Finding the right plan

 

Travel Insurance Companies in the USA

Almost all travel insurance companies in the USA are really "plan administrators" rather than the underwriting company.  There is a major distinction between the two;

Underwriting Company: is the actual insurance company that underwrites the insurance policy - they are the ones that guarantee the benefits found in the policy.  By law, these companies have to be licensed and/or registered with your State Insurance Department.  As part of their licensing requirements they are required to maintain and to meet certain capital and surplus requirements and must retain part of the insurance premiums as reserves for future claims.  In addition they are also required to submit periodic financial reports to the State Insurance Departments.

Plan Administrators: these are companies that administer specific types of insurance on behalf of an underwriting company.  Usually these companies will administer all or most of the required business functions such as:

• product development;
• actuarial;
• marketing;
• sales;
• post sales administration;
• accounting;
• claims;
• complaint resolution.

These companies are the ones that are more widely known by the public because they are the ones that have contact with the selling agents and traveling public.  However, ultimately, it's the underwriting company that they are acting as an agent for, that is responsible for the quality of their service and the payment of claims.

Agents and Brokers: All travel insurance is sold through an agent or broker.  Most travel insurance is sold through travel agents, travel wholesalers, or cruise lines and some is sold through insurance agents.   Many (almost all) consumer advocates recommend that you purchase travel insurance from a third party rather than from a travel supplier.   Also they recommend that instead of buying the travel insurance from your travel agent that you should buy it from a travel comparison web site. The main reason for buying it from a third party this is that most travel insurance excludes the "default or bankruptcy" of the travel supplier that you purchased the insurance from and the reason why you should not buy it from a travel agent is that your choice will be limited to only the plans that the travel agent has available.  Usually that's only one or two plans out of the 40+ plans that are currently being marketed and it might not be the right one for you.

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