Hurricanes, Earthquakes and Floods, Oh My
Strikes, Unrest and Bankruptcies, Oh No
Allergies, Illness and Accidents, Enough!
As hurricane season fires up in the Atlantic, it reminds us that the prudent among us invest in Travel Insurance to protect their hard earned vacation dollars. Unfortunately, we’ve all heard the frustrated stories of travelers who have purchased travel insurance only to find that their claim is denied for some obscure violation of the voluminous terms and conditions of the policy. Here are 6 important considerations that will save you significant money on your next insurance purchase and ensure that you have the coverage you need.
1) Buy Only The Coverage You Actually Need
You may be surprised at how much coverage you already have between your credit card benefits, home owners, car, and medical insurance. Call your insurance broker and get the details before purchasing a comprehensive travel insurance policy. Then purchase just the coverage that you actually need.
Many premium level credit cards provide baggage loss and delay coverage, accident insurance, medical assistance services and rental car coverage. You can save significant dollars by reviewing your credit card benefits prior to paying for a trip and choose the card that gives the most coverage to pay for your trip.
It’s likely that your home owners policy provides coverage for items you may loose while traveling – but be sure to check your deductable as it may be well above any loss you may encounter.
Your motor vehicle insurance policy may already cover you for rental car damages and loss – well worth checking on.
Most important of all is to check your medical insurance policy to see if it covers you for medical expenses while traveling out of the country. If you are on Medicare or Medicaid you are only protected within the United States (and possibly Canada and Mexico) unless you purchase a “medi-gap” policy. Other types of policies may provide full coverage when traveling.
It’s always a good practice to make a list of the items you wish to insure (airline tickets, hotel costs, tour costs, medical coverage etc) and then go about pricing only the items you actually need.
2) Purchase From an Insurance Company not an Insurance Provider.
There is a very big difference between these two types of insurance policies. Insurance Companies and their agents are licensed and regulated and their policy payouts are closely monitored. Insurance Providers are unregulated and are often owned by tour companies. Their coverage is “underwritten” by another company and they have earned a reputation for finding endless red tape excuses for not paying out claims. Further, if a tour company issues a policy and then claims bankruptcy it will renege on the policy as well as the tour. When in doubt, check with the Insurance Rating Website – AMBest.com
3) Cancellation coverage is the most expensive – do you really need it? Unless you are paying for a trip in full, and in advance, (like a cruise) you may not need as much coverage as you think. Can your airline tickets be refunded or changed for a reasonable fee? What is the advance cancellation time frame for your hotel room and rental car? You may find that much of your trip could be rebooked for reasonable sums. Purchase insurance only for the items that could not be rebooked at reasonable costs. On the other hand, having the ability to cancel a fully paid for trip if need be is very reassuring. ‘Cancel For Any Reason’ coverage is quite expensive, but sometimes the peace of mind is worth it. Be sure to ask how much of the trip price is covered by the ‘Cancel For Any Reason’ policy. Most people assume it’s the entire price – but they would be wrong. Typically these policies only refund 50 to 75% of the trip cost! Also make sure you know the advance notice deadlines – they are likely to vary from 2 weeks to 2 days prior to trip departure.
When purchasing cancellation ‘for medical reasons’ policies it is VITAL that you ask about a waiver of pre-existing conditions before purchasing your tour, and insurance policy. Typically policies with a pre-existing condition waiver must be purchased within two weeks of making your first payment on a trip or cruise. If pre-existing conditions are not waived you may find that your claim is denied because of medications you are taking or long ago diagnosed medical conditions. If you cannot have pre-existing conditions waived for yourself AND your family members, ask how long the company’s “look back” term is. In other words, if you make a claim, how many years or months do they look at your medical records?
4) What unforeseen events should you insure against?
The answer to this question will depend on the time of year you are traveling and the region you are traveling to. Is your trip planned for hurricane or typhoon season? Is the region susceptible to civil unrest or strikes? Insurance can protect you from many perils, but only when the events are “unforeseen”. Once a storm has been named or an event has been warned about, it is too late to purchase insurance against it. Hurricane coverage must be purchased 24 hours prior to a tropical storm being named. Read our article on the top tips for buying and using Hurricane Insurance. In most cases, there must be a U.S. State Department warning about a volatile area to activate cancellation options or an official declaration of an Act of Terrorism.
5) How to secure the most effective medical and evacuation insurance.
After you have reviewed your at-home coverage to determine how effectively you are already covered, you can decide whether or not to purchase out-of-country medical coverage. THE MOST IMPORTANT QUESTION TO ASK IS – is the policy a primary or secondary payer? Primary payer policies take care of all covered expenses, assist you with finding doctors and facilities, and you pay nothing out of pocket. A secondary payer policy requires you to pay for medical treatment and then submit bills (in English!) to the insurance company for reimbursement. This process can involve tedious paperwork and delays in generating payments. It is also important to determine the policy payment limits – some are as low as $1,000 – you may wish to secure considerably more.
If you have adequate “at-home” medical insurance that will cover you while traveling, you can put your mind at ease about finding an English speaking doctor (or other language) by joining IAMAT. This is a non-profit organization that can be joined for as little as $10. They will provide you with an extensive pocket-size directory of English speaking doctors (by specialty) in almost every country of the world, along with their contact information and commitment to a reasonable fee schedule.
Medical Evacuation – benefits for these policies provide transportation to the nearest ‘first world’ medical facility or to your home city whenever you are 150 miles or more from home. An important question to ask is, does the policy cover transportation for your traveling companion as well. If your partner became gravely ill, you would certainly want to terminate your trip and accompany them to the medical facility. Noted companies that provide stand-alone Medical Evacuation Insurance are Medex and Medjet Assist. Alternatively, a full year family medical evacuation policy can be purchased from Divers Alter Network – DAN for much less than $100.
6) New types of coverage, and how to find the best policies and prices.
As world events and lifestyles change, so do travel insurance options. You can now buy coverage for cancellation caused by unforeseen Business Reasons, Job Loss or Layoff and Political Unrest. You can also be covered for pet care expenses if your trip return is delayed (remember those volcano eruptions!), for ID theft, and financial default of any of the travel companies you are dealing with. Also inquire about new rental car coverage offered for specialty vehicles, drivers over 70 years of age, and rentals for more than 30 days.
The internet has made it much easier to compare travel insurance policies. Two websites stand out for their convenience and range of products: InsureMyTrip and Squaremouth. On these sites you can educate yourself about the different types of policies, check off the options you need and receive price quotes from a variety of companies at once. And of course, consulting with your personal insurance agent is also an excellent tactic for finding options that do not duplicate coverage you already have, which could save you considerable sums.