An overview
Greetings, fellow travelers! I recently purchased a trip insurance policy for myself and researched all the available options on our site here at American Visitor Insurance. I thought I would share my results with you all to give some insight on these plans, their purpose and what to look for.
Firstly, you may ask: Why purchase a trip insurance policy? What is the difference between trip protection and travel health insurance? Well, a trip insurance policy allows you to insure a value which you paid for the trip. You purchase the policy in advance and then, should something happen to prevent you from going on your trip, you would get your money back that you would have lost since you were not able to go on your trip.
International travel health insurance primarily covers your unexpected medical expenses while you are traveling outside your home country. These plans can also provide some miscellaneous travel benefits, such as (1) baggage loss, (2) trip interruption, and so on, but primarily they will cover unexpected medical costs incurred. A trip plan, generally, will cover your medical expenses should you go on your trip, but they are designed more in mind of someone booking an expensive cruise or tour, for example, since the benefits are very appropriate for such a situation.
What benefits do I get from a trip insurance plan? Before I discuss individual policies, let me describe some benefits most plans have.
- Cancel For Any Reason -CFAR is an additional rider that can be included to get the maximum percentage of the cost of the trip covered. CFAR provides coverage for any reason that may not be mentioned as a reason for coverage. Reasons like changing dates of travel or cancelling it completely will not be covered by trip cancellation insurance. The CFAR cover should be purchased within the 10 days after the initial trip deposit is made. Choosing to buy “Cancel for any reason” (CFAR) cover travelers can recover up to 75 % of the expenses for a future trip.
- TRIP CANCELLATION — This is the primary reason to consider getting this insurance. This benefit allows you to choose an amount for your trip cost that you will insure with your policy. There are certain conditions which, should they arise, will allow you to get a refund of the amount you insured (up to the non-refundable cost of your trip).
Such reasons, generally are:(1) sickness, injury or death of a member of the party or immediate family members of the travelers, (2) felonious assault of a party member, (3) court ordered appearance or jury duty of a traveler, (4) military duty, (5) termination or layoff of employment, (6) common carrier delays due to inclement weather, mechanical breakdown or organized labor strikes that affect public transportation, (7) hijacking, (8) terrorist incident where you are planning to travel, (9) traffic accident, (10) bankruptcy or default of a tour operator, (11) quarantine of a party member, or (12) your residence made uninhabitable due to fire, flood or other natural disaster.
These reasons should be well documented and presented to your insurer as soon as possible in order to receive your benefit. These do vary slightly by company, so check your policy details to be sure you follow their procedures and you have your bases covered. Most policies pay back 100% or sometimes more of the cost you insured for your trip. The idea being that when you reschedule your trip it will cost you more next year (doesn’t everything?).
- TRIP INTERRUPTION — This benefit is similar to the above benefit, but kicks in after you started your trip. If, for similar above reasons, you have to interrupt your trip early, you will get a refund of some percentage of your money (the percentage of the trip left to take). This benefit is also usually given at more than 100%.
- TRIP DELAY — This is a set amount (around $1000) which will reimburse you an amount per day for any additional transportation, meals, accommodations, and non-refundable portion of your trip that you spend or lose due to a delay in your trip generally for 6 hours or longer.
- MISSED CONNECTION — A set amount (in thousands of dollars) which will reimburse you for additional transportation costs to join your cruise or tour if you miss your connection due to a delay of 3 hours or more. This benefit will also reimburse you for additional meals and accommodations as well as non-refundable losses from your trip payments.
- EMERGENCY MEDICAL EXPENSE — This is a set amount (thousands of dollars) which the company will pay for unexpected medical expenses you incur while on your trip. Note that some companies will include coverage for pre-existing medical conditions if you make your purchase within a short time of your initial down payment on your trip. This can be very important for planning your purchase for older people and those with medical conditions that you don’t wish to worry about while on your trip.
- EMERGENCY MEDICAL EVACUATION — This is a set amount (generally hundreds of thousands of dollars up to a million) which will move you to the nearest appropriate medical facility if medically necessary. If you are planning a remote cruise, you might want to consider getting a fair amount of coverage here just in case of such an emergency. Furthermore, if an adult is hospitalized, the policy will transport dependent children home (with a chaperone if needed) and/or you can have a person you choose come stay at your bedside while you are in the hospital if it turns into a lengthy stay (if you travel alone).
- REPATRIATION — If you should die while traveling, this benefit returns your mortal remains to your residence in the US or your place of burial.
- LOST BAGGAGE/PERSONAL EFFECTS — This benefit (generally hundreds of dollars) will reimburse you for loss, theft, and damage to baggage and personal effects. This may also reimburse you for delayed baggage if delayed for more than 12 hours.
- AD&D — Most policies offer an Accidental Death & Dismemberment (AD&D) benefit. That is, an amount is paid out to the insured for loss of limbs or sight or a beneficiary for accidental death of an insured while on your trip.
- COMMON CARRIER AD&D — This is a death/dismemberment benefit while on a commercial airline.
- TRAVEL ASSISTANCE SERVICES — Also called concierge services, many companies offer information over the phone for such things as locating a doctor, translation services, helping with lost or stolen documents, etc. These insurance companies are well versed in many countries and have many resources to draw from in order to assist their customers abroad.
Some additional riders these plans allow: Additional flight insurance, Car rental insurance, Cancel for any reason, Cancel for work reasons, Lost ski days/ equipment rental, Lost golf rounds/equipment rental. Rental car damage can be purchased to protect a rental car used during your trip. A popular addition to many policies is the "Cancel for any Reason" benefit.
This adds a significant amount to the cost of these policies, but allows the consumer more freedom to decide not to go on the trip. For example, a terrorist act in a nearby area, may make a traveler nervous, but if it is not directly in a city in which the tour is scheduled to go, it may not qualify for the trip cancellation benefit.
In our uncertain times, people like the added peace of mind they get from this benefit since they can cancel if they feel things are not as safe as they would like in the part of the world they wanted to travel. The "Cancel for work reasons" offers a limited addition to the cancellation reasons on the policy, such as merger, acquisition of company or other such work reason.
Now, let me get to my specific example. My family and I are going on an anniversary cruise to the Galapagos Islands. So, we are 7 travelers going together with 4 adults, and three kids. For us, it makes sense to get a single travel policy since if one of us gets sick, we will all cancel.
I will put the different companies in alphabetical order with the cost for our trip of 12 days with an insurance cover of $4,500 per person. We wanted to get at least $50,000 medical expenses covered AND I wanted to be sure that pre-existing conditions were covered as well, so I will list these benefits as I go.
