How can you be absolutely certain you’ve chosen the right travel insurance plan? Travelers buy travel insurance for lots of different reasons: perhaps you have elderly parents and want to be able to get back home quickly if necessary, perhaps you have a recurring medical condition and want to avoid high medical bills, perhaps you are worried about losing your job and having to cancel your trip.
Unfortunately, most of the bad reviews we hear are because the insured didn’t understand the policy coverage or they had expectations about what the coverage meant without really understanding it.
To be sure you have the right plan and understand the coverage, follow these steps:
1. Get and read the travel insurance plan certificate
It’s important that you avoid making assumptions about the coverage you get with the plan. For instance, many buyers read ‘trip cancellation’ is covered but they fail to review the covered reasons for trip cancellation and they feel frustrated if their claim is denied.
The only way to fully understand your coverage is to read the travel insurance policy certificate, which can be found on the travel insurance provider’s website before you purchase your plan, but will always be sent to you when you buy it. This is the actual legal document that defines your coverage – the agreement between you and the insurance provider.
Don’t worry, all travel insurance plans have a free look period that you can use to review the policy. If you decide it’s not the travel insurance plan for you: consider:
All travel insurance plans allow you to cancel your policy for a full refund (minus a small processing fee) if done within the free look period.
2. Read and understand the policy exclusions
The exclusions are separately defined in the insurance policy and list the situations in which coverage is not applicable (meaning your claim will be denied). Insurance companies have to list these in their policies to limit their own risk. If downhill skiing is specifically listed in the exclusions, any claim you make as a result of participating in downhill skiing will not be paid.
See what travel insurance does not cover for an good overview of common travel insurance exclusions and read your own policy for specifics.
3. Check the coverage limits
The coverage limits are the maximum amounts listed for any coverage, and you’ll want to review those to be sure you have adequate coverage. For example, if you want to be sure you have coverage for trip cancellation for a cruise that is costing you over $6,000, be sure the trip cancellation plan maximum covers up to that amount plus any other pre-paid nonrefundable trip costs. Some don’t and this often surprises buyers.
The key to coverage limits is just like with your automobile or home insurance policies – make sure that you have enough coverage for the item you are protecting. If it will cost $35,000 to replace your car, for example, don’t have an auto policy maximum of $20,000 or expect to eat the difference.
4. Look for optional riders for special circumstance
Many plans provide extra coverage for special circumstances like car rental collision coverage, the option to ‘cancel for work reasons’, and pre-existing condition waivers as optional add-ons. If the base travel insurance plan you want to purchase doesn’t have all the coverage you believe you’ll need, look for optional riders.
Don’t be shy about shopping around and comparing plans too. Sometimes a premium plan will automatically include the special circumstances coverage you need for a better price than adding options onto a less expensive basic travel insurance plan.