Pre-existing medical conditions - the biggest pitfall out there. Up to 25% of all travel insurance claims are due to pre-existing medical conditions. Over come this by finding a plan that waives pre-existing medical conditions.
Qualifying for pre-existing medical conditions waiver - biggest pitfall is not insuring the full, pre-paid value of your trip. Don't round your trip cost down! Rounding your trip cost down will, in most cases, disqualify you for the waiver.
Foreseeability and Pre-existing Conditions - travel insurance policies require all losses to be unforeseeable at the time that you purchased your policy. Just because you've qualified for the pre-existing conditions waiver doesn't mean that they will cover all losses caused by pre-existing conditions. If your loss could have been reasonably foreseen at the time you purchased your policy than it probably won't be covered.
Covered Reasons - Trip cancellation, trip interruption, and travel delay are "named peril" coverages. That means they only cover the specific reasons that the insurance company outlines in their policy. If it isn't listed than it's not covered. And all reasons are subject to the policy exclusions. The proper way to analyize these coverages is to:
- read the covered reasons, only those reasons are covered;
- read the exclusions to see if they modify the covered reason - exclusions trump covered reasons;
- read the benefits because that is what the insurance company is financially liable for.
Family Members - trip cancellation and interruption coverages limit coverage to illness, injury, or death of a "family member". Each company defines "family members" differently. Read the definition carefully. If you are traveling with a travel companion be careful as some plans include their relatives as part of your "family" and some limit coverage to only your companion. Might not sound like a big difference but if your companion cancels due to the death of one of their "family members" you won't be covered.
Pre-existing Medical Conditions and Family Members - unless you've qualified for the waiver of pre-existing medical conditions than most policies will exclude pre-existing medical conditions for all "Family Members" whether or not they are traveling. Now you may know the medical condition of all of your "Family Members" but do you know the medical condition of your traveling companion's "Family Member"? Under most travel insurance plans the pre-existing medical conditions of everyone are excluded from coverage unless the plan provides a waiver and you qualify. There are some exceptions to this so read your coverage carefully.
Secondary Coverage - not really a pitfall but it is something that you have to understand. Secondary coverage means that you have to first submit a claim to your permenant insurance policies before the travel insurance company will consider the claim. That means that if you have a medical claim than you have to submit it to your health insurance company first or if you have a baggage claim than you have to submit it to your home owners insurance company.
Protection Plans and Cancellation Waivers - plans that look like travel insurance but really aren't. Be very careful with these and avoid them at all costs. They are called by different names, Protection Plans, Cancellation Waiver, etc but what they have in common is that they are not insurance. Tell tail signs are
- vague discription of coverage,
- failure to identify the name of the underlying insurance company,
- an unwillingness to provide a copy of the policy or contract prior to the purchase,
- payment made by future travel credits,
- premium or plan cost much lower than legitimate plans.
- remember the old adage if it sounds to good to be true than it probably isn't.
