Protecting Your Trip Investment
“If I can’t afford to lose the money, I can’t afford the trip.”
That’s probably the only reason for declining travel insurance that I did not counter at the moment. My client considered each trip as a total loss, and if he was not comfortable with that possibility, he didn’t take the trip. When someone turns down travel protection or insurance that succinctly, I find it’s usually best not to press.
The rest of us, for whom a trip or cruise is a significant financial undertaking, are usually well-advised to protect that investment. Travel protection and insurance are not sexy; they are tedious and filled with insurance-ese. That is unfortunate, because it turns off some of the travelers who need protection the most.
Protection or Insurance?
There is a difference. If you click the box to add a few dollars to the price of your ticket in case of cancellation, that is travel protection. It covers cancellation and can provide a cash refund or (usually) future credit, depending on the terms. This protection is normally backed by the travel vendor and often called a waiver.
Travel insurance, on the other hand, is a highly regulated matter all the way to the state level. That’s why you declare your state of residence when you buy true travel insurance. Not only does it cover cancellation or delay of the trip due to specific reasons, it covers catching up to your trip or heading home in the middle of it, baggage loss/delay, medical and dental care, and emergency medical evacuation.
What to look for:
Trip Cancellation should be for 100 percent of the trip cost and covers non-refundable expenses you have made if you simply cannot take the trip for one of the covered reasons. The idea here is to have the covered reasons match anything that could happen to you before you leave.
The wider the coverage, the more expensive it will be. Most policies cover the death of you, a traveling companion or immediate family member. Who is considered a covered family member? What happens if a family member takes ill and you are the caretaker? What happens if your service animal is hospitalized before you head to the airport? What about your pet — does it count? If it’s important to you, we need to make sure it’s covered.
People are sometimes surprised that standard Trip Interruption/Delay is usually a higher value than cancellation. While cancellation covers 100 percent of your trip cost, interruption often sits at 150 percent.
Think of the costs involved if you’re in the middle of Europe on a river cruise and have to leave the ship and return home. At the very least, you have to find transportation from the ship to an airport and buy a last-minute flight. That runs up costs quickly. Or if you are in a fender bender on the way to the airport. You’re not injured, but the car has to be towed; you miss your flight and have to catch up to your itinerary with last-minute arrangements.
I see a lot of Baggage Delay or Loss complaints online; it’s inconvenient and expensive to have one’s luggage destroyed or wandering the world without you. Higher tiers of coverage grant shorter waits before they take effect. Twenty four hours might be the threshold on one policy, so if the airline gets it to you at the 23-hour mark, you will not be reimbursed for all those toiletries you thought you had to replace. Know your coverage before you need to use it.
Medical-Dental is a major consideration for most travelers. Employer-sponsored insurance plans don’t always cover treatments overseas, and Medicare hardly ever does. The scenarios are so narrow for Medicare coverage out of the United States and its territories, that leisure travelers almost never qualify.
We periodically see online horror stories about U.S. citizens effectively held hostage in a foreign hospital. It happens because hospitals can and often do require payment in advance or before you leave. Good travel insurance does two things — it has a network of international medical providers to make sure you get care, and it makes sure they get paid so you can leave.
Whether that insurance is a Primary or Secondary payor is of utmost importance. Secondary status is less expensive and means just that — don’t bother filing a claim until you have filed with your regular insurance and they have denied it. It seems pointless, and it is. Find a policy that is the primary payor for medical.
Emergency Medical evacuation is a non-issue to many travelers, those who will be in populated, first-world destinations. Have a serious accident on a remote safari, however, and the costs of getting out for treatment can reach six figures pretty easily. Expedition-type vendors require ample evacuation coverage. On a related note, repatriation covers the expense of returning your remains if the worst should happen.
Ok, so we know what’s covered, sort of …
Be sure to check the (usually long) list of Exclusions, especially if you have any adrenaline-inducing activities planned. Athletic competitions are often excluded, as are higher-risk activities like mountain climbing, bungee jumping, skydiving, etc. Plan to dive? Make sure you know your policy’s depth limits.
Pre-existing Conditions are at the center of many insurance disputes. If you file a medical claim, the insurer can look backwards from when the policy was purchased. Your policy says how far they can look back. If you were treated for the same condition, they can deny the claim unless you have a waiver of pre-existing conditions.
How to get that? Buy your policy promptly (14 days) to cover the money you’re putting down. That’s the easiest way. We work with IMG’s iTravel Insured series because of their outstanding coverage levels at multiple price points. Some insurers want you to insure the entire trip at the outset — money in their pockets covering expenses you have not even paid. IMG allows clients to insure the trip as it is booked/paid and receive coverage for pre-existing conditions.
Did you miss the 14-day mark? IMG’s iTravel LX is still there for you. Its most advantageous coverage, the LX plan waives pre-existing conditions up to final payment.
Finally, looking to change your mind? Cancel for Any Reason is the coverage of last resort. Insurers offer it so you can recoup roughly 75 percent of your non-refundable expenses if you cancel for a reason that’s not covered. Like changing your mind. It is expensive coverage, and there are always limitations, like how close to departure you can cancel.
Sometimes, you don’t know what you need with travel insurance until you need it. We found that out during the pandemic when travelers, agents and insurers all learned painful lessons. Arm yourself with the knowledge of what you might need and find the policy or provider that best fits. If you have questions, want to see what we offer from IMG or get a quote, email us or click below:
