Here are some of the most frequently asked questions about travel insurance. You can find more FAQs here.
Before you travel
• What’s travel insurance?
• Do I need travel insurance?
• When should I skip travel insurance?
• How do I find the right travel insurance policy?
• Where do I find a travel insurance policy that’s right for me?
• What should I look for in a travel insurance policy?
• What’s the worst travel insurance “gotcha”?
• What are the two types of travel insurance?
• How much should I pay for travel insurance?
• When should I buy insurance?
On your trip
After your trip
• How do I file a travel insurance claim?
• How should I send in my claim?
• What should I include with my claim?
• How long will it take to settle my claim?
• How do I file an additional appeal?
• Where can I find executive contacts at the travel insurance companies?
BEFORE YOU TRAVEL
Travel insurance is insurance that covers accidents, trip cancellation, lost luggage and medical expenses while you’re traveling.
The answer is yes if any of the following are true:
✓ If you’re spending more than $5,000 on a vacation. That’s known as a “big ticket” purchase, and it should be insured.
✓ If you’re a nervous traveler, and just need the peace of mind that comes with a policy. Even if you can’t recover all of your money, you may still be able to take advantage of certain benefits, like trip interruption coverage.
✓ If you’re cruising or taking a package tour. Cruise lines used to be flexible, when it came to allowing passengers to rebook missed cruises. Tour operators were also more lenient. Not anymore. A policy can protect you.
✓ If you have a complex or lengthy itinerary. If you’re on a tour with a lot of moving parts, then insurance could be useful. When one part doesn’t go as planned, the right policy can help you make a quick recovery.
✓ Anytime you leave the country. Medical providers outside the U.S. often ask for “upfront” payments for medical services that can cost thousands of dollars, and travel insurance can guarantee these payments. (This is also true for medical evacuations and repatriations, which can cost tens or even hundreds of thousands of dollars.)
✓ If you’re on Medicare and are traveling internationally. You’ll want to consider a policy that includes medical expenses, since Medicare doesn’t typically cover events outside of the country.
✓ If it’s a short, simple, and inexpensive trip within the United States.
✓ If you’re spending less than $5,000, or if you don’t mind losing the value of what you’ve prepaid for your trip should something happen before or during your vacation. Also, if you have insurance that would cover a medical emergency or medical evacuation, you may not need a policy.
✓ If your trip includes components that aren’t covered by insurance. For example, say you’re staying at a friend’s house, using a voucher, or redeeming frequent flier miles for your vacation. Travel insurance would probably be minimally useful. Some travel insurance policies may cover the cost of redepositing miles when you need to cancel for a covered reason.
✓ If you have a pre-existing medical condition that wouldn’t be covered. Read your policy carefully; some travel insurance policies do cover existing medical conditions when certain requirements are met. Normally, pre-existing conditions that are controlled are covered if the policy is purchased within a certain time following initial deposit and payment of your trip.
✓ If coverage would be redundant. For example, if your credit card or other insurance would cover the same event, then don’t worry about it. Note that some cards won’t cover items like medical evacuations, so if that’s important, then think about insurance. (Most credit cards do not cover medical expenses, and hardly any credit card will cover you for cancellation and interruption.)
An online search for “travel insurance” is likely to pull up a long and confusing list of travel insurance choices, but there are really just three options.
Buy direct. Companies sell insurance policies directly to travelers, usually online. The big players are Allianz Travel Insurance, CSA Travel Protection, Travel Guard, and Travelex. A full list of other insurance companies worth checking out is on the US Travel Insurance Association’s website.
Buy through your travel company. Many travel companies, including airlines, cruise lines, and tour operators, offer optional insurance directly to consumers. These can be a good deal, but it’s worth shopping around before deciding to buy one of these policies. Also, be careful of tour operators or cruise lines that offer generic protection services. They won’t cover you if the company goes belly-up.
Buy through a travel agent or third party. Your travel agent may offer an insurance policy. (More on buying through an agent in a moment.)
You might also consult an online company that specializes in comparing and evaluating insurance policies, such as Squaremouth, Travel Insurance Review, Trip Insurance Store, and InsureMyTrip.com. These can be useful ways to quickly find the best travel insurance policy.
