Will your travel insurance cover you when you need it?

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By Christopher Elliott

If you think your travel insurance policy will cover you on your next trip, you might want to take another look. Travel insurance doesn’t cover everything. Truth be told, it may not cover anything.

The list of exclusions is long and includes everything from pregnancy to scuba diving. When you buy travel insurance, it’s important to make sure you understand what it does — and doesn’t — cover. Don’t wait until the last minute to review your policy. By then, it may be too late.

Consider what happened to Jen Coburn recently when she booked a flight from San Diego to New York on American Airlines. At the end of the transaction, the airline subjected her to a high-pressure pitch for travel insurance, forcing her to choose between ‘protecting’ her trip with insurance or leaving her trip ‘unprotected.”

“I knew my plans might change, so I bought the insurance,” says Coburn, a book publicist from San Diego. (Related: Does travel insurance have too many exceptions?)

This travel insurance won’t cover you

Later, when she canceled her plans, she discovered that she wasn’t covered by the insurance. “They said that I was only covered for a ludicrously few extreme circumstances. The most laughable one was if the airline canceled my flight,” she says. “Yeah, if the airline cancels the flight, I definitely get my money back without the stupid insurance.”

Airlines that sell travel insurance disclose the terms online, but they’re easy to ignore. The coverage was in the fine print,” Coburn concedes, “but I felt duped.”

Michael McCloskey, an associate professor at Temple University’s business school. He says that consumers don’t understand how insurance works. Most travel insurance, he says, is the “named perils” variety. This means it covers only what’s named in the policy.

Fact: There are many exclusions

But travel insurance companies often oversell the benefits when they promote their policies, promising that insurance will “protect” your vacation. In fact, travel insurance only protects what the fine print says it protects. Among the most notable exclusions:

Seven Corners has helped customers all over the world with travel difficulties, big and small. As one of the few remaining privately owned travel insurance companies, Seven Corners provides insurance plans and 24/7 travel assistance services to more than a million people each year. Because we’re privately held, we can focus on the customer without the constraints that larger companies have. Visit Seven Corners to learn more.
  • Preexisting medical conditions: This is perhaps the biggest gotcha when it comes to exclusions. If you have a medical condition before you buy a policy, and it flares up before or during your trip, your policy may be worthless. Some insurance companies offer a waiver of the preexisting condition exclusion. Only if you buy trip insurance within a specified number of days from the date you pay your initial trip deposit. However, more insurance companies are now offering coverage for preexisting conditions, says PK Rao. He is the president of INF Visitor Care, a travel insurance firm. “As preexisting conditions like high blood pressure and diabetes become more prevalent, there’s more demand for coverage,” he says.
  • Pregnancy: Travel insurance generally does not cover childbirth as a medical benefit. Some travel insurance companies provide plans that include coverage for pregnancy-related complications, but these are typically limited to 26 weeks’ gestation and offer lower reimbursement amounts than standard medical emergency coverage. The bottom line is, if you’re traveling while pregnant, don’t count on traditional travel insurance to pay for pregnancy-related medical care.
  • Mental illness: Mental illness is not typically included in travel policies. That includes canceling your flight because you’re afraid of flying or you’re anxious about your safety at your destination; most travel insurance companies summarily dismiss those claims. The fix is to buy “cancel for any reason” coverage. Maxime Croll, leads the insurance research division at ValuePenguin.com, a consumer finance website. She states that a trip can be canceled, and the policy paid out, should a traveler fall into depression or need to tend to their anxiety.
  • High-risk activities: Most travel insurance doesn’t cover high-risk activities such as scuba diving, bungee jumping or even zip-lining. Sheryl Hill is the executive director of Depart Smart, a nonprofit group that promotes travel safety. She recalls the case of a traveler who sustained injuries while zip-lining in Mexico. “He awoke in a hospital in a leg cast with purple toes,” she says. His travel insurance denied coverage for medical evacuation due to the exclusion of zip-lining. It lead him to book a commercial flight back to the United States and delaying his treatment. Doctors could not save his leg.

There is so much more

There’s so much more that traditional travel insurance policies don’t cover that it wouldn’t fit in a single column. But there’s one workaround. (Related: 5 things you must do before you file your travel insurance claim.)

Cancel-for-any-reason travel insurance

“You can buy ‘cancel-for-any-reason’ coverage, which does exactly what it says,” says Steve Pritchard, the founder of Cuuver.com, an insurance comparison site. “This extra coverage can be extremely helpful in protecting you from having to cancel due to unforeseen circumstances. It also gives you the flexibility to cancel your trip should you realize that the trip is no longer to your tastes or is no longer feasible financially.” (Related: Travel insurance policy void without a ring — is that right?)

Bear in mind, though, that a cancel-for-any-reason policy is more expensive and comes with significant restrictions. This type of policy can amount to approximately 10 percent of your trip’s prepaid, nonrefundable cost, in contrast to 4 to 8 percent for a named-perils policy. With a cancel-for-any-reason policy, you won’t receive a full refund but rather 50 to 75 percent of the cost of your trip.

Read the fine print

All of which brings us to the biggest mistake travelers make when they buy insurance. They get the timing wrong. The time to think about insurance is before you book your vacation. You usually have from one to two weeks after booking your vacation to buy insurance.

You also need to read the policy before you buy it, not when you sit down to file a claim. Most travel insurance companies offer a “free look” period of up to two weeks. Change your mind about the policy, and you can get a full refund.

If you read the fine print, you can avoid some of the gotchas. Otherwise, you could discover that your policy is worthless.

For more information visit Elliott Advocacy’s frequently asked questions about travel insurance. 

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter. He is based in Panamá City.

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