Categories
Travel Tips

How to Buy Travel Insurance: A Travel Insurance Primer

August 17, 2015

Adapt­ed from www.travelinsurancereview.net

Trav­el insur­ance is, on the sur­face, a pret­ty sim­ple thing: go to a trav­el insur­ance web­site, plug in your details, review the quote and then pur­chase. Or talk to a trav­el agent and get them to cre­ate a pack­age for you. But like house insur­ance, life insur­ance, or car insur­ance, there’s a lot to con­sid­er when you real­ly get into it, and you may end up find­ing out the hard way that you real­ly should have done your home­work before buying.

To help you get the right trav­el insur­ance for your needs, we’ve put togeth­er this primer to help you bet­ter under­stand exact­ly what ‘trav­el insur­ance’ is, along with a few tips and things to look out for.

WHAT COVERAGE DO YOU NEED AS AN ADVENTURE TRAVELLER?

While the fol­low­ing is not an exhaus­tive list of all the cov­er­ages avail­able with trav­el insur­ance plans, it describes those that are most use­ful to adven­ture travelers.

  • Evac­u­a­tion and repa­tri­a­tion cov­er­age pro­vides the coör­di­na­tion and funds nec­es­sary to arrange for a med­ical­ly nec­es­sary evac­u­a­tion or to return your body home for bur­ial. (Review the details of evac­u­a­tion and repa­tri­a­tion coverage.)
  • Med­ical cov­er­age pro­vides advance pay­ments or reim­burse­ment for med­ical and den­tal care received on your trip – even in a for­eign coun­try. (Review the details of med­ical coverage.)
  • Finan­cial default cov­er­age pro­vides reim­burse­ment for your pre-paid non refund­able trip costs when a trav­el sup­pli­er ceas­es oper­a­tions. (Review the details of finan­cial default coverage.)
  • Trip can­cel­la­tion cov­er­age pro­vides reim­burse­ment of your pre-paid non refund­able trip costs when the trip has to be can­celled for a cov­ered rea­son. (Review the details of trip can­cel­la­tion coverage.)
  • Acci­den­tal Death and Dis­mem­ber­ment cov­er­age pro­vides a lump sum pay­ment to you or to your fam­i­ly if you are dis­abled or die on your adven­ture trip. (Review the details of AD&D coverage.)
  • Trav­el delay cov­er­age pro­vides a per-day amount for unex­pect­ed lodg­ing, meals and trans­porta­tion when your trav­el is delayed a cer­tain num­ber of hours for a cov­ered rea­son. (Review the details of trav­el delay coverage.)

WHO SHOULD BUY TRAVEL INSURANCE?

You should pur­chase adven­ture trav­el insur­ance if you are:

  • A trav­el­er on orga­nized adven­ture tours (such as, for instance, a Sacred Rides trip?)– in many cas­es, tour oper­a­tors will require proof of trav­el insur­ance at the start of the trip and they’ll expel you with­out it.
  • An indi­vid­ual and expe­ri­enced adven­ture trav­el­er – no mat­ter how expe­ri­enced you are at your pre­ferred activ­i­ty, acci­dents and ill­ness­es can hap­pen any­where and with­out trav­el insur­ance cov­er­age for adven­ture activ­i­ties, none of the cov­er­ages will be avail­able to you on your trip.
  • A new­bie on a learn­ing adven­ture – even if you’ve joined a trip so you can learn a new skill, it’s impor­tant to have the right cov­er­age for the activ­i­ty. With­out it, all your cov­er­age will be invalidated.

WHEN SHOULD YOU BUY YOUR TRAVEL INSURANCE?

