Jul 30 2008
Demystifying Travel Insurance, Part 1
I plan to take the confusion out of travel insurance over the next four weeks. Each Wednesday you can expect a different post on coverage areas. We’ll be looking at 28 in total.
These coverage areas become a shopping list of sorts. Most policies include basic coverage for a variety of things, some of which will be of primary importance to you, while others may not.
From there you can add options that result in a policy tailored to your specific needs.
Just make sure to read thoroughly and understand the coverage areas, options and limits available, and the specific terms, conditions and limitations.
Travel insurance policies and their provisions vary so much that at times it seems mind boggling. While doing this work takes quite a while the first time, it does get easier over time. Believe me.
TIP: Most policies come with a free period (often up to two weeks) during which you can review the terms and conditions and return it with little or no cancellation penalty.
If you ever think you may be making a claim on your policy, it is always best to review your policy again first, then contact your insurance carrier. You want to be sure that the claim will qualify for reimbursement.
Why Should You Consider Trip Insurance?
With the breakneck speed of today’s travel industry changes, and personal life issues, buying trip insurance is looking inevitable. It’s available from a variety of on-line sources, such as those listed above. In addition, agencies like InsureMyTrip and TravelInsured represent multiple carriers.
We receive many questions about travel insurance and I decided to take a more in depth look. Here’s what you need to start shopping around.
1. Travel Dates.
If you aren’t sure of the exact trip duration, try playing with dates in the quotation process. Buying a few extra days coverage at the trip’s beginning or end, may or may not affect the premium.
2. Plan Type.
Package trip insurance plans typically offer basic coverage and options including: trip cancellation, baggage, medical, dental, emergency evacuation, traveler assistance, baggage and travel delay, and accidental death coverage, collision/damage car rental coverage, sports coverage, airline flight insurance and emergency evacuation, among other things.
3. Total Trip Cost.
Total trip cost is the amount that you are insuring. Some policies require that you insure all trip costs, while others do not. If you aren’t sure of your exact trip cost, again try playing with that amount in the quotation process. Sometimes raising the trip cost amount or lowering it will result in a large difference in the insurance cost. Remember that the total policy cost may include non-refundable issuance fees you should be aware of.
TYPES OF COVERAGE:
1. Trip Cancellation/Interruption.
Some types of coverage apply only when that option is purchased and if the insurance was bought within a specific time frame (often fifteen days from your first trip payment). Typically these include: terrorism, financial default and pre-existing conditions. These can be very important aspects of coverage, so keep how each policy handles them is mind.
The following are typical reasons for trip cancellation/interruption:
A. Sickness, injury, or death of you or your traveling companion, or typically that of an immediate family member or business partner. You or your traveling companion’s injury or illness must usually be considered “disabling,” while that of an immediate Family Member or business partner must usually be considered “life-threatening” or require you or your traveling companion’s care. Check with the carrier to determine how they will determine if you meet these criteria.
B. Severe weather issues which cause delays, usually for at least 24 hours.
C. A strike which completely stops travel services at your departure or destination points. Strike coverage requires that there be no awareness of any strike possibility at the time of policy issuance.
D. Your residence or destination is uninhabitable due to fire, flood, natural disaster, vandalism, or burglary.
E. You or your traveling companion are subpoenaed, required to serve on a jury, hijacked, or quarantined.
F. You or your traveling companion are called into active military service or have leave revoked or are reassigned.
G. Cancel for any work reason. You or your traveling companion is required to work during the scheduled trip, and can provide adequate proof thereof.
H. Cancel for any reason. If you are prevented from taking the trip for any reason not otherwise covered by the insurance, you can be reimbursed for non-refundable payments you have made up to the specified limits. This option must usually be purchased for all prepaid trip arrangements (not selective ones) and within a stated time frame (again often fifteen days from your first trip payment).
2. Baggage damage/loss.
You can get reimbursed (up to your policy limits and sometimes less a deductible) for loss, theft, or damage to your baggage during your trip. This typically does not include: artificial limbs or teeth, any type of glasses or hearing aids, tickets, keys, money, credit cards or securities, or items shipped separately. Expensive items like jewelry, watches, and electronics may have limitations or exclusions. Normal wear and tear and animal-caused damage aren’t included. A police report may be required.
3. Travel Baggage Delay.
You can get reimbursed if your baggage is “verified” as delayed for more than 24 hours from the time you arrive at your destination.
4. Travel Delay.
You can get reimbursed up to your coverage limits if your trip is delayed for more than the policy’s specified number of hours. Receipts are required. Other limitations may apply including the number of payable delays per trip, and the causes of the delay.
Stay tuned for next week’s installment, which will include medical, dental, emergency evacuation, hospital of choice, adventure sports, ID theft and more.
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