“My insurance company denied the claim, because my policy does not cover war and conflict between countries,” said Meiri, a college professor from Tenants Harbor, Maine.
In other words, he was wrong about travel insurance.
“You have to read the fine print,” says Dan Richards, CEO of Global Rescue, a provider of medical, security and evacuation services. He says the policies may exclude a variety of activities, including mountaineering, skydiving, scuba diving, paragliding and backcountry skiing.
The pandemic and volatile geopolitical conditions have sparked interest in travel insurance coverage. But the choices can be overwhelming. For example, Berkshire Hathaway Travel Protection has eight plans, such as WaveCare cruise insurance and policies that cover road trips and luxury travel.
Reality check: Unless you have a specific concern or a crystal ball, it can be difficult to know if you have the right plan. “By design, travel insurance helps protect you from some unexpected events,” said Chris Carnicelli, CEO of Generali Global Assistance. That’s why you won’t know you have the wrong policy until something happens that isn’t covered, like a military invasion.
However, is it possible to know if you have the wrong travel insurance policy? Yes, and here are some clues.
If your travel insurance policy is not ‘cancelled for any reason’
Travelers often mistakenly believe that travel insurance covers everything. No. A “cancellation for any reason” insurance policy, which is usually more expensive, allows you to cancel your vacation and receive a partial refund. But most insurance only covers specific, named events, such as trip interruption or loss of luggage.
If your credit card travel insurance is limited
“Thinking that your credit card insurance is as strong as a stand-alone policy is a common mistake travelers make,” says Damian Tysdal, founder of CoverTrip.
Credit cards may offer basic coverage, including for trip interruption, evacuation and lost luggage, but coverage may be limited. Tysdal says some cards, like the Chase Sapphire Reserve, may offer additional coverage, but most don’t have enough.
Helen Prochilo, a travel consultant from Long Beach, NY, remembers one of her clients who wanted to rely on her credit card to cover a $14,000 Danube River cruise. Prochilo asked the traveler to read the fine print, which revealed that it would only cover $3,500 in damages if he had to cancel. His client ended up buying a stand-alone policy.
“Two weeks before they left, her husband got pneumonia, and they had to cancel,” she said. “He would have lost over $10,000 if he relied on credit card insurance.”
If travel insurance is a real bargain
“Cheapest isn’t always the best way to go,” says Laura Heidt, Brownell Travel’s insurance desk manager.
Policies can be expensive. A standard policy that covers named perils, such as flight delay or hospitalization, costs 7 to 9 percent of your prepaid, non-refundable cost. The cancel-for-any-reason policy, which allows you to cancel your trip and receive a refund of 50 to 75 percent, will set you back 10 to 12 percent.
Here’s an insider’s tip: The more complicated your trip, the more insurance you need. “If your vacation requires you to use multiple modes of transportation to reach your final destination, it’s wise to consider purchasing a policy that includes a cancellation-for-any-reason benefit,” said Beth Godlin, president of Aon Affinity Travel Practice.