The first time you’ll be given the option of buying an insurance policy will probably be when you book a trip through a travel company or an agent. It’s nice to be reminded about the insurance option, because when you’re planning a big trip, it can easily be overlooked.
Still, experts generally agree you shouldn’t take the first policy you’re offered— no matter how attractive the policy, or how hard the sell. (A few years ago, I would have said travel agents were the worst offenders in this department, but nowadays, websites try to sell insurance by using high-pressure tactics to persuade you to “protect your trip” in bold uppercase letters, making human agents look downright polite.)
Consult with at least two of the three travel insurance sources. Travel insurance is extremely competitive, and by checking with multiple sources, you won’t just find better terms or prices, but also avoid buying a potentially useless policy.
When comparison-shopping, you’ll want to match your own needs with that of the policy, to the extent that it’s possible. Here are a few coverage areas to be aware of.
Accidental death — Provides cash payment for accidental loss of life or limb while traveling.
Baggage — This benefit provides reimbursement for lost, stolen, or damaged baggage or personal items. The coverage usually applies to your entire trip, not just your flight. A subset of this coverage is for baggage delay, which offers reimbursement for clothing, toiletries, and other essential items if luggage is delayed for a specified period of time.
Cancel for any reason — This is a subset of trip cancellation (usually available for a slightly higher premium), and provides for cancellations that aren’t covered by the basic coverage. You may be reimbursed up to 80% of your non-refundable trip payments and deposits if a trip is canceled for a reason other than a “covered reason.”
Deductible — The deductible is a co-pay amount which is the responsibility of the insured. Options vary by plan, and can range from $0 to $2,500. Deductibles can be charged per policy, per individual, per incident, or a combination. Most medical plans require you to select a deductible option, while most travel protection plans offer a zero deductible benefit.
Emergency medical and dental — This pays for the cost of treatment associated with a medical or dental emergency incurred while traveling. This coverage may be secondary to your primary health insurance (if you have it). A subset of this is emergency medical transportation, which arranges to transport a patient to an appropriate medical facility. Some policies may also cover the cost of bringing a friend or family member to you, or getting your children home. Medical repatriation benefits may include arranging and paying for the cost of getting you home, including by air ambulance.
Employment layoff — This provides reimbursement for prepaid, non-refundable trip payments and deposits if you have to cancel a trip because of an involuntary layoff, or termination of employment. Review this paragraph carefully if you think you might make a claim. It can be restrictive. This is usually a so-called “named peril,” or covered reason, for a trip cancellation or interruption policy.
Missed connection — This offers reimbursement in the event of a missed flight connection, or for the additional costs to “catch up” to a cruise if the cause of delay is an accident or bad weather. This is often a subset of trip cancellation or interruption coverage. Requirements may include allowing enough time to reach your flight or cruise and being unable to reach your flight or cruise another way.
Financial default — This coverage is normally offered in the event of a complete cessation of operations due to financial circumstances. The operator doesn’t have to file for bankruptcy. Read this paragraph very carefully, since there’s no standard language. This is a covered reason, or “named peril” of a trip cancellation or interruption policy. Not all travel insurance policies cover supplier bankruptcy. Most travel insurance companies publish a list of travel suppliers that they either cover or exclude for financial default.
Life insurance — This coverage provides an accidental death or dismemberment benefit while you’re enrolled. Coverage can include accidental death and dismemberment while using public transportation or flights. (Although this benefit is sometimes referred to as “life insurance” it is technically a benefit, not a life insurance policy.)
Rental car damage — This coverage offers collision loss/damage insurance for rental cars, and covers the costs of damage to, or theft of, a rental car.
Terrorism — This clause covers you in the event of a terrorist incident. Bear in mind that some plans only provide coverage if you are scheduled to arrive at your destination within 30 days of the incident while other plans only offer foreign coverage. This is a subset of a trip cancellation or interruption policy.
Trip cancellation — This coverage reimburses you for non-refundable trip payments and deposits if a trip is canceled for illness, injury, death, or other specific reasons, or if your destination is uninhabitable. Most trip cancellation language is standard, but it’s worth reviewing to make sure it will cover you in the event your trip is called off.
