Five Essential Points To Review In A Travel Insurance Plan’s Fine Print – Forbes Advisor

No one wants to experience unpleasant surprises while traveling, and that extends to making claims on a travel insurance policy. After all, you buy coverage for peace of mind should unexpected problems crop up before or during your trip.

But if you’re unaware of how your travel insurance coverage works, you may be disappointed if you discover you’re not eligible to make a claim. That’s why it’s important to understand the scope of your travel insurance plan.

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Best Time Window for Examining Your Policy

Most travel insurance plans have a “free look” period that allows for a refund if you decide you don’t want to keep the plan. For instance, you can get your money back if after 14 or 30 days you decide to cancel your policy, as long as you haven’t left for your trip or filed a claim. Take advantage of this time to understand the restrictions, exclusions, waiting periods, coverage amounts and other caveats that dictate how your losses are reimbursed.

Here are the top five points to review in your travel insurance plan. If you need further explanation of your benefits, you can call your travel insurance company’s customer service hotline or your travel insurance agent.

Related: Best Travel Insurance Companies

1. Understanding Trip Cancellation Insurance

Many people purchase travel insurance for trip cancellation insurance, which can reimburse you for your prepaid, nonrefundable costs if you cancel for a reason covered by your policy. You may think you can cancel for any reason, but this is not the case with a standard travel insurance plan. Your travel insurance policy defines specific reasons that are accepted for trip cancellation claims. This is why you want to read the fine print of your policy.

“Look through the trip cancellation reasons and exclusions so you’re not caught off guard at the time of a claim,” says Christine Buggy, spokesperson for Travelex Insurance Services.

Generally, acceptable reasons for trip cancellation benefits include a death in the immediate family or a travel companion, illness or injury to you, a travel companion, or close family member, a serious family emergency, severe weather, unplanned jury duty, a sudden job loss, military deployment, a travel supplier going out of business, civil unrest, a national transportation strike and acts of terrorism.

While the lists of acceptable reasons to cancel have similarities among travel insurers, they also have differences. For instance, the definition of “family member” varies by insurance company and is often misunderstood, says Carol Mueller, spokesperson for Berkshire Hathaway Travel Protection (BHTP).

“Some U.S. travel insurance plans have a limited or traditional definition of family member, while others like BHTP’s include a more encompassing definition to also include domestic partner, caregiver, step-aunt or step-uncle and more,” she says.

Not all reasons are covered by standard trip cancellation benefits. If you want to cancel your trip because you break up with your partner and don’t want to travel together, you won’t be eligible to file a claim under trip cancellation insurance.

If you want the most flexibility regarding a trip cancellation insurance claim, think about upgrading your plan to include “cancel for any reason” coverage. This add-on increases travel insurance cost by an average of 50%. It allows you to make a trip cancellation claim for any reason as long as you cancel at least 48 hours before your scheduled departure.

If you meet all the requirements, you can generally recoup 50% or 75% of your non-refundable trip costs.

Also, be sure to add “cancel for any reason” coverage early on if you want it, as you typically must buy it within 14 days of your first trip deposit.

2. Travel Delay Insurance Waiting Periods

Travel delay insurance benefits can be a saving grace if your flight gets delayed or canceled. If you are stranded at the airport for a few hours or overnight, your associated expenses can be covered by your travel delay insurance benefits. You can also be reimbursed for nonrefundable activities and lodging costs you paid for in advance that you miss by arriving late to your destination.

Check the waiting periods for your travel delay coverage. This will be in your policy. There are generally three to 12 hours before any benefits kick in.

“Unfortunately, flight delays have become normal in today’s travel environment,” says Buggy. “Short delays of a few hours have minimal impact but longer delays can cause you to miss connecting flights and activities at your destination.”

When shopping for a policy, look for one with a short waiting time for travel delay benefits to kick in.

3. Covid-Related Travel Insurance

Covid-related coverage is included now in most travel insurance plans. But there are exceptions, so make sure to check this is if you want coverage for Covid:

• Call your travel insurance company to confirm that Covid is covered under your plan. If your plan does cover Covid, you should review coverage details with your travel insurance company because details may not be specifically listed in your policy. Some insurers have Covid coverage information on their websites.
• Keep in mind that even if your policy covers Covid, you must test positive for the virus to be eligible for certain benefits, and a home Covid test will not suffice. Make sure you know what you need to make a Covid-related travel insurance claim.

Find out if Covid is an acceptable reason to cancel under your trip cancellation insurance. Travel insurance will cover you if you can’t go on a trip because you test positive before departure, as long as your travel insurance plan includes Covid cancellation coverage.

