Difference between revisions of "Travel insurance"
Revision as of 13:34, 16 August 2012
This article is a travel topic
For most people, travel insurance is short-term insurance available specifically against travel-related emergencies and expenses. International travelers will almost always want to obtain travel insurance because it covers medical expenses, but even other travelers may find it useful depending on their plans.
This article describes common items covered by travel insurance policies and what to check for on your policy. With any policy, it is important that you read the terms and conditions carefully and that you especially review the exclusions (things that the policy definitely does not cover).
This article is a general guide to travel insurance policies, including some possible terms but is not a substitute for careful review of the specific policy you may purchase. Travel insurance policies differ markedly in their terms and conditions.
How It Works
Basically, using insurance begins as you encounter any problem after you've purchased coverage and before or during a trip.. a problem that puts your plans at risk and/or that threatens considerable cost beyond what you would normally encounter. (This won't include coverage for essential steps on your trip that you failed to arrange for yourself, e.g., lodging, meals, fully adequate connection times between flights.)
Once you know the details of the problem (and any cost), you promptly contact the claims people for the company that issued your policy. You explain the situation, and they instruct you on what to do for a covered problem.
See "Making a claim" below for more discussion.
To wisely purchase coverage, carefully read the policy before buying to assure it provides coverage you need...per the discussions below.
To be able to use your policy and procedures effectively, print copies and take two or more in separate bags. In addition, take copies of the instructions on how to contact the insurer's claims section...at least in two separate bags.
Where to buy
You purchase travel insurance for international trips through an insurer in your country of residence, which means the country to which you'd want to be evacuated to or return to after a serious medical emergency and/or the country you'd need to travel to if a family member became very ill (these are assumed to be the same country).
If traveling within your country of residence, you can buy cheaper domestic travel insurance within that country, but you may decide that you do not need it at all if you are willing to risk losing costs associated with cancellations and so on.
You can obtain travel insurance through your travel agent, your normal insurers, or any one of a number of specialist travel insurers. Travel agents sometimes sell overpriced policies as you are something of a captive audience. Shop around. Because travel insurance policies are somewhat interchangeable, there are a number of websites where you can compare policy costs. This article does not list specific insurers as they are both numerous and country-specific where based.
Sometimes you may be insured via an existing deal. Some credit card companies insure any trip you take as long as you buy the tickets on a particular credit card. Business travelers may be covered by a company-wide insurance policy, but if you intend to take any side trips or have a personal holiday, check the coverage: usually personal holidays on the side must be of a fairly short length to be covered by a business policy. Be sure to check any "existing deal" carefully and ideally get confirmation in writing of your coverage. Credit card insurance deals, for example, often offer just basic coverage, and may be invalidated for travelers who paid travel deposits in cash rather than using the card.
If a member of a travel association or large professional group, you may find that it offers or endorses an insurance provider that provides extra coverage or better rates. Failing that, you may find coverage through on-line search. But take care that the company has a good reputation, e.g., from friends/family that have had to file claims, or local travel agents (mere on-line reviews/ratings may not be genuine).
Very regular travelers may find that "ongoing" or "periodic" travel coverage, typically purchased a year at a time, can be cheaper than insuring each trip individually. Most major travel insurers offer such policies. Large businesses often purchase such coverage for their key or frequent travelers.
When to buy
Some travel agents will offer travel insurance when you book travel, but you can purchase travel insurance between then and shortly before you depart. However, if you have a "pre-existing condition" you need covered, you need purchase it promptly, for some insurers within 2-3 days, others within 10-14 days of first booking (not final purchase of) the travel. Otherwise, between the booking and departure date or anytime during travel, if you are injured, become ill or have other reason disallowing or cutting short your travel, you're out of luck. Virtually all policies list the specific risks any covers. An insurer may offer different policies for different levels of coverage. Or particularly costly risks may be offered under extra-cost options. Carefully examine all to suit your needs. After noting the discussions throughout this article, consider the coverage tables below as typical examples.
As you buy, the number and age of travelers, plus the total known and estimated costs of the trip will primarily determine the cost of insurance, though other factors influence it. Do not understate any facts as you apply for/purchase a policy (e.g., , understate travelers' ages, only count the air travel you've booked); your claim for reimbursement for some "covered" cost may be denied.
What to buy
There are two major classes of travel insurance:
When buying travel insurance, you should review the dates of coverage (include the day you leave and the day you arrive home plus a day or two for delays), that it covers what you need, and the exclusions.
As you digest the kinds of coverage discussed below, you may discover that you only need one or a few types, e.g., "Medevac" (medical evacuation) from a trip location very far from home. With some research, you should be able to find separate coverage for each. If you need many types of coverage, you'll likely want an integrated policy that offers many kinds of "protection", some of which you may not need. But its cost is likely to be significantly better than separately buying all that you need.
