Before a traveler purchases an insurance policy, an assessment needs to be done of what kind of coverage to have and how much to cover.
Consider the following:
Emergency Medical and Medical Evacuation Insurance. First of all, it is just downright irresponsible for travelers to not have emergency medical coverage and emergency medical evacuation insurance when traveling overseas. Remember, a domestic health insurance policy probably does not provide overseas coverage. If it does, it is probably at out-of-network rates. Medicare covers nothing overseas. Neither domestic health insurance policies nor Medicare covers emergency medical evacuation back home. This type of expense can easily be $100,000 or more. Never leave home without medical or emergency medical evacuation coverage. It is relatively inexpensive and insures against catastrophic loss. When a traveler purchases Trip Interruption/Cancellation Insurance (explained below), Emergency Medical and Medical Evacuation Insurance is usually included.
Trip Interruption/Cancellation Insurance can provide coverage against a wide variety of covered reasons. Every Trip Interruption/Cancellation policy is different. However, here are some typical covered reasons:
- The traveler, traveling companion, or family member suffers a serious covered injury or illness.
- The traveler, traveling companion, or family member dies.
- The traveler or traveling companion loses their job.
- The traveler or traveling companion is required to serve jury duty during the scheduled trip.
- The traveler is called for military service during scheduled trip.
- The traveler’s airline ceases services for at least 24 consecutive hours due
- The traveler needs to attend the birth of a family member’s child
- A terrorist event happens at your destination within 30 days of scheduled arrival.
- The traveler home or destination is uninhabitable because of a disaster (fire, flood, earthquake, burglary, etc.)
- You or a traveling companion legally separate or divorce
So, if you are in excellent health, have no relatives at home whose health you are concerned about, are not contemplating divorce, no one in your family is anticipating having a baby, you are certain you won't lose your job or have to serve on jury duty or be called for military service, you might consider skipping trip cancellation insurance. But if you anticipate having to cancel a trip, it may be worthwhile to purchase it.
Other common reimbursable events are:
- Trip Interruption. Reimburses travelers for the unused, non-refundable portion of a trip. It can pay for the increased transportation costs it takes for you to return home due to a covered reason.
- Baggage Loss/Damage and Delay. For instance, the airline loses traveler luggage. The insured may make a claim.
- Travel Delay. If a trip is delayed for more than a certain period of time, insurance may cover expenses like lodging and food. For example, the traveler arrives at the airport to find their flight has been rescheduled to the next day. The insurance policy may cover overnight lodging, meals and expenses to catch up with a touring program upon late arrival at their destination.
- Change Fee Coverage. For instance, if an airline tickets needs to be changed, this benefit may cover the cost of the change.
- Loyalty Program Reinstatement Fee. If an airline ticket, purchased with award points or miles, needs to be changed and a fee is charged, that fee may be reimbursed.
Again, not all travel insurance policies cover the events listed above. Some cover more, some cover less.
Corona Virus and Travel Insurance: In general, travel insurance policies will not cover cancellations due to pandemics like the Corona virus, especially if the traveler chooses to book a trip after a pandemic has been declared. Some travel insurance policies offer special COVID reimbursement for reasons such as:
- A traveler contracts COVID before a trip.
- An individual traveler is denied entry into a country because he/she tests positive for COVID at the border. However, if a country issues a blanket denial of entry to all travelers, this is usually not a covered reason for insurance reimbursement.
- Not all states make this available to travelers, but more states are coming on board.