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Travel insurance

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Revision as of 17:24, 20 June 2007 by 24.80.96.129 (Talk)

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    This article is a travel topic

Travel insurance is short-term insurance available specifically against travel-related emergencies and expenses. International travellers will almost always want to obtain travel insurance because it covers medical expenses, other travellers may find it useful depending on their needs.

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).

Buy

You can often obtain travel insurance policies through your travel agent or your normal insurers. Because travel insurance policies are somewhat interchangeable, there are a number of websites where you can compare policy costs.

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 the credit card. Business travellers 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.

Medical expenses coverage

It is usually the case that whatever standard health insurance you have will only pay claims for medical care in your country of residence. Also, even if your medical care is usually paid for by the government, this usually won't extend to medical costs incurred in other countries. Some countries with socialized medicine (e.g. 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, it may not be up to the standards you are used to.

Unless you are covered by a reciprocal arrangement, or your regular health insurance covers international medical expenses, you will have to pay all medical expenses incurred while travelling out of pocket, and in some cases medical care might be prohibitively expensive. Therefore, all international travelers should be certain they have medical coverage via a travel insurance policy that covers medical expenses they occur on their trip.

When considering a travel insurance policy's medical coverage:

  • check the precise details of medical care that you will be able to claim. If your destination has a tiered health system, with, for example, public and private hospitals, are you able to use a private hospital?
  • does your insurer offer 24 hour contact with emergency advice? These hotlines allow an insurer to assess a situation and give some advice about medical care as quickly as possible. Your insurer may have local knowledge that you do not have.
  • if you take part in any adventure sports or activities like alpine skiing or scuba diving check your policy for medical coverage related to accidents that happen while you're doing that activity, and whether or not you need any formal training to be insured. If you can't find a general travel insurance policy to cover your activity of choice, you may be able to take out a second policy from an insurer specializing in that activity.
  • is there coverage for illnesses that become apparent after your return? If not, will your regular health arrangements cover these illnesses? Most travel policies will allow claims for up to one year from the date of travel. This is reasonable, as malaria (in very rare instances) could take up to a year to cause a fever. Of course, file the claim immediately if you have already been billed by the doctor or hospital.

You may have difficulty obtaining travel insurance if you have high-risk pre-existing conditions such as heart disease, or you may be able to get coverage, but with the pre-existing conditions excluded. Some policies will waive this if you sign up within a short time after booking and paying for your travel (often 24-48 hours, a few up to two weeks). Note that you must disclose any information about your medical history to your insurer when asked, even if you are not seeking coverage for pre-existing conditions; your policy will usually be invalidated if you fail to disclose something.

Medical evacuation coverage

Your policy should cover both medical expenses incurred on your trip and the cost of a medical evacuation to your country of residence. There are two reasons a traveler would need medical evacuation. In less severe cases you may be just barely well enough to travel with assistance lying down, but not well enough to fly on a commercial airliner. In more severe cases, a less-developed country might not have facilities to treat serious injuries and illnesses. In that case, you need to be evacuated to an area with better facilities as soon as possible and might also need to be evacuated home at a later time.

Even if your local insurer or government provides cover for medical expenses internationally, they are unlikely to cover the cost of an evacuation. The baseline level of acceptable coverage is about one million US dollars: medical evacuations can run into the hundreds of thousands of dollars. (The U.S. State Dept's web site says "well in excess of US$50,000" and Australia's Department of Foreign Affairs says "sometimes up to (AU)$300,000 (about US$230,000"). 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, and is only intended to cover an air lift in a helicopter to the nearest hospital, not a medical evacuation to your home country.

Always talk with your insurer before arranging medical evacuation, as they probably have a contract with a company that saves them money. They won't pay if evacuation is self-arranged.

Cancellation insurance

Travel insurance will often cover expenses related to unexpected cancellations by your carrier or destination; for example, costs associated with a canceled flight, including accommodation, meals and other incidentals.

More expensive policies may also cover your own cancellations, if there's 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. Other policies will cover cancellations, last minute flights and re-bookings if you are forced to travel home unexpectedly (such as because of a family emergency) and resume your trip later.

There are always a raft of conditions about acceptable and unacceptable cancellations. Some examples of troublesome situations:

  • you can purchase insurance covering a trip home because of the death of a family member ― but a trip home due to the death of a friend almost certainly won't be covered and even a de facto partner's death might not be;
  • family emergencies other than a death usually aren't covered; for example the insurance will not cover a trip home to be with a family member who has been hospitalized or diagnosed with cancer ― even if it's your own child;
  • many policies cover cancellations or delays due to terrorist activities, but the August 2006 terrorist threat in London demonstrated that few cover cancellations or delays due to the mere threat of terrorist activity; and
  • most policies will not cover a labor strike if you book travel after union members vote to approve a strike (which could be weeks or months ahead of the actual strike).

Some policies cover cancellations if a destination has recently become unsafe due to either a declaration of war or a recommendation by your government to cancel travel to a particular area; others do not cover this.

Loss, damage and theft

Some travel insurance policies cover the loss of or theft of your belongings while travelling. In the cases of expensive and easily disposed of items like cameras and laptops, they may cover violent theft or forced entry only. If if you leave your belongings in a room while you duck out, and they are stolen, the cover may be invalid if there was no forced entry. 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 usually not pay your claim without a police report.

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.

Death

An insurance policy may cover expenses incurred by your estate related to your own death while travelling, 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 valuble to your relatives and friends in the event of your death, as otherwise they may be liable for them.

Area of coverage

The cost of policies depends on your destination. If you are travelling within your country of residence you will often be able to get a cheap policy. Certain destinations, including South America and Africa but also the US (because the US has high healthcare costs) require more expensive policies. You may need to disclose your itinerary to the insurer, but some will simply allow you to nominate the continents (eg Europe, or North America) or may provide a worldwide policy for a higher premium.

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 travelling. 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 travelling 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 typically will not apply to pre-existing conditions or to high risk travellers such as the elderly, even if you fully disclosed pre-existing conditions when applying for cover. Medical problems might also preclude an extension, even if you had medical insurance and it wasn't a pre-existing condition.

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).

Stay safe

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 travelling to an unstable region, keep an eye on the travel warnings for any updates that might invalidate your insurance.

Contact

Carry copies of your insurance policy and your insurer's contact details with you, and retain a second copy in your luggage. You might also want to leave policy details with travelling companions or relatives or friends at home, since if you are incapacitated someone else will need to deal with your insurance company and may not know who you are insured by, or whether you are insured at all.

Providers

InsureMyTrip [1] Compare rates ala Progressive of travel insurance providers

United States Travel Insurance Association [2] The professional association

MedjetAssist [3] First Class Medical Evacuation Assistance Program

TravelInsuranceQuotes.ca [4] Compare quotes for Canadian travel insurance.

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