Pur­chase your pol­i­cy just after mak­ing your first trip pay­ment. In some sit­u­a­tions, this tim­ing is impor­tant because of some ben­e­fits, such as:

• pre-exist­ing med­ical con­di­tion waivers,
• ‘can­cel for any rea­son’, and
• ‘can­cel for work reasons’

are only applic­a­ble if the pol­i­cy is pur­chased with­in a cer­tain num­ber of days (usu­al­ly 10–15) from mak­ing your ini­tial trip deposit. Plus, you’ll ben­e­fit from the longest peri­od of can­cel­la­tion cov­er­age.
Remem­ber that most trav­el insur­ance com­pa­nies offer a free look peri­od with a refund if you decide the plan is not what you need.

THE 2 MOST POPULAR TYPES OF TRAVEL INSURANCE

The two basic types of trav­el insur­ance are:

VACATION PLANS (PROVIDES THE MOST COVERAGE, INCLUDING TRIP CANCELLATION)

This type of plan pro­vides the most cov­er­age in a sin­gle pack­age, includ­ing can­cel­la­tions, med­ical emer­gen­cies, evac­u­a­tions, loss or delays, lug­gage, assis­tance, and more. Vaca­tion plans are very pop­u­lar with trav­el­ers because they pro­vide a sim­ple solu­tion to their needs. Vaca­tion plans include cov­er­age for:

  • Can­celled trips
  • Inter­rupt­ed trips
  • Med­ical emergencies
  • Emer­gency evacuation
  • Delayed bag­gage or trips
  • Lost bag­gage
  • 24⁄7 Assis­tance
  • and sev­er­al oth­er coverages

If you are look­ing for ‘trav­el insur­ance’ for your next vaca­tion, you need a vaca­tion plan.

TRAVEL MEDICAL PLANS (MEDICAL COVERAGE WHILE TRAVELING ABROAD)

Trav­el med­ical plans are for trav­el­ers leav­ing their home coun­try who are not con­cerned with can­cel­la­tion or oth­er fac­tors – they just want cov­er­age in case they get sick or hurt while abroad, and don’t want to be hit with a mas­sive hos­pi­tal bill.

This type of plan focus­es on med­ical emer­gen­cies, evac­u­a­tion, and some­times life insur­ance. A trav­el med­ical insur­ance plan is per­fect if you are trav­el­ing out­side your home coun­try and are not con­cerned with can­cel­la­tion, inter­rup­tion, delays, and baggage.

Trav­el med­ical plans focus on cov­er­age for:

• Med­ical expens­es
• Emer­gency evacuations

Some types of trav­el med­ical plans pro­vide ben­e­fits such as med­ical cov­er­age for pre- exist­ing con­di­tions, mul­ti-trip and renew­able pro­tec­tion, emer­gency med­ical evac­u­a­tion, and cov­er­age for long-term trav­el abroad.

Beyond the two basic types, there are spe­cial­ized plans to meet unique needs:

EVACUATION PLANS

Evac­u­a­tion plans focus on emer­gency evac­u­a­tions, and are often sold on an annu­al basis as a mem­ber­ship. With an evac­u­a­tion plan, the com­pa­ny arranges trans­port, and you won’t lose your sav­ings to a cost­ly emer­gency med­ical evacuation.

ACCIDENT PLANS

Acci­dent Plans pro­vide life insur­ance style cov­er­age for trav­el­ers It pays ben­e­fits if you should have a seri­ous injury that results in dis­mem­ber­ment or loss of life. Ben­e­fits paid by these acci­dent plans are in addi­tion to any ben­e­fits paid by sep­a­rate life insur­ance plans.

HOW TO SELECT A PLAN BASED ON YOUR NEEDS

Each trav­el insur­ance com­pa­ny has a vari­ety of plans to choose from. These plans will each have vary­ing cov­er­age, which makes some plans more afford­able and oth­er plans high­er priced. When you start com­par­ing plans, you will need some cri­te­ria to help you pri­or­i­tize and nar­row down your choic­es. Use a list of cov­er­ages that you think are the most impor­tant for your trip. You might also fac­tor in min­i­mum cov­er­age amounts on cer­tain cov­er­ages like med­ical expenses.

