You’re more likely to make a claim against a travel insurance policy than you are your home or car insurance. Yet, most people don’t buy it.
There’s really no such thing as being too safe, these days. Back in October, the US Bureau of Consular Affairs expressed serious concern about the threat of violent attacks against U.S. citizens abroad — ISIS and al Qaeda, et al.
So here are some tips about when, and if, to buy insurance.
Never buy travel insurance from your airline, tour operator or cruise line. The policies are weak (for example, pre-existing medical conditions are usually not covered) compared to what you can get directly from a travel insurance specialist like AIG Travel Guard.
Can you afford the loss?
The No. 1 reason people make a travel insurance claim: illness or injury (of either the policy holder or a family member) just before starting a trip. Make sure that you document your medical condition with a visit to a hospital or doctor before making the claim, otherwise it will be most likely be denied. And read the fine print that defines “family member” — some policies are broader than others.
Many experts advise that you only insure a trip that’s of such high value that losing your investment would cause financial hardship (a $3,000 cruise, perhaps, but not a $150 flight to Chicago).
Covering the loopholes
A new travel insurance plan, from Warren Buffet’s Berkshire Hathaway, covers things that no other company does.
Called AirCare, it pays $1,000 for a tarmac delay over two hours or a lost bag, $500 for a checked bag delayed over 12 hours or a missed connection, and $50 for a flight delay over two hours. Payments are immediate and automatic, are cumulative if all of the above happens on your trip, and are in addition to whatever you collect from other sources.
“Cancel for any reason” travel insurance is also available, but it’s more expensive than regular insurance and claims must be made at least 48 hours before departure. But it does cover just about everything, including breaking up with your boyfriend and your pet becoming ill just before a trip (no, regular policies don’t cover those).
Your credit card might already cover you for trip cancelation caused by injury or illness. Chase credit cards are especially comprehensive, with coverage up to $10,000 coverage per trip, but, surprisingly, American Express cards (the “don’t leave home without it” people) are almost worthless. Call your card’s issuer to find out more.
Health and accident insurance
If you’re on Medicaid or basic Medicare, you won’t be covered for medical expenses outside the U.S., so consider travel insurance that includes emergency medical expenses.
If you have health insurance, call your provider before taking a trip outside the U.S. to make sure any emergency medical expenses are covered and what the claims procedure is (do you have to pay a hospital or doctor up front and file a claim upon your return, do you need pre-authorization?).
If you travel a lot, consider an annual health insurance plan that covers you when you’re overseas. Some plans offer “secondary” insurance (meaning that you must also have health insurance back home), but primary policies are also available (with lower coverage limits).
Medevac coverage
Perhaps the most important travel protection you can buy isn’t really “insurance” — for legal reasons, it’s called emergency medical evacuation coverage. If you break a leg hiking in the Swiss Alps or become seriously ill in the middle of the Amazon, companies such as MedjetAssist and AirMed will come rescue you and fly you back home to a hospital of your choice at no cost.
Emergency medical flights can cost $100,000 or more, so it’s the kind of mishap that most people can’t afford. Policies are sold by the trip and also on annual plans for those who travel often. Some travel insurance policies include medical evacuation.
Which policy to buy? Compare them at Insuremytrip.com and Squaremouth.com. Read the fine print, or call the insurer directly, to see what is and isn’t covered. Ask “what if” questions. There are many exclusions and no policy is so ironclad that it will cover any eventuality. The only way to protect yourself from any travel snafu? Stay home.