Trip interruption — This coverage offers reimbursement for nonrefundable trip payments and deposits if a trip is interrupted for illness, injury, death, or other specific reasons. Again, read the language carefully to be sure you’re covered.
Travel delay — This provides reimbursement for meals and accommodations when a trip is unexpectedly delayed for a certain amount of time. Always call your insurance company before you make a travel delay claim, to make sure the terms will apply to your situation. Don’t forget to save your receipts when you make a travel delay claim.
Weather — Most policies will include coverage if travel is delayed due to a mandatory evacuation because of a hurricane or other meteorological event. Be careful with this one. Some policies offer cancellation coverage if only one part of your trip can’t be taken (if, say, your hotel is closed) while others stipulate that the airport or airline has to cancel its flights.
Which policy to buy? Unfortunately, there’s no quick and easy answer. Everyone has to find the right source, and carefully compare policies.
Finding the right travel insurance policy, it turns out, can be hard work.
Clauses that address pre-existing or existing medical conditions. They could affect your ability to make a successful claim. If your policy offers a waiver for existing medical conditions, be sure that you take advantage of the waiver by meeting all of its conditions. Not meeting these requirements is one of the reasons for having an insurance claim denied.
There are two basic types of travel insurance policies. Most are named peril policies that allow you to cancel or interrupt your trip if you experience a “covered reason.” Your policy will include a list of “covered reasons” for cancellation or interruption and will pay you 100 percent of your non-refundable trip costs when you cancel for one of those reasons. These can include an injury or illness to an insured, a close family member or a traveling companion, among other reasons.
The other type of policy is often called cancel for any reason, which allows you to cancel a trip for almost any reason (there may be exclusions, so read the fine print) and will pay you a percentage of your non-refundable trip costs. Cancel for any reason coverage is generally more expensive than a named perils policy.
There’s no authoritative buyer’s guide that can tell you whether you’re looking at a bargain policy or a rip-off. That’s because no two travel insurance policies are exactly the same. They vary based on your age, state of residence, and type of coverage you want.
Travel insurance typically costs between 4 and 8 percent of your trip’s prepaid, non-refundable cost. However, a “cancel for any reason” policy can run you 10 percent of the non-refundable cost, or slightly higher. Your policy may be more expensive if you’re older or engaging in a risky activity that makes a claim more likely, but generally speaking, your premium should be in that range.
A word of warning: If the policy is less than 4 percent of the cost of your vacation, that should raise the same red flags as if it’s more than 10 percent. Too-good-to-be-true “trip protection” policies have cost travelers millions—and perhaps tens of millions—in unpaid claims. If it’s really travel insurance, it will be underwritten by a reputable insurer. One way to check if your insurer is reputable is to see if they are a member of the U.S. Travel Insurance Association.
At the same time, policies that cost significantly more than 10 percent are a reason for concern. Read the terms very carefully, and make sure there’s a good reason why you’re paying that much for your insurance.
You can purchase travel insurance up until the day before you travel from some travel insurance companies, but the sooner you buy your policy, the better.
Why? Well, let’s say your airline declares bankruptcy between the time you book your vacation, and your departure date. You’ll still be able to buy a policy the day before your departure, but if your airline has already filed for Chapter 11 protection, then the policy won’t cover the airline if it stops flying.
Another reason: Most travel insurance policies will offer coverage for preexisting medical conditions that are under control, if you buy the insurance within a couple of weeks of your first trip payment (other conditions also might apply). Since up to 20 percent of claims could be traced to pre-existing medical conditions, this could be an important point, and it removes another potential reason for denying a claim.
So buy the policy sooner rather than later, and keep it between the 4 and 8 percent range, and you’re on your way.
ON YOUR TRIP
Conventional wisdom says you wait until something goes wrong, and then file a claim, but there’s a little more to it.
Your travel insurance company wants to hear from you—needs to hear from you—if you want to be a successful user of a travel insurance policy.
