All insurance policies have “small print”. Even though it can be painful, it is vital to read and understand this part of your policy, because a misunderstanding can easily cause problems if you need to file a claim.
I asked Scott Perfetto from Travelsafe Insurance to name the most common “mistakes” and misunderstandings when travelers buy insurance. He responded with several, and if you want to avoid a problem later, it’s a good idea to read this now.
1. Buying a travel insurance policy after something happens: Travel insurance, like all insurance, is meant to cover sudden and unforeseen events. In order to be covered, you need to have purchased the insurance before the unforeseen events. Many travelers wait until something happens, then purchase a policy. Unfortunately, those claims are not covered.
2. You cancel your trip before you see a doctor, and expect to be covered: If you’re going to cancel due to medical reasons, you have to visit the doctor first, and your doctor must recommend you do not go. The same goes for interrupting a trip due to illness. Travel Insurance requires documentation (medical records) from your medical professional indicating the illness/reason that you are unable to travel. The medical records must indicate you visited the doctor before canceling your trip.
3. Using the wrong Policy Effective Dates when submitting a claim: Many travelers misunderstand the Departure and Return dates, use the wrong ones on their claims, and then have their claims denied. Departure and Return Dates are actually very simple. The Departure Date is the day you depart your home for your journey or trip. The Return Date is the day you return home from your journey/trip.
So, for example, if you plan on staying at a hotel close the airport the night before your plane departs, your departure date is the day you leave your house; not the day you take the plane.
There are also two effective dates associated with most travel policies:
- Trip Cancellation policies cover you from purchase* until you actually depart for your trip. (*It generally goes into effect the day after the payment is received or the date after the postmark on the application.) You need to purchase Trip Cancellation upfront, not when you’re ready to cancel your trip.
- All other coverage goes into effect on the Date of Departure.
4. Not fully understanding pre-existing condition exclusion waiver: Many travel insurance policies have an exclusion for “pre-existing conditions”; meaning any condition you had before your coverage began. Recently, companies have included a waiver for this exclusion if certain conditions are met. This usually includes the time of purchase, but it will also state a “look back” period. This is an amount of prior time that the insurance company will look to find a condition.
Depending on the look back period, a pre-existing condition with one company is not the same for another. Some look back 60 days, others look back 90 days or more. Not all travel insurance plans will waive for pre-existing conditions. It’s important to read the policy carefully to understand the “rules” for pre-existing conditions.
There are some policies that do not waive for pre-existing medical conditions under any circumstances. Make sure you ask whether your pre-existing condition exclusion waiver applies to only the policy holder, or to their immediate family as well. This is an important distinction. Travelers have fewer limitations when the policy lists only them, allowing them more flexibility. When policies also list immediate family members, the travelers are limited by the pre-existing conditions of the family, which adds loopholes and affects (limits) the benefits.
5. Mistaking an Administrator with the Insurance Company: Very often, the traveler believes they are purchasing a policy from an insurance company, when in most cases they are buying from a third party administrator. In most cases, the administrator markets, sells, and issues the policy. The insurance company underwrites the risk and is responsible for how claims are paid or denied.
6. Thinking “Cancel For Any Reason” and “Cancel At Any Time” mean the same thing: These are two optioned offered by several companies, and are different policies with their own rules.
With “Cancel For Any Reason,” you can cancel for divorce, illness of a pet, lay offs, work, etc. “Cancel At Any Time” will let you cancel whenever you like, but does have restrictions on the reasons you want to cancel.
Travel Insurance provides Trip Cancellation for “coverable” reasons which are clearly stated in your policy. “Cancel For Any Reason” is an optional insurance benefit.
Upon purchase of “Cancel For Any Reason” coverage, you can cancel your trip for any reason but you need to do this within a certain number of days, often 2 days. As long as you cancel your trip at least two days before departure, you will be covered.
Some travel insurance companies specify that you must cancel your trip at least 48 hours before departure (as opposed to “2 days”). While the two sound the same, this is an important distinction – so make sure you understand which will work best for you. It is easier to use two days as a measurement rather than counting hours/minutes from your purchase time.
7. Expecting Baggage Delay Benefits for your return home: Baggage Delay Benefits are not the same on your return home as they are on your outbound trip. This benefit allows travelers to buy the essentials they need until there luggage arrives to their destination. This might include essential toiletries or a swimming suit for the beach. If your bags are delayed on your return home, you do not receive a benefit.
8. Not saving receipts for Additional Purchases: If you are required to purchase additional hotels, meals, etc. due to flight delays or cancellations, keep the receipts. And make sure to find out from the airline why the flight is cancelled or delayed – weather, mechanical, etc.
9. Not reading your policy: A travel insurance policy does you no good if you don’t read and understand it. Most anger and resentment over denied claims could be prevented by reading the policy. Insurance companies are extremely specific…they don’t just make up a reason to deny a claim.
Make sure you read the details before you make the purchase. Know what you are buying, and shop around for the benefits that will help you.
TravelSafe Insurance, a division of the Chester Perfetto Agency, Inc. has become a gold standard in travel insurance products through innovation, experience and excellent customer service.
Since 1971, they have marketed and administered some of the most comprehensive policies available in the industry, and are leading the way in developing new solutions for the insurance needs of individuals and families throughout the United States and Canada. Whether you are traveling close to home or around the world, TravelSafe will provide the security and peace of mind you need to enjoy your trip.