Travel insurance is a relatively new insurance product and when travelers see advertising for travel insurance that says it covers trip cancellation and evacuation and baggage, they believe it will cover accidents of all kinds.
The truth is that travel insurance is just like any other insurance product – you gotta read the policy.
You already know the kinds of things you can’t do and expect your homeowner’s or automobile policy to pay up, and now it’s time to start understanding what travel insurance covers – and what it doesn’t. We’ll review some of the top travel scenarios that cause traveler confusion and explain how it works.
1. “I bought a travel insurance policy that covers trip cancellation, and I had to cancel my trip; now why won’t the travel insurance company reimburse me?”
The reason for your cancellation is the key here. You must understand the covered reasons for trip cancellation according to your policy. For example, one policy may reimburse your pre-paid trip costs if you have to cancel because you lost your job; but the policy may also stipulate that you have to have been employed at the same company for a defined number of years. Another policy may let you cancel due to an illness in the family, but you must be sure that the family member is covered. For example, if you are cancelling because your sister-in-law is ill and you have to help take care of the kids – does your travel insurance policy consider a sister-in-law a family member? See your description of coverage and look for the definition of ‘family member’ to find out. See our full review of trip cancellation coverage to understand how this travel insurance coverage works.
2. “I have travel medical coverage with my travel insurance policy, and I got ill while on vacation. Now, why won’t the travel insurance company says it was a pre-existing condition and they won’t reimburse my expenses. Why?”
A travel insurance company, just like a health insurance company, has to consider pre-existing conditions and pre-existing medical conditions are excluded by default from every travel insurance policy. A pre-existing condition is “any injury, illness, disease or other medical condition that occurs prior to the travel plan’s effective date and for which you had symptoms and sought diagnosis, medical treatment, and/or new prescription medications or a change in your current prescription.” If you have seen a doctor for any treatment during the look-back period (which is the 60 to 180 days prior to your travel insurance purchase), and you get sick on your trip, that illness must be completely unrelated to your previous doctor’s visit to be covered. See our full review of pre-existing medical condition coverage if you suspect that may be a factor on your trip and consider purchasing the pre-existing condition waiver.
3. “I got a little drunk at a party and fell off a chair and broke my ankle. Now, my travel insurance company is refusing to pay the medical bills. I don’t understand.”
In every travel insurance policy, there is a list of exclusions and in each of those lists, travel insurance companies limit their losses if you get drunk or take drugs. Check the list of exclusions in your policy and you will find text similar to the following: “We will not pay for any loss under the plan caused by or resulting from: being under the influence of drugs or intoxicants.” If it’s drugs that got you into trouble, you’re really out of luck because travel insurance also excludes any criminal acts that you commit and criminality is determined by the local laws, not the laws back home. See our full review of travel medical coverage to understand what is and isn’t covered when you’re on a trip.
4. “I was on vacation in Costa Rica and we had the opportunity to bungee jump. Unfortunately, I hit the bridge on the rebound and broke my collar bone and wrist. My travel insurance company is refusing to reimburse my medical bills. Why?”
When you’re on vacation, it’s understandable that you want to try all the activities you can. After all, when will you get the change to bungee jump again after you get home? Still, the reason you are being denied coverage is right in your policy, under the list of exclusions. Almost all travel insurance plans specifically refuse to cover activities like mountain climbing, rock-climbing, bungee jumping, sky diving, hang gliding, para gliding, and even para-sailing (a popular activity at all-inclusive resorts). Check your list of exclusions before you sign up for that once-in-a-lifetime activity and consider purchasing a travel insurance policy that covers adventure activities.
5. “We purchased travel insurance for our cruise, and a mechanical failure caused our connecting flight to be delayed two hours and we missed our cruise departure. Now, the travel insurance company is refusing to reimburse our costs. I thought travel insurance was supposed to cover these things!”
As with any coverage, it’s important to read the fine print. Missed connection coverage requires that the traveler allow enough time in their planned itinerary to reach the flight or cruise departure. If you have a tight connection time and are landing a short time before your cruise departure, the travel insurance company may claim that you didn’t allow enough time for travel. Also, missed connection coverage, just like travel delay coverage, often requires that you are delayed a minimum number of hours (usually at least three). In this case, it’s likely that the flight delay wasn’t enough to meet the minimum number of hours. That combined with your compressed travel times is enough for the travel insurance company to deny your claim. Read our full review of missed connection coverage to understand how this coverage works.
6. “I was on a business trip in Egypt when the civil uprisings grew violent and I wanted to leave. Unfortunately, my return flight wasn’t for another week but it appears they may close the local airport anyway. I just want to get out of here!”
In the event that an emergency situation occurs, and you are in imminent danger while traveling in a foreign country, the right coverage on your travel insurance policy will help you and any insured dependents be evacuated to a place of safety. Not all travel insurance policies have security or political evacuations in their coverage; in fact, most specifically exclude coverage for war, civil uprisings, military action, and other similar dangers. If you are traveling to a country where the political situation is tense, it’s important to review your policy and be sure that you have the coverage you need for the situations that could arise on your trip. See our review of security and political evacuation coverage and consider contacting your travel insurance assistance services hotline if you have questions about your safety on your trip.
7. “I was on vacation in Hawaii with my daughter when we discovered that our hotel room had been ransacked while we were on the beach. Our camera, money, cards, and smart phones were stolen. Now the travel insurance company is saying they don’t cover those things and I don’t understand.”
While baggage coverage from a travel insurance company, unlike the baggage protection you get with the airlines, covers your belongings even after you leave the airport, this coverage is like any other coverage in that it has limitations. In all travel insurance plans that include coverage for baggage and personal belongings is a list items that it will not cover. These items typically include jewelry, cameras, sports equipment, electronics, laptops, cash, and bank cards. If you read your travel insurance policy you’ll notice that there are items that are specifically excluded: money, credit cards, eye glasses, documents,, and more, and there are items that are subject to special limitations. These include jewelry, watches, electronic equipment, cameras, and more. Items that are subject to special limitations are covered only up to the limit defined in the policy and that limit is separate from the policy limit or the per-item limit. Read our full review of baggage coverage to better understand your travel insurance plan.