What Is Covered by Travel Insurance?
A trip can be the highlight of your year, but sometimes the best plans do not go as anticipated. A lost bag, a missed flight, a canceled tour or an unexpected illness can ruin a vacation.
Travel insurance can at least take some of the pain out by offering financial protection. Not all policies provide the same coverage, so it is important to select a policy carefully.
Trip Cancellation and Interruption
The most common travel insurance is for trip cancellation and interruption. Most policies, however, limit coverage to cancellation for illness for you or a family, an airline’s flight cancellation, the tour company’s cancellation or weather-related issues. Reading the policy and all of its exclusions is critical.
What may seem like an emergency to you, such as a work-related issue, may not be considered one by the insurer. Before a claim pays out, the insurer will make you document the reasons for cancellation, so save all paperwork and communications. There are policies that cover cancellation “for any reason,” but they can cost up to 50 percent more than a basic policy.
Even the “any reason” policies may not reimburse 100 percent of the travel costs, so read the fine print so you are not surprised if you only get back 75 or 80 percent of a prepaid deposit.
Medical Expenses
Before you hit the road, check with your regular health insurance provider to see what kind of coverage it offers for travelers. You should be covered within the United States, but abroad, you are unlikely to have any coverage.
Primary travel medical insurance essentially replaces your existing insurance, while secondary medical insurance covers payments not already covered by your regular insurance. Be cautious of clauses regarding pre-existing health conditions.
If you have been treated for a medical condition within a specified period of time — usually between three to six months — the insurer will not cover that same condition during your trip.
Medical Evacuation and Repatriation
If you plan to travel to a rural area or in a developing country with poor hospitals and inadequate medical care, look into medical evacuation insurance.
Standard trip cancellation policies do not include this coverage, and your personal health insurance is unlikely to cover it either.
Baggage
Airlines provide basic reimbursement for bags lost in transit, but there are dollar limits. Travel insurance can supplement the airline reimbursements and might also cover luggage lost or stolen once at your destination.
Many credit cards, especially premium or platinum ones, already reimburse for lost baggage, and some homeowner’s insurance may have a baggage provision as well.
Customized Policies
Traditional travel insurance does not cover most adventure travel trips. If you break a leg mountain climbing or hurt yourself bungee jumping, you are unlikely to be covered unless you purchased a customized policy that covers high-risk trips.
Ask the insurer what types of coverage are available. Some companies will even cover kennel fees for your pets if a natural disaster or illness delay your return trip, but you need to specifically add on special coverage.
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