The fol­low­ing is not a com­plete list of cov­er­age, but sim­ply a pri­or­i­tized list of the most impor­tant cov­er­ages for their trip:

MOST POPULAR COVERAGE CRITERIA CANCELLATIONS

  • Emer­gency Med­ical (at least $50,000)
  • Med­ical Evac­u­a­tion (at least $100,000)
  • Pre-exist­ing Med­ical Conditions
  • Can­cel For Any Reason
  • Haz­ardous Sports
  • Hur­ri­canes & Weather
  • Ter­ror­ism
  • Employ­ment Layoffs
  • Missed Con­nec­tions
  • Rental Car Coverage

MEDICAL RELATED

  • Pri­ma­ry Medical
  • Emer­gency Medical
  • Pre-exist­ing Medical
  • Med­ical Deductible

EVACUATIONS

  • Med­ical Evacuation
  • Non-Med­ical Evacuation

LOSS OR DELAYS

  • Trav­el Delay
  • Bag­gage Delay
  • Bag­gage Loss
  • Missed Con­nec­tions
  • Trip Inter­rup­tion
  • Hur­ri­cane & Weather
  • Ter­ror­ism
  • Finan­cial Default
  • Employ­ment Layoff
  • Can­cel For Work Reasons
  • Can­cel For Any Reason

LIFE INSURANCE

  • Acci­den­tal Death
  • Air Flight Accident
  • Com­mon Carrier

SPORTS

Haz­ardous Sports (moun­tain bik­ing is def­i­nite­ly con­sid­ered a haz­ardous sport by insur­ance companies!)

OTHER BENEFITS

  • Rental Car
  • Mon­ey Back Guarantee
  • 24 Hour Assis­tance Ser­vice • Iden­ti­ty Theft
  • Renew­able Policy
  • All Events Upgrade

FIVE “LOOPHOLES” AND HOW TO AVOID THEM

An insur­ance pol­i­cy is a legal con­tract. The cov­er­age, exclu­sions, and ‘small print’ of the insur­ance plan are avail­able to read in some­thing called the Pol­i­cy Cer­tifi­cate. Many trav­el­ers buy insur­ance and assume ‘every­thing’ is cov­ered, but as with all insur­ance plans that’s not the case. Trav­el­ers get frus­trat­ed if a claim is delayed or denied, and assume that they have been cheat­ed because of a ‘loop­hole’. These frus­tra­tions could be avoid­ed by under­stand­ing the pol­i­cy, know­ing what is cov­ered, and what is not covered.

Here are the most com­mon ‘loop­holes’, and how to avoid them:

Not a Cov­ered Rea­son for Can­cel­la­tion: Read and under­stand the list of cov­ered rea­sons in the pol­i­cy, and if in doubt select the option­al “Can­cel for any rea­son” rid­er or a plan that includes that coverage.

Pre-Exist­ing Con­di­tions: Only buy a plan that offers a waiv­er to the pre-exist­ing con­di­tion exclu­sion, and make sure you meet the require­ments for it to apply.

Cov­er­age Exclu­sions: Read and under­stand the list if exclu­sions in the pol­i­cy certificate

Incom­plete Doc­u­men­ta­tion: Con­tact the insur­ance com­pa­ny as soon as you have any issue, and start sav­ing all receipts and documentation

Enrolling Too Late: Get your trav­el insur­ance as soon as you make a trip payment.

TOP 9 TRAVEL INSURANCE FAQS

Below are answers to some of the most com­mon­ly asked ques­tions about trav­el insurance.

DOESN’T MY CREDIT CARD HAVE TRAVEL INSURANCE?

No, not in the way most trav­el­ers want it to. Cred­it cards that have ‘trav­el insur­ance’ pro­vide lit­tle cov­er­age, but noth­ing in com­par­i­son to a sep­a­rate pol­i­cy from a trav­el insur­ance com­pa­ny. Some cards pro­vide can­cel­la­tion cov­er­age, but with an annu­al lim­it ($1,500-$2,500 per 12 month peri­od), and the list of cov­ered rea­sons is lim­it­ed. Inter­rup­tion cov­er­age is lim­it­ed as well, as is trav­el delay cov­er­age. Most impor­tant­ly though, is that almost no cred­it cards pro­vide med­ical expense or evac­u­a­tion coverage.

