we go there, let’s talk safety. Travel to the Middle East is inherently risky (as, indeed, is all travel). If you have any doubts, check out the State Department’s travel warning for Israel.

Specifically, let’s talk terrorism. Most standard “named perils” policies consider terrorism to be a covered reason for canceling a trip. But certain conditions must be met. The event has to happen at your destination within 30 days of the day you’re scheduled to arrive. Also, you wouldn’t be covered if there’s been a terrorist event at your destination within a month of your plan’s effective date.

Practically speaking, if Cotton is visiting Tel Aviv and there’s a terrorist attack 30 days or less before she arrives, she can be reimbursed for her nonrefundable travel costs. But if the terrorist event happened and you then decide you need insurance, and then another event happens — say, a bus bomb — then you wouldn’t be covered.

What other special circumstances are covered by travel insurance?

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Some airline change fees
If you have to change your trip because of a reason covered by your travel insurance policy, your change fees may be covered. Similarly, if you booked your trip using frequent flyer miles, your policy may cover the fee to redeposit these miles back into your account. Change fees will run you $200 per ticket on the legacy carriers and redeposit fees are $150 per ticket.

Certain hotel cancellation fees
Again, it has to be for a covered reason, and the amount may be limited (usually the first night’s charge, which is the effective cancellation penalty). Note that most hotels will offer a no-penalty cancellation if you let them know about it within at least a day of your arrival. If you file a claim, expect a question about the refund policy from your adjuster.

Lost luggage
If your airline or cruise line misplaces your luggage enroute to your destination, you’re all set when you have travel insurance. Again, check with the cruise line or airline first — they may be able to reimburse you for incidentals — but also, save all those receipts. Most travel insurance covers the cost of buying a new wardrobe and toiletries while you’re separated from your belongings.

Medical expenses
If you’re traveling internationally, chances are your medical insurance won’t cover you if you fall ill. But travel insurance will. Also covered: medical evacuations, in case you need an airlift to a hospital with Western standards.

A work-related cancellation
Many travel insurance policies allow you to cancel your trip for “work” reasons, offering a refund for prepaid, nonrefundable deposits. But the reasons are very specific. They may include being called back to work because of a merger or acquisition, a natural disaster, or having approved time off revoked. Note: You normally must buy your policy within two to three weeks of your initial deposit date.

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So who knows “what else”? Well, it turns out there’s a lot, and surprisingly, many potential circumstances are covered by garden-variety insurance. But, of course, not everything is covered. Tomorrow, we’ll take a look at some of the special circumstances that insurance excludes.

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

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