Medical expenses coverage
Usually, whatever standard health insurance you have will pay only claims for medical care in your country of residence. Also, even if your medical care is usually paid for by your government, this usually won't extend to medical costs incurred in other countries. Some countries with universal healthcare (such as Canada, UK, Australia) might have reciprocal agreements with other countries with similar health care systems. However, even if a country extends its subsidized medical care to tourists, what's provided may not be up to your standards or needs.
Unless you are covered by a reciprocal arrangement or your regular health insurance covers international medical expenses, you may have to pay all medical expenses incurred while traveling out of pocket or through help from your insurer; in many cases, quality medical care can be very expensive. Therefore, all international travelers should be certain that they have medical coverage via a travel insurance policy that covers medical expenses they unexpectedly incur on their trip. Unless you'll not be far from home, you should also opt for medical evacuation coverage discussed below.
When considering a travel insurance policy's medical coverage:
Coverage for medical care does not automatically include medical evacuation.
You may have difficulty obtaining travel insurance if you have a high-risk, pre-existing condition such as heart disease, or have been diagnosed with contributing factors towards disease, e.g., clotting problems or high blood pressure. If asked, you may be required to disclose information about major, existing conditions in your medical history to your insurer, even if you are not seeking coverage for pre-existing conditions; your policy will usually be completely invalidated if you fail to disclose something pertinent when asked.
Some policies may cover you generally, but with pre-existing conditions excluded. This is obviously undesirable if your existing condition causes you significant problems or leaves you at risk. Some policies will cover pre-existing conditions if you buy coverage within a short time after booking your travel, perhaps 24–48 hours, others for up to two weeks. For many people, it's worth some research to find such policies. Failing that, if even possible to have your pre-existing condition covered, you may need to undergo a medical assessment and pay an extra premium for medical insurance or an extra-cost option in the travel policy.
Pregnancy is considered a pre-existing condition. See tips for women travellers for more information.
Refusal of medical coverage
Some pre-existing conditions will cause insurers to completely refuse all medical coverage, even for seemingly unrelated events. This will vary by insurer, but include conditions like terminal illness, being an organ donation recipient, having AIDS, and similar systemic risky conditions. Such people may not be able to travel secure of receiving affordable medical treatment for any condition at all.
When medical cover is refused, typically the other provisions of the policy still apply (e.g., claiming the replacement cost of stolen items).
Travel insurance becomes increasingly difficult to get after age 55, with your age alone being considered something of a pre-existing condition. The precise cutoff for receiving insurance without an addition premium and/or medical examinations varies from 55 to over 70 for some insurers. As you age, you will face increasingly higher premiums and perhaps excess charges or deductibles on claims, and your existing medical conditions may be partly or totally excluded.
Medical evacuation coverage
A medical evacuation is often a chartered trip (usually a flight) for a patient who is not well enough to return home by other means to better facilities or to their home country. Though the need is rare, its costs can be devastating to most peoples' savings. On-balance, the cost of coverage for it is not terribly great.
It typically involves traveling with medical personnel looking after you throughout return home, along with any needed equipment, medications, etc. Although some people have worldwide medical coverage as part of their everyday health insurance, it almost never comes with international medical evacuation. Even if you are willing to forgo all other types of international travel-related insurance, no one should ignore medical evacuation coverage.
There are multiple reasons a traveler would need medical evacuation. In simple cases, after local treatment, you may just require medical monitoring, perhaps on a commercial flight...possibly in first class (to provide necessary room) for you and the nurse or other. In moderate cases (after hospitalization), you may be just well enough to travel with medical assistance while lying down, but not well enough to use a commercial airliner...especially if you have or had a communicable disease. Some less-developed countries or the hinterlands of most countries may have no capabilities to treat serious injuries or illnesses. You might there need to be immediately evacuated to a distant location for treatment, to later be evacuated to/near home.
Some supplemental insurance such as AFLAC in the USA covers medical evacuation but only for about US$3,000. This is woefully inadequate for international travel. Domestic "medi-evac" is only intended to partly cover airlift to the nearest hospital (such as a helicopter serving an auto accident), not evacuation to your home country while abroad. Make sure your policy covers at least US$300,000 or equivalent, and seriously consider opting for US$1,000,000 coverage.
If you are incapacitated while traveling, some policies will pay for a relative or friend to travel to you and either stay with you or escort you home.
Lump sum payments
In addition to covering your medical expenses if you are ill or injured, some policies will pay a lump sum to you or your estate in the event of an accident or untoward event. For example, they may pay you a fraction of your salary for a certain time if you are injured while traveling and unable to work.
