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Reading and understanding insurance policies, including travel insurance, isn’t much fun for most of us. But, as is true with any insurance policy, you need to ask about what matters most to you in order to find just the coverage you want and then decide whether or not you really need it.
Trip cancellation/trip interruption
This is the most important type of coverage for most travelers, and it can be just plain confusing. If you cancel a trip or have to cut it short, insurers promise reimbursement for your losses but only if you cancel or interrupt a trip for a one of a specified set of reasons, called “covered reasons,” which can include things like hurricanes or terrorist attacks.
Those covered reasons for cancellation also include your injury or illness and the injury or illness of next of kin. However, be aware that each insurer has its own definition for next of kin; for example, next of kin may — or may not — include live-in partners who are not spouses.
In addition, except under certain conditions, insurers don’t pay benefits if you cancel because a preexisting medical condition flared up. The expression preexisting condition refers to an ailment for which you were treated within a specified number of days before buying insurance. Sometimes insurers will waive these terms and cover a preexisting condition if you satisfy three requirements: you buy the insurance within a specified number of days after booking the trip, you insure for all nonrefundable trip costs or for all trip costs, and you are well enough to travel at the time of buying the insurance. The ins and outs of the terms surrounding preexisting conditions and waivers also usually apply to the family or traveling companions whose ailments could be a cause for canceling or interrupting a trip.
The bottom line is this: If insurance is for you, buy it when you purchase your trip or very soon after to preserve all its benefits. Besides, a timely purchase often is necessary to preserve coverage for a trip disrupted by terrorism or a supplier default.
War, terrorism
If war ruins your trip, you will not be able to file a claim to recover your losses. This is because insurers don’t include war on their list of covered reasons for canceling or going home early. A strike also would not be covered if there was some advance warning that the strike might occur. However, some policies cover acts of terrorism, and insurers have broadened that coverage in recent years. This does not mean you can recover your trip investment if you cancel merely because you fear a terrorist attack; there has to have been a terrorist incident that is relevant to your trip.
Before 9/11, terrorism coverage meant that the traveler could cancel if a terrorism event occurred at his destination outside the United States. Now most insurers also cover domestic terrorism.
Coverage is generally city specific, meaning you can cancel if the event occurred in a city on your itinerary and generally within 30 days before your planned arrival. Some insurers also cover for city of departure. On the other hand, be aware that some insurers won’t cover for destinations with State Department warnings in place before your insurance was purchased or where there have been other terrorist incidents in the months before the last 30 pre-travel days.
Supplier failure
Occasionally, tour companies, ship lines or airlines go out of business and leave customers holding the bag, either sitting at home with worthless travel documents or stranded at their destination in need of new tickets to get home. Travel insurers now offer some policies that include coverage for that kind of mishap. This does not necessarily mean you are covered regardless of which tour, cruise or other travel product you buy. Insurers have blacklists, meaning companies whose finances are considered so poor that providing insurance is too risky. Alternatively, at least one insurer, Access America, maintains a “whitelist,” meaning a list of specific suppliers whose defaults it will protect you against. One advantage of using a credit card to pay for a trip is that if you have not yet paid the bill for a trip and a travel supplier defaults, you can generally decline payment because you don’t have to pay for something you did not get (or will not get, in this case).
Supplier vs. third-party coverage
Cruise lines and tour operators also offer their own insurance plans developed with wholesale insurance specialists. These choices generally cost less than third-party offerings and have a single price for all ages, but they cover less. The big pitfall is that they do not provide default protection for their own business failures.
The insurance also may not cover the entire trip when it is a cruise: Most, but not all, cruise lines cover the air fare and pre- and post-sailing ground arrangements, but only if the cruise line made those arrangements. Most do not cover terrorism, but they may include a cancel-for-any-reason provision. This may mean you could cancel for a reason that would not be covered in a typical third-party policy (such as fear of terrorism) and get a partial or full credit against a future trip, but not cash.
Finally, some suppliers fund so-called “penalty waiver” programs which look like a kind of insurance although they are not. These programs allow you to cancel for any reason, but many penalty waiver programs stop coverage from 24 to 72 hours before departure, and they provide no coverage if something goes wrong during a trip. In other words, if you get sick the day before departure or have to return home early due to illness, there is no coverage. Some travelers buy both supplier and third-party coverages for the same trip to address all their needs.
Medical evacuation
A comprehensive trip policy can include medical evacuation along with coverage for emergency medical care, cancellation and trip interruption, supplier default and other risks. Evacuation for medical purposes can mean relocation to the nearest appropriate facility rather than to your hometown or the hospital of your choice. However, insurers would typically bring you home when you are able to travel on commercial transportation unless you had to be brought home sooner for medical reasons.
For medical evacuation, there are other alternatives. A number of private enterprises operate membership organizations; the annual membership fee provides assured evacuation in case of medical emergency, and these clubs typically bring members to hometown hospitals or to the hospital of their choice. A list of some of these companies is at the end of this article. Several insurers also offer annual options for medical evacuation protection, but as insurance not as membership programs. Most include medical care in their annual programs while the membership organizations do not. As with trip-specific insurance, when evacuation is required, the insurance companies generally take you to the nearest appropriate medical facility and then bring you home later unless you have to be returned earlier for medical reasons.
In sum
You can buy trip protection from your travel agent, your travel supplier or the insurance agencies themselves. However, if you need more clarity on how a particular program works in real life, get your information directly from the provider of your coverage.
If you are buying insurance, call the insurance agencies. If you are buying a penalty waiver, get your information from the supplier that is funding the offer. And, if you are joining a membership organization for medical evacuation purposes, then it follows you should contact that organization with your specific “what-if” questions. You cannot depend on a conversation with any other sources if there is a later dispute.
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The following is a list of U.S. and Canadian travel insurance sellers. The list is not meant to be exhaustive.
Name: Access America
Toll-free number: (800) 284-8300
Web address: www.accessamerica.com
Name: AIG Travel Guard
Toll-free number: (800) 826 1300
Web address: www.travelguard.com
Name: CSA Travel Protection
Toll-free number: (800) 348-9505
Web address: www.csatravelprotection.com
Name: GlobalCare Insurance Services Inc.
Toll-free number: (800) 821-2488
Web address: www.globalcare-lynnfield.com
Name: iTravelInsured, Inc.
Toll-free number: (866) 347-6673
E-mail: Service@itravelinsured.com
Web address: www.itravelinsured.com
Name: M.H. Ross Travel Insurance Services
Toll-free number: (800) 423-3632
Web address: www.tripinsurance.com
Name: RBC Insurance
Toll-free numbers: in the U.S., (866) 307-5757; in Canada, (800) 387-4357
Web addresses: in the U.S., www.rbctravelprotection.com; in Canada, www.rbcinsurance.com/travel
Name: Travelex Insurance Services, Inc.
Toll-free number: (800) 228-9792
Web address: www.travelexinsurance.com
Name: Travel Insured International
Toll-free number: (800) 243-3174
Web address: www.travelinsured.com
Name: TravelSafe Insurance
Toll-free number: (800) 523-8020
Web address: www.travelsafe.com
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The following is a list of firms that specialize in medical evacuation services for their members. The list is not meant to be exhaustive.
Name: AirMed International, LLC
Toll-free number: (800) 356-2161
Web address: www.airmed.com
Name: MedjetAssist
Toll-free number: (888) 256-5508
Web address: www.medjetassist.com/trip
Names: SkyMed International Inc.; SkyMed International Florida Inc,: SkyMed Virgin Islands Inc.
Toll-free number: (800) 475-9633
Web address: www.skymed.com
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