Here’s when to contact your insurance company:
If your policy is wrong. If you see something on your policy that is incorrect, such as a misspelled name, date of birth, dates of travel, or anything else that is inaccurate, contact your insurance company immediately to get it fixed. Inaccurate information can delay your claim.
When something changes. If any of the circumstances under which you purchased your policy have changed—say your travel dates have shifted several times, you’ve added costs or travel suppliers to your trip, or you’ve moved—then it’s best to let the company know.
When something unexpected happens. Many travel insurance customers are unaware that their policies cover items like trip interruption, or will provide assistance when something goes wrong. So, when something that you didn’t expect happens while you’re traveling, get in touch with your insurance company through the emergency number that they provide. You never know; you might be covered.
If you have a question about your policy. It’s better to ask about your policy, and what it does and doesn’t cover, before it becomes an issue. For example, say your policy covers a trip if you lose your job. If you think a pink slip is coming, this might be a good time to inquire about what’s covered.
Timing is important. Read your policy when you receive it, and call if you have questions. Many travel insurance companies offer a “free look” period (normally 10 to 15 days) for all of their insurance policies. If, after reviewing your policy, you decide that it doesn’t meet your needs, you can cancel it (as long as you haven’t departed on your trip), and receive a full refund.
Most travelers feel that picking up the phone is more convenient, but that’s an instinct you should resist. It may be easier, but having an answer in writing—usually by email—is far more useful. It also creates a necessary paper trail that you can refer to if you should ever have to make a claim. If you must call, be sure to get the name of the person you spoke with. Make a note of the time and date. Most insurance companies record their customer service calls.
How about your travel agent or insurance agent? They’re not off the hook after your policy has been sold. Many states require insurance agents and travel agents who sell insurance to be licensed, and if an agent has sold you a policy with promises of coverage, and the insurance didn’t cover you, then you need to take that up with the agent. (More on disputes in the next section.)
While a travel agent or insurance agent can act as an advocate when your claim has been denied—bear in mind, though, that there may be some privacy restrictions that limit your agent from getting involved—you should never rely on them for authoritative information about coverage. In fact, a good agent will insist that you review your policy for yourself before buying.
Always go directly to the primary source: your insurance company. In the event of a dispute, it’s the insurance company’s coverage promises (made through its policy)—not those of your agent—that matter.
If you receive a letter from your insurance company, review it thoroughly, and call the company if you have questions. If you need proof something was said by phone, always get it in writing.
Believe it or not, travel insurance companies want to hear from you before, during, and after your trip. Why? They are as keen as you are to avoid some of the claim horror stories that you might have read, and the only way to do that is to keep an ongoing dialog with their customers.
It’s the travelers that purchase a policy as an afterthought—clicking a button after they’ve booked an airline ticket or hotel—and then forget about their insurance until they have a problem, that are the most problematic. They’ve probably made an uninformed purchasing decision and a boatload of assumptions that they shouldn’t have.
Buying travel insurance is as important as your selection of airline, cruise line, car rental company, or hotel. Becoming a power user of your policy is just as important.
No. Travelers often believe that if they’re buying travel insurance, their entire trip is “covered.” It isn’t, despite what you think your agent told you when you purchased the coverage. No policy covers everything. Rather, it covers you under certain circumstances, which are outlined in your policy. Please don’t wait to read your policy until you have to file a claim — by then, it could be too late.
AFTER YOUR TRIP
First, the good news: According to the US Travel Insurance Association, nine out of ten travel insurance claims are honored .So, if you’re thinking of filing a claim on your policy, it will probably be honored.
Now, the bad news: If you’re among the 10 percent who have been rejected, you could face a long and ultimately unsuccessful struggle to have your claim paid.
You don’t want to end up there.
How can you avoid it? Make sure your initial claim does everything it should.
✓ Call your insurance company before you file a claim. Ask what it needs from you, and if there are any restrictions in your policy that might make a claim unsuccessful (for example, some policies that cover medical problems require that you seek treatment within 24 hours of an incident).
✓ Read your policy. You should have done this before buying the insurance. Now you have to read the fine print with an eye toward answering this question: Will my claim be honored?
✓ Keep all receipts. In fact, you’ll want to retain every scrap of paperwork that could even remotely relate to a claim, including notes from any telephone conversations. Don’t throw anything away.