Travel insurance will often cover expenses related to unexpected cancellations by your carrier or destination providers, e.g., costs associated with a canceled flight, including accommodation, meals and other incidentals. Cancellations due to emergencies are often also covered, some possible examples include the following:
Depending on what's happened, the insurer might pay re-booking fees, refund lost deposits, or pay for travel home. Travel insurance pays only for direct losses such as these; you won't get additional compensation for things like your disappointment at your holiday being cancelled.
More expensive policies may also cover your own discretionary cancellations if there is an exceptional circumstance: for example, there are some travel insurance policies that will pay you the cost of your ski lift tickets if a resort has shut due to lack of snow.
There are always a raft of conditions about acceptable and unacceptable cancellations. Some examples of troublesome situations:
Take care with cancellation waivers offered by tour packagers or operators and travel packagers/consolidators who've arranged your travel. If you or they must cancel, such waivers typically cover only what you've paid them, and not other related commitments you've made. They also will have no value if the reason for cancellation is bankruptcy of the packager/operator.
Resuming your journey
If you have to cut your trip short for certain reasons (usually illness on your part or on the part of a relative) some will pay at least the cost of an additional return ticket so that you can resume your journey later. This may apply only before a certain time (they won't fly you back if you had only 48 h left of the holiday anyway!).
Loss, damage and theft
Some travel insurance policies cover the loss of or theft of your belongings while travelling. If claiming for theft, you must file a police report about the theft and get documentation, no matter how unlikely it is that the police will take any action. The insurance company will not pay your claim without a police report.
You may need to provide a list of items over a certain value and pay an extra premium to insure them.
In the cases of expensive and easily disposed of items like cameras and laptops, policies may cover only violent theft or forced entry, e.g., if if you leave your belongings in a room and they are stolen, coverage may be invalid if there was no forced entry. When considering claiming for damage, check the terms carefully: many expensive and fragile items are only covered if damaged while being carried by you. It is very common to exclude any damage done to your belongings if they travel as checked luggage: you must keep them on your person to be covered. Theft from unattended cars and other vehicles will have limited coverage, as will theft of, and particularly simple loss of, cash, money orders, travelers checks and credit cards.
Policies covering loss or theft of belongings are typically among more expensive policies, often aimed at business travelers.
An insurance policy may cover expenses incurred by your estate related to your own death while traveling, such as the cost of arranging a local funeral and burial or cremation, or the cost of transporting your remains home. Having medical expenses covered by insurance is also very valuable to your next of kin in the event of your death as otherwise that person may be liable and your children and dependents may have their inheritance greatly reduced or canceled.
There may additionally be a lump sum benefit to your next of kin, although seldom anything like the amount of money that a life insurance policy might pay.
The cost of policies often depends on your destination. If you are traveling within your country of residence you will often be able to get a cheap domestic policy (partly because it may exclude medical coverage). On the other hand, certain destinations, including South America and Africa, but also the United States, Canada, and Japan. Those countries have high healthcare costs, and so require more expensive policies. You may need to disclose your itinerary to the insurer, but some will simply allow you to nominate the continents you'll visit, or may provide a worldwide policy for a higher premium.
Many policies require that you purchase them in your country of residence and that you start and finish your trip there-—that is, you can't buy insurance halfway through your trip and it mustn't lapse before your planned return-—although there are sometimes exceptions.
Some insurers refuse to pay medical or any other expenses associated with particular activities. Aside from pre-existing medical conditions, common exclusions also include anything that happened to you as a result of an act of war; suicide, attempted suicide, self-harm, anything that you caused by doing something illegal anything you did while drunk or high, anything caused by a sexually transmitted disease (excepting ones you have covered as a pre-existing condition), any accidents you have while participating in an adventure sport not specifically listed as covered, anything caused by negligence on your part, any theft or damage to your belongings where they judge that you weren't looking after them sufficiently well.
Some policies may exclude all coverage in certain countries or regions within countries. This is usually due to danger or serious health issues. Check the fine print of your policy, e.g., in one section of the policy it may explicitly list a country as eligible for coverage, and then in another section exclude coverage in any country listed on certain government websites, such as the World Health Organization or Britain's Foreign and Commonwealth Office.
Some policies have an excess amount (also called a deductible), which is deducted from any claim you make, so that you will be paid the amount of the claim minus the policy's excess. In general, the lower the deductible, the higher the insurance premium. Travel insurance with a $5000 deductible can be as little as $10/month: that means that it will not cover minor expenses or even a mid-level problem like a broken wrist, but it will be a financial lifesaver if you have a serious accident.
Extending your trip
If there's any chance that your trip might extend beyond the period of your insurance, make sure that you know in advance how you can extend the policy and whether you can do this while traveling. It is generally much easier to extend a policy if you request the extension while you're still covered: obtaining a policy when you're traveling but aren't presently insured is difficult. In addition, if you let your policy lapse you will obviously not be covered for anything, including medical expenses, while you arrange a new policy. Many policies require that you apply for an extension at least 7 days before your policy expires.
