How to Shop for Travel Insurance: What to Look For

Is travel insurance right for you? Can you afford the financial risk of losing your vacation investment if something goes wrong due to illness, weather, or other unforeseen circumstances? What if you have to cut your trip short because of an emergency, or if you become ill or are injured while traveling?

According to Jon Ansell, Founding President of US Travel Insurance Association (UStiA), it’s important to understand what travel coverage is provided by credit cards or insurance policies (health, homeowners, car rental). You may be surprised at how few circumstances are actually covered.

Travel insurance can end up saving you a lot of money. When deciding whether travel insurance is right for you, compare companies, policy coverage, benefits and prices. Also find out what is included as well as what is excluded.

UStiA Tips To Finding the Right Travel Insurance

1. What type of travel insurance do you need?

Do you need insurance for trip cancellation, interruption and delay?
Do you need medical insurance and medical evacuation coverage while traveling?
Will you need a 24-hour assistance line to help find doctors, contact your family or other assistance in case of emergency?

Ansell notes that more than 80% of travel insurance purchased by Americans is “per trip” policies that typically cover trip cancellation, interruption, travel delay, baggage delay; lost, stolen or damaged baggage, medical expenses and medical evacuation expenses. Annual plans are designed for frequent travelers and typically include medical and medical evacuation coverage. Travelers should note that many HMO medical policies today do not cover out-of-area travel or medical evacuation. Medicare almost never covers healthcare in a foreign country. If your medical insurance does cover you while you are traveling, examine travel insurance primarily for trip cancellation and interruption coverage.

2. Will you lose hotel and other deposits if you have to cancel unexpectedly?

Examine your hotel reservation, cruise line or tour operator cancellation policies. Some hotels will charge you for one or two nights’ accommodation even if you cancel as much as10 days in advance. Tour operators and cruise lines similarly have cancellation policies and penalties.

If you have to cancel because of emergency or illness, most travel insurance cancellation and interruption policies will reimburse lost deposits for covered reasons, such as your own illness, illness or death of a family member, a disaster that makes your home uninhabitable, the financial default of a travel supplier, or unforeseen weather conditions. However, fear of travel or mental or psychological condition is usually not covered.

3. Are pre-existing medical conditions covered?

Some policies may exclude pre-existing medical conditions, while others have a waiver that cover conditions that are relatively stable for a set period of time. Some policies have requirements related to buying the insurance within a set period related to your departure or initial trip deposit (usually 15 days).

4. Will you be covered for sports-related injuries?

Unless you’ve purchased a special sports rider, many travel insurance policies do not cover extreme or certain adventure sports such as hang gliding, bungee jumping, mountain climbing, sky diving, white water rafting, surfing or parachuting. Even policies that do cover hazardous sports often have exclusions. Check the policy, company website or speak to a representative.

5. Do you need extra baggage insurance?

If you lose your baggage, will you require more than your policy covers to replace the contents? If so, you may want to consider a travel insurance policy that has additional coverage. Airlines may not be liable for electronic, computer or photographic equipment, jewelry, cash, computer equipment or other similar valuable items. Similarly, find out what items may be excluded from your travel insurance coverage.

6. What is the waiting period for trip or baggage delay?

In case of a delayed flight or baggage delays find out the length of time you must wait before your insurance will cover you. Some policies may cover for specific trip delays if a flight is delayed by 6 or more hours; other companies may require a baggage delay of 24 hours. In all cases, the assistance portion of your travel insurance policy will help notify friends, family and business colleagues of your travel delay, as well as assist with other arrangements.

7. Are strikes, civil disturbances and terrorist acts covered?

If you’re traveling to a country where strikes or other disturbances could interrupt your plans, look for that kind of protection. Some policies will cover clearly-defined acts of terrorism, while others will not cover labor unrest or strikes. You may also need to purchase supplemental coverage for special circumstances.

8. What if your travel supplier goes out of business?

Some policies cover lost payments if your travel supplier goes out of business and you can’t get another flight. Look at the policy or the provider’s website for specific information on coverage for airlines, hotel or tour operators that file for bankruptcy or cease operation.

9. Are you buying from a reputable company?

Check with your local Better Business Bureau and find out if the company is a member of UStiA, which requires member companies to meet high industry standards and maintain high ethics in their business dealings. For a list of UStiA members, click here or call at 1-800-224-6164.

UStiA

The US Travel Insurance Association (UStiA) promotes fairness, integrity and a commitment to excellence in the travel insurance industry. Its mission is to educate the public on travel insurance while maintaining high industry standards. Founded in 2004, the UStiA is a non-profit association of insurance carriers and allied businesses involved in the development, administration and marketing of travel insurance and assistance. In 2004, UStiA member companies provided travel insurance policies to more than 17 million people.

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