Ask your travel insurance company to confirm that your travel medical insurance covers Covid. A travel insurance plan that includes Covid coverage can cover costs for doctor and hospital bills, medicine and lab work, up to the plan’s medical limits, if you contract the virus during your trip outside the country.

Travel delay insurance can cover the extra costs of lodging and meals during a quarantine if you contract the virus during your trip. You can typically recoup expenses for up to a week past your original return date if you test positive and you’re forced into quarantine beyond your original plans.

Related: Best Covid-19 Travel Insurance Plans

4. Understanding Pre-existing Medical Condition Coverage

Not all medical expenses incurred during a trip are covered by travel medical insurance. Travel medical insurance can include certain restrictions for pre-existing medical conditions. Your policy will have a “look-back period” to determine pre-existing conditions, says Chris Carnicelli, chief executive officer of Generali Global Assistance.

“Look-back periods are usually the 180 days prior to purchasing your plan, but it can be as short as 60 days depending on the plan you purchased and your state of residence,” says Carnicelli. “Any condition that falls before the look-back period isn’t considered ‘pre-existing’ by definition. There are other helpful details in this part of your plan, too.”

Typically, if you had any changes in your medical status during the look-back period, such as a new diagnosis or a new prescription for medicine, the condition would be considered “pre-existing.”

If you do have a pre-existing medical condition, Carnicelli says not to worry, there are options. “Certain plans can still provide coverage if you meet certain requirements,” says Carnicelli. If your condition is under control with medication, your dosage hasn’t changed and you’re medically stable and haven’t had any recent flare-ups, the condition will not be excluded as pre-existing under some travel insurance plans.

If that’s not the case, you can look for a plan that offers a pre-existing medical condition exclusion waiver, Carnicelli says.

Pre-existing medical condition exclusion waivers are often available if you buy your travel insurance plan within 15 days of making your first trip deposit and you insure your full trip cost.

Be sure to read the exclusions for medical travel insurance. For instance, if extreme sports and adventure activities are excluded, you would not be able to file a claim if you were injured on your trip while participating in those types of pursuits.

“The best course of action is to put your policy in place. From there you can make changes to your travel insurance if you need to alter travel dates or increase the amount of coverage needed,” says Buggy.

5. Travel Insurance Reimbursement Limits

Carnicelli at Generali says benefit limits should be one of the first things you look at when shopping for a policy and reviewing your coverage. “If they aren’t, they should be, because benefit limits determine how much money you can get back from a covered claim,” he explains.

Some benefit limits, like those for trip cancellation and trip interruption, are based on the cost of the trip you’re insuring. Others, like those for trip delay, baggage insurance and medical expenses have set limits.

For example, the AXA Assistance USA Platinum plan provides $250,000 in medical expense coverage per person. The plan’s lost baggage and personal effects coverage provides an overall limit of $3,000 per person for lost baggage and each item is subject to a maximum amount of $500, with a combined maximum of $1,000 for valuable items.

To see what your limits are for each coverage area, Carnicelli says to look at your plan’s Schedule of Benefits, which is included in your plan document and policy confirmation letter. When looking over your policy, you may decide you need more—or less—coverage.

It’s also important to know how you are reimbursed if you file a claim. This is especially true for baggage and personal effects coverage. If you file a baggage insurance claim, you may not get an amount that equals the cost to replace the items with brand new ones. Compensation could be the cost for repair or replacement of the item, taking into account its age and wear and tear.

“The current value may not be the same as the price you originally purchased the item for,” says Buggy with Travelex. “You can think of it like your car insurance. If you get into an accident and your car is totaled, you’re reimbursed for the current value of the car.”

Buggy also recommends that you review your policy to see if your coverage is primary or secondary. With primary coverage your travel insurance company pays claims first, eliminating the need to make a claim first on your home insurance or with the airline. With secondary coverage, you would first make claims with your home insurance company or common carrier, such as an airline.

Typically, travel insurance baggage claims are secondary, which means you can only file a claim with your travel insurance company if you aren’t able to recoup losses through other claims you can make.

Your travel insurance company is available to answer your questions if you need help deciphering policy language. And don’t forget about the review period. “If you’re not completely satisfied with your purchase within 15 days we’ll refund your policy cost, as long as you haven’t departed on your trip or filed a claim,” says Buggy at Travelex. “Take this time to comb through your policy, read the details and give us a call if you want to run through specific scenarios that you’re unsure about.”

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