When planning a trip, pay for your policy to cover a few days after your intended return. In the event of last-minute delays or changes of plan which extend your trip, you then have a few days to sort out any extension of the policy you need. Some policies will automatically extend if the delay is part of a problem that you could claim for: for example, if you have insured against delays and the delay extends your travel past the end of your coverage, the policy is automatically extended. This will typically not apply to pre-existing conditions or to high risk travelers such as the elderly, even if you fully disclosed pre-existing conditions when applying for cover.
Extensions to your policy are never guaranteed to happen. They will always be at the discretion of the insurer and may be refused based on your previous claims and any other information that you disclose when applying for the extension (and you will usually be required to disclose anything you think might be relevant lest the policy be void). Some insurers treat all applications for an extension as an entirely new application and will re-evaluate your circumstances before insuring you. Medical problems that occur during your holiday may count as pre-existing conditions when applying for an extension and certainly will if applying for a second policy.
Example tables of coverage
In concert with the above discussions, these tables reflect coverages under three kinds of multi-coverage policies currently offered by one reputable insurer. The first table reflects “top level” coverage items. You should see most/all (and perhaps others) immediately as you're offered a policy. You'll notice that the "Moderate Coverage" (Cvg) and "Deluxe Cvg" examples are better oriented to international travel.
As discussed above, look at the details thoroughly, especially if contemplating a trip to distant lands. Once you have done so, have taken your trip and were happy with the insurer, for a subsequent big trip you may only need to quickly consider their same policy and options before buying it.
What not to buy
Flight insurance, sold at some airports, is simply a very overpriced form of accidental death coverage policy valid only for the duration of your flight. Don't waste your money; even casino gambling and lotteries have better odds than this.
You should also hesitate to opt for cruise insurance. Temptingly modest in cost, many such policies cover few risks at very modest levels (rarely medical care or Medevac), only during your cruise and for activities/tours sold by the ship. In reality, you'll likely have many risks before, during and after your cruise that won't be covered, e.g., troubles before the trip starts, flying to/from embarkation-debarkation port(s).
Making a claim
Most insurers expect you to pay smaller medical expenses and all other expenses you intend to claim for yourself, and later apply for reimbursement. They will often pay large medical bills, such as those arising from hospitalization or evacuation, directly. If you are hospitalized, they should be informed as quickly as possible, since they need to agree that the treatment and associated costs are necessary. There is usually a clause stating that they will refuse to pay for medical assistance that they deem unnecessary. If you are incapacitated, your travel companions or contacts at home will need to deal with the insurer; make sure they have contact details. Many insurers have a 24-hour hotline that you can call. Often, this service is an advice hotline and the insurer may transfer you to their professional staff or those in your area to advise you about medical facilities and services available. If you or a travel companion can first inquire locally about medical capabilities, that can be useful information.
Do not arrange your own evacuation unless your life is in danger and you or your companion(s) cannot talk to the insurer first. As above, your insurer may have fully-effective, alternate means to arrange what you need and avoid costs. They won't pay (or pay fully) if evacuation is otherwise self-arranged. In case of unavoidable self-arranged evacuation, go no further than is necessary to obtain proper care, not (in most cases) all the way home.
For anything that is likely to result in a large claim, inform the insurer as soon as possible.
All claims should be filed promptly. Most insurers have a limited period of time after a given event for which you can claim associated expenses...usually no more than a year.
Claims will need to be documented. Where you are claiming expenses, you will need receipts. If you're claiming for a theft, you will need a copy of the police report made when you reported the theft to the police and evidence of the value of the item...possibly proof that you owned it in the first place (proof of the original purchase will cover both requirements).
Finally, don't file a claim for reimbursable or (to be) reimbursed costs, or avoidable costs.
Many insurers specifically exclude travel to countries and areas known to be extremely dangerous. As a rough guide, if the US State Department or your own country's government recommends against any travel to a particular country or area, you will find it difficult to get insurance coverage. As always, check the terms carefully, and if you are travelling to an unstable region, keep an eye on the travel warnings for any updates that might invalidate your insurance.
As above, make and carry copies of your policy and your insurer's contact details with you, and retain at least a second copy in your luggage. Also give policy/contact copies to traveling companions and relatives or friends at home willing to help if needed. If you are incapacitated, someone else will have to deal on your behalf with your insurance company. They must know with whom and how you are insured (if you are insured). If you are traveling to more remote areas (especially alone), give a copy (or at least basic information) to whichever local person is most responsible for hosting your visit, e.g., the resort manager or tour guide.