Understanding the Fine Print in a Travel Insurance Policy


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For most people, whether or not to purchase a travel insurance policy comes down to (1) cost and (2) understanding the fine print. 

Most people know whether a travel insurance policy is affordable to them or not, but understanding the details of an insurance policy is another matter. Reading the entire document is a good way to learn about coverage and exclusions and generally determine whether a policy is right for you. That being said, a standard travel insurance policy can include lots of legal language and be up to 30 pages long.  

If you aren’t sure where to start and are feeling overwhelmed by travel insurance documentation, this article will help you examine the different types of travel insurance and how to make sense of the coverage available.

Types of Travel Insurance

There are many types of travel insurance, but a select few represent basic coverage that people have come to expect. While some types of travel  insurance may be available “a la carte,” most travelers benefit from a comprehensive plan that includes multiple types of coverage.

Trip delay 

If your trip is delayed by a reason covered by your policy, you can be reimbursed for extra expenses that you incur due to the delay. For example, travel delay insurance can provide reimbursement for meals, hotel stays, and pre-paid, non-refundable deposits you made on shows or excursions that you can’t attend due to the delay.

Trip interruption

If your vacation is cut short due to an injury or other covered reason, trip interruption insurance can reimburse you for at risk pre-paid, non-refundable trip costs. You may also receive money back for hotel deposits on unused nights or a plane ticket to return home.

Trip cancellation

A standard trip cancellation policy will reimburse you for non-refundable, pre-paid trip costs if you need to cancel your trip for a covered reason. Covered reasons for cancellation may include: death, illness, injury, family emergency, severe weather, military deployment, or a loss of employment.

Emergency medical

Travel medical insurance can help you get care when you become sick or injured while traveling. It can provide financial reimbursement for doctor visits, X-rays, and prescription medication. Some plans offer medical evacuation services if you need transport to a hospital or other medical facility.

Baggage loss and delay

If your baggage is damaged, lost, or stolen during your travels, you can receive reimbursement for the value of your luggage and personal belongings up to the stated limit. A baggage delay policy can help you purchase necessities if your luggage does not arrive at the same time you reach your destination.

Adding Cancel For Any Reason (CFAR)

Cancel for any reason travel insurance (CFAR) can provide you partial compensation for pre-paid, non refundable trip costs regardless of the reason you cancel your trip. However, there are rules and limitations associated with this coverage.

  • You must cancel your trip at least two days before you depart
  • You must add CFAR shortly after your first vacation deposit (usually 14 days) for it to be valid
  • You won’t recover 100% of your pre-paid, non-refundable trip costs, rather about 75%

Adding Interruption For Any Reason (IFAR)

Interruption for any reason (IFAR) insurance compensates if you are already on vacation and it gets interrupted before the vacation is over for a reason not covered by the standard trip interruption coverage. 

Just like CFAR, IFAR has general conditions to look out for:

  • You can only file a claim once you have been on your trip for at least 48 to 72 hours.
  • IFAR must be purchased within 14-21 days after your first trip payment
  • IFAR does not reimburse you 100%. Typically, you can be reimbursed for 50-75% of your insured costs

Reading the fine print

When traveling, you will make a lot of booking decisions. Reading the fine print in your booking documents, from flights to hotel accommodation to rental cars, is vital to understanding your rights and remedies if you need to cancel or make modifications.

All travel insurance policies are different, and you are responsible for reading through the entire policy to know exactly what it covers. Reading the policy entirely helps you understand the coverage details and your maximum benefit limits. Of particular importance are exclusions and coverage limitations. Understanding what situations are not covered is as important as understanding what is covered. For example, if you are heli-skiing and need to be evacuated from a mountain top for a broken leg, that is not the time to learn that extreme sports rescues are excluded from your policy. Also, if you are expecting to receive $10,000 in compensation for your lost designer baggage and find out the coverage limit is $1,000, it is likely to lead to disappointment and frustration.

Navigating pre-existing medical conditions

Before traveling, take a look at your health insurance. Most domestic health insurance policies don’t cover you during international travel. You may need to buy a policy that includes travel medical insurance.

Especially if you have pre-existing medical conditions, knowing what coverage you have and what supplemental travel medical policies you might need to fill the gap is essential. Many plans exclude pre-existing conditions from coverage. In such a case it would be wise to consider buying a policy that includes a pre-existing condition exclusion waiver, though keep in mind that there are conditions to become eligible for the waiver. 

Many times, to qualify for the waiver, you must be medically fit to travel (your pre-existing condition must be stabilized), purchase medical coverage around the time of your first trip deposit, and the trip insurance must be based on the cost of your entire vacation.

Supplemental travel insurance

You can purchase a comprehensive travel insurance policy that will cover you in most situations. However, if you have a complex trip, are engaging in extreme sports or are traveling abroad, it is wise to consider purchasing additional travel insurance.

Supplemental travel insurance can make life more comfortable in emergencies. From hotel stays to 24/7 concierge services, custom options added to your existing policy can make a significant difference with a reasonable up-front cost.

Consult your credit card company

Many credit card companies offer very basic and limited travel protection and insurance benefits. However, it is essential to research what is covered for your specific card type.

Some insurance offered by credit cards limits the locations that are covered or how long you can travel. Others offer low levels of trip interruption and cancellation benefits for you and immediate family members traveling with you.

If you plan on renting a car, your credit card might provide coverage for reimbursement if the vehicle is damaged or stolen during your rental period. However, it may not cover third party liability, which could be costly if you need to pay for injuries or property damage.

How to handle claims

A claim will likely be denied if you request reimbursement for an item that is not covered by your policy or if you fail to provide the correct documentation. Like all insurance, a travel insurance company requires proof of damages or loss, for example, that your vacation was canceled, interrupted, or delayed. The more detailed the proof, the easier it is for your claim to get approved and reimbursement to be sent.

Filing a claim

Regardless of the travel insurance company, the process for filing a claim is generally the same.

  1. Fill out the travel insurance company’s claim forms. Claim forms should be available via the company’s website or mobile app. Be sure to include as many details as possible, including name, policy number, travel dates, reason for claim, and date of claim.
  2. Gather your documentation to support the claim. You may need physical retail receipts, doctor’s notes, flight delay notices, or police reports.
  3. Your travel insurance company reviews the claim information and decides to accept or deny the claim. Don’t be surprised if they ask for more documentation or clarification during this process.
  4. If your claim is accepted, you will receive reimbursement.

Getting denied

If your claim is denied, it is understandable to feel stressed. However, it is common for people to make simple mistakes when filing a claim, such as:

  • Not filling out the form correctly. Always check your spelling and policy numbers.
  • Not providing the correct documentation. Speak with your travel insurance company’s claims representatives if you need help with how to proceed.
  • Asking for reimbursement for an event that is not covered by your plan.
  • Not providing the travel insurance agency with current contact information so they can reach you if they have additional questions.

As with any purchase, the more you know about the product you are buying, the more satisfied you will be. This is true with travel insurance as well. The best way to make an informed decision is to compare policies online at TravelInsurance.com and find a policy that covers your specific travel needs.

 


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