✓ Ask for everything in writing—bills, invoices, receipts, hotel folios. You can never have enough documentation.
✓ Get the cause of delay in writing, if possible. A lot of claims are rejected because travelers can’t prove a cause of delay. So, if you’re held up, be certain to document the cause, preferably in writing. Finding out the reason long after your trip can be difficult—if not impossible.
Fax it. While you can use e-mail or snail-mail, unless the insurance company offers some sort of verified electronic delivery of documents, the best way is to send it in via fax, using a machine that can generate a transmission receipt.
Archaic? Yes. But it offers delivery that is both instant and proof of delivery that is universally accepted.
Don’t limit yourself to filling out whatever forms the company sends you for filing a claim. Feel free to include whatever else might be helpful to the claims adjuster.
The key is to answer every question the travel insurance company might have before it asks. That will speed up your resolution. For instance, on a medical-related claim, the insurance company will probably send you a bare-bones form, along with a medical records release. But if you happen to have some of the records that might be relevant to approving your claim, it’s helpful to send them along with the document before the adjuster can ask for them.
Make the process as easy as possible for the adjuster. If you are including a lot of different documents, a cover page guide with an list of what’s included can help. While you might be familiar with what happened on your trip, the adjuster isn’t.
Your travel insurance company will tell you how to file a claim. Claims typically take between two and four weeks to process, but some complicated claims that require more extensive research by an adjuster can take longer. Expect to receive a form acknowledgment of your claim, with a final decision within roughly a month, but no more than two months.
If you’ve waited longer than six weeks, contact your travel insurance company to find out about the status of your claim. You may need to refile. (It’s rare for paperwork to get lost, but it can happen.)
A good portion of the inquiries about travel insurance that I get involve the sometimes lengthy wait for a claim to be processed. There are two main reasons for a delay. First, a large natural disaster that triggers thousands of claims, and Second, a special circumstance that requires additional research on the part of the adjuster, or requires you to send additional information.
Many claims are denied because of a pre-existing medical condition. As I mentioned before, you should try to find a policy that covers pre-existing conditions. Also, make sure the policy covers your traveling companion, and be sure your companion’s family members are included in the definition of “family.” Some policies don’t.
A rejection isn’t the insurance company’s final word. It only means that based on the information it has in your claim, it isn’t going to honor it. A brief, polite, written appeal with any new information that you believe is relevant to your case is the first step in getting the company to reverse its decision.
Appeals are taken seriously by most insurance companies, and are typically reviewed by several adjusters at a more senior level. Their goal is to make sure nothing was overlooked by the first adjuster. This process can take as long as the initial claim, so stay patient. In my experience, however, appeals are answered faster than the first claim.
For most appeals, “no” is a final answer—and you’re left with another decision: Do you accept their decision or take your appeal to the next level?
✓ Often, a hard look at your claim by an independent third party will reveal that you don’t have a case. (I’m sometimes that person.) Maybe your claimed event isn’t covered, or maybe you don’t have the receipt to back your claim. Now is a good time to take another look at your claim and appeal, and decide whether it’s worth continuing with your appeal.
✓ Send a brief, polite, email to your insurance agent or travel agent, notifying whichever is appropriate of your rejection. Agents often can and do act as intermediaries when something goes wrong with a policy. Remember, they took a commission on your policy, and they have to be licensed to sell the policy, so they have some skin in the game.
✓ Contact your state insurance commissioner. Your insurance commissioner may be able to help if your claim was rejected without cause. To find your insurance commissioner, visit the National Association of Insurance Commissioners site. Some travelers have reported that their claims were honored simply by copying their state insurance commissioner on their appeal.
✓ Contact your Better Business Bureau. You’ll want to copy your agent and insurance company. The BBB is known to investigate claims of this nature, but it has little sway over the final outcome of your appeal.
✓ Take the agent or your insurance company to small claims court. You don’t need an attorney to go to small claims court, but there’s a limit on the claim amount. So, be sure to do some homework before filing a complaint. Typically, this is your last resort. If your agent or insurance company prevails in small claims court, you are usually out of options.
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