How To: Pick the Right Trip Insurance

Many airlines offer trip protection while you’re buying a ticket, but it can be tough to know exactly what's being covered. Plus, the last thing you want to do when picking the best plane seat is take the time to read the fine print of an insurance agreement.
Travelers concerned about an insurer’s reliability can consider a couple of places. TIAA has a member database, which includes large and small insurance companies as well as online aggregators that agree to uphold a code of ethics. InsureMyTrip also features over 30,000 reviews and ratings of travel insurance providers. And while most consumers probably don’t want to spend hours comparing travel insurance agreements, the company enables users to type in a few details about their trip in order to view a long list of options, including starred ratings, prices, and reviews. Keep in mind, however, that customer reviews are a mix of useful and unhelpful and that prices vary a lot. For example, a $2,000 week-long trip to Brazil yielded travel insurance quotes from $15 for medical coverage to more than $200 for a comprehensive plan.

According to InsureMyTrip, most travelers (75 percent) purchase a comprehensive plan. As the name suggests, it covers many problems that can arise during a trip, including cancellation, interruption, medical needs, evacuation, baggage loss or damage, and certain types of terrorism.
Travel agent Stephanie Goldberg Glazer has worked with Travel Insured International and likes their comprehensive plans. Note: The offerings can vary depending on the buyer's state of residence. Glazer says the prices for the comprehensive policies she’s purchased for clients range from five to 10 percent of the trip. That cost is influenced by the destination, length of trip, age of travelers, and perhaps even purpose for the getaway. For example, adventurers planning to go mountain climbing in the Andes may have to cough up more than vacationers hoping to bask in the sun on the Jersey Shore.
Based on a New York state residency, Travel Insured International’s Worldwide Trip Protector includes the expected (think accidents and sickness) as well as plenty of unexpected problems such as a possible $500 reimbursement for a missed connection or $10,000 for accidental death or dismemberment.

Policies that focus on specific elements of travel may get more potential compensation for a similar or lower premium than a comprehensive plan. For example, in Travel Insured International’s Travel Medical Protector plan, the accidental death and dismemberment compensation is twice as much as the comprehensive plan ($20,000) and offers up to $1 million for emergency evacuation.
Many Americans who have health insurance and are traveling domestically may have all the coverage they need. However, international travelers should call their insurance companies to check whether their medical coverage extends overseas, as any emergency room visit can be costly. And anyone who believes they may need to visit a doctor abroad should also check whether the insurer can help find them a doctor and which costs will be reimbursed.

Trip interruption coverage, which is one of the most commonly used types of travel insurance, kicks in when your flight is so delayed it requires a hotel stay, the cruise you booked is leaving before you can arrive at the port, or the hotel won’t refund the cost of a room you reserved. Of course there are plenty of other possible incidents that qualify as trip interruption and details for each vary. But even with these policies, some stipulations may cancel coverage. For example, if you book a cruise heading into an identified hurricane, you most likely won’t get travel insurance, explains Megan Freedman of USTIA.

Although terrorist attacks seem to appear more frequently in the headlines these days, they’re still relatively rare occurrences and travel insurance may or may not help. While only a few companies have travel insurance dedicated to terrorism, many comprehensive plans cover these acts. Keep in mind there are restrictions, too. Most companies differentiate between civil unrest and terrorism. And if you choose to buy travel insurance after an attack has occurred in a destination where you’re headed, any future incidents will likely be deemed "known perils" and can’t be claimed.
It's also important to understand what exactly is covered. For example, it may cover medical costs to an upper limit. Will the insurance company fly family members to be with you? Unlikely. Need to be evacuated to another country for an emergency operation by a specialist? Depending on the policy, you may or may not be reimbursed.
After 9/11, the U.S. government created the Terrorism Risk Insurance Program to limit the amounts that insurance companies would be required to pay in order to compensate for these acts. Talking with an insurance company rep is always the best way to know exactly what is covered under an insurance policy.

If you feel like you may not want to get on the airplane at all, consider getting the Cancel for Any Reason coverage (CFAR). These options may or may not be part of a comprehensive plan. If a terrorist attack or virus outbreak occurs in a place where you’re scheduled to travel, many insurance policies won’t reimburse your cancellation. However, CFAR allows for it. Keep in mind that even with these policies you’ll need to cancel 48 hours in advance and may only receive money for about 75 percent of your trip. These policies also often need to be purchased within 10 to 21 days of booking the trip. Be sure to understand the details of how to file a claim as well as all the parties that need to be notified about the cancellation.

Even the most dedicated travel insurance consumer might not read a policy from beginning to end to understand what is and isn’t covered. So which parts of a contract are must-reads? Lynne Peters, director of product at InsureMyTrip, recommends scanning the trip cancellation section for what is covered as well as the exclusions part for what isn’t. Freedman also suggests reviewing the perils portion to understand what will trigger coverage. She adds that travelers may have to disclose preexisting conditions in order to be adequately covered and it’s essential to read any mentions of them in a medical insurance policy. If it gets complicated, call the insurer for clarification.

Glazer says she’s filed several insurance claims for her clients with Trip Insured International. In one instance, a customer was diagnosed with a cancerous tumor and needed emergency surgery three days before he was supposed to leave on a trip. In another situation, a traveler broke her leg, needed emergency surgery, and couldn’t go on a two-week European cruise. "In both instances, they were reimbursed for 100 percent of their non-refundable expenses," said Glazer. However, the insurance company requires a lot of information to process the claim, including a credit card statement showing the charges from a cruise line or hotel, a doctor’s statement if it's medically related, a letter from your boss if it's work related, and the list goes on. A signed affidavit from the customer is also expected. Glazer says processing the claims takes about three to four weeks on average.
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