Finding the right travel insurance plan doesn't need to be hard but it will require some effort on your part. The first thing to do is answer a couple of basic questions to figure out your priorities and your tolerance for risk:
- Are you concerned about getting sick or having an accident while on the trip?
- Are you concerned about medical evacuation?
- Are you concerned about your trip investment should you have to cancel or interrupt it?
- Can you afford to lose your trip cost?
- Can you afford to buy a last minute return ticket home should your trip be interrupted?
- Are you concerned about losing your baggage and/or personal effects?
If you're concerns center around:
- Getting sick or having an accident while you're on the trip than you want to concentrate on the medical expense benefit found in "package" and "travel medical" plans. A couple of things to keep in mind as you look at that benefit;
- Are there any deductibles? Deductibles are the portion of a covered claim that you have to pay.
- Are pre-existing medical conditions excluded? All travel insurance plans exclude pre-existing medical conditions however, some plans will cover them under certain conditions.
- Is coverage secondary or primary? Most travel insurance is secondary coverage; meaning that you first must submit a claim to your own insurance company before the travel insurance company will consider it. With primary plans you just submit the claim directly to the travel insurance company. For many people, secondary plans are fine however, it's strongly recommended for travelers who are covered under Medicare that they purchase a primary plan. Even though Medicare doesn't cover outside the USA certain Medigap policies will but they have a life time benefit and it's better to save that benefit for the future.
- Than you want to concentrate your efforts on the "emergency evacuation" coverage found in "package", "travel medical", and "emergency evacuation" plans. All "package" and "travel medical" plans include coverage for emergency evacuations however, not all emergency evacuation plans include medical coverage. Some things to consider:
- Are pre-existing medical conditions excluded from coverage? Some plans exclude pre-existing medical conditions - look for a plan that doesn't.
- Hospital of choice - most medical evacuation plans will transport you to the closest hospital that can treat your condition. Hospital of choice allows you to choose however, it's not always that easy. In an emergency situation - and we are talking emergency situations - there isn't time to choose nor may it be in the best interest of the client to transport them to another facility before they are stabilized.
- Is the limit high enough for a worse case scenario? Emergency medical evacuations come in many shapes and sizes. Get a plan that will cover your for the worse case. Evacuations from Europe to the east coast of the USA can exceed $100,000.
- Than you want to concentrate your efforts on "trip cancellation" and "trip interruption" coverage. This type of coverage provides protection in the event that you have to cancel your trip due to a "covered reason". Trip cancellation provides protection for non-refundable travel arrangements made as part of the insured trip. Trip interruption is almost the same thing however, it deals with cancellations that occur after you've departed on the trip, hence the name - trip interruption. It will usually reimburse you for the non-refundable and unused land and sea arrangements lost at the time of interruption and up to the cost of a return economy airfare. Here are some things to think about:
- The first question is whether you can afford to lose your trip investment. To some people the loss of a $2,000 trip would be inconsequential to others it would be devastating!
- Are pre-existing conditions covered? Does the plan have a waiver? Having a claim declined due to a pre-existing medical condition is the single largest cause of complaints regarding travel insurance. It is best to find a plan that will waive pre-existing medical conditions.
- Is the family of your travel companion covered or does coverage extend to just the travel companion? All plans define "family" and provide, with varying degrees, coverage for cancellations or interruptions caused by an accident, illness, or death of a family member. But the definition of "family" varies by company. If you have a concern about a specific family member than make sure they are covered under the plans definition.
- Read the "covered reasons". They vary considerably from plan to plan. Remember only those reasons listed are ones that they will pay you for.
- Will the trip interruption limit cover your full loss if you had to interrupt your trip? The limit for trip interruption coverage is based on your trip cost and different plans vary from 100% to 150%. The reason why some plans provide 150% is because in some rare occasions a trip interruption can be more expensive than the original trip.
- If you're concerned about your personal effects and baggage that you have to concentrate your efforts on the "baggage" coverage. Usually baggage coverage is "all risk" meaning that you're covered for all risks of loss except for those that are specifically excluded or limited by the policy.
- Does the policy pay for actual cash value based on the actual cost or based on the replacement cost?
- Does the policy limit the loss of a single item? Most policies do and they are called inside limitations.
- Is the coverage secondary or primary? Secondary plans are the standard however, it means that you would first have to submit a claim to your own insurance company. This means in most cases you would have to submit the claim to your home owners or tennants insurance policy.
A final word about pre-existing medical conditions. There are some indications that historically over 25% of all medical, medical evacuation, and trip cancellation/interruption claims are due to pre-existing medical conditions. It's strongly recommended that you find a plan that will "waive" pre-existing medical conditions. Usually if a plan does waive pre-existing conditions they will require you to meet all three(3) of the following pre-conditions:
- you must buy the insurance within the required time period - ususally 2 weeks - from the date of your first trip payment. Your first trip payment date is the very first day you made a payment for any portion of your trip.
- you must be physically able to travel on the day you buy the insurance.
- you must insure your trip to it's full pre-paid value.