WON’T MY REGULAR HEALTH INSURANCE COVER ME ABROAD?

Not com­plete­ly. Most reg­u­lar health insur­ance plans pro­vide par­tial or no cov­er­age while you are trav­el­ing in anoth­er coun­try. For Medicare, there is nev­er cov­er­age abroad. Coun­tries with ‘uni­ver­sal health care’ might assist with minor needs, but they are under no oblig­a­tion to do so. In the event of major or ongo­ing med­ical expens­es, they would cease to help, and they would nev­er pay to evac­u­ate you or help you return home.

ARE HURRICANES COVERED?

Yes, many plans cov­er hur­ri­canes and weath­er under trip can­cel­la­tion cov­er­age. To be cov­ered you need to 1) make sure it is list­ed as a cov­ered rea­son, 2) buy before the storm is named, 3) insure for the full trip cost, and 4) some plans require that you buy soon after your trip pay­ment to avoid the wait­ing period.

ARE PRE-EXISTING CONDITIONS COVERED?

Yes, many plans offer a waiv­er that removes the pre-exist­ing con­di­tion exclu­sion. To be cov­ered you need to 1) buy your plan soon after your first trip pay­ment, 2) insure for the full trip cost, 3) be med­ical­ly cleared for trav­el at the time of purchase.

WHAT DOES TRAVEL INSURANCE COST?

Insur­ance typ­i­cal­ly costs 4–8% of the trip cost (pre-paid, non-refund­able expens­es). Basic plans can be very bud­get-mind­ed at less than 4%, and pre­mi­um vaca­tion plans can be over 12%. Trav­el med­ical insur­ance is sold on a trip=length basis, and can be as lit­tle as dol­lars per day.

WHEN SHOULD I PURCHASE MY PLAN?

With­in days of mak­ing your ini­tial trip deposit. There are many ben­e­fits to pur­chas­ing the plan soon­er, includ­ing max­i­miz­ing the peri­od of can­cel­la­tion cov­er­age, and being eli­gi­ble for pre-exist­ing con­di­tion cov­er­age and hur­ri­cane coverage.

HOW DO I KNOW I CAN TRUST THE COMPANY?

The com­pa­nies Sacred Rides rec­om­mends, and the ones fea­tured by insur­ance com­par­i­son web­site Squaremouth.com are com­pa­nies that have years of expe­ri­ence with sol­id AM Best rat­ings of finan­cial sta­bil­i­ty, and they com­ply with a Zero Com­plaint Policy.

WHAT IS THE REFUND POLICY?

A 100% refund of pre­mi­um with­in the Free Look Peri­od is guar­an­teed by almost all com­pa­nies. This allows trav­el­ers to review their pol­i­cy and return it for any rea­son with the time peri­od (less a small admin­is­tra­tion fee $5-$8)

HOW DO I BUY TRAVEL INSURANCE?

Trav­el insur­ance can be quot­ed and pur­chased instant­ly online using a cred­it card. Since trav­el insur­ance is a tem­po­rary insur­ance prod­uct, there is gen­er­al­ly no under­writ­ing peri­od or med­ical exam­i­na­tion required. You can get a quote online, buy with a cred­it card, print your email con­fir­ma­tion, and you’re all done.

WHERE SHOULD YOU BUY YOUR TRAVEL INSURANCE?

At Sacred Rides, we have part­nered with two rep­utable com­pa­nies to offer trav­el insur­ance to our Rid­ers (our clients):

Although we rec­om­mend bikeflights.com and worldnomads.com for pur­chas­ing insur­ance, there are a whole host of con­sid­er­a­tions when buy­ing insur­ance, and their plans may not be right for you. Square­mouth offers a great trav­el insur­ance com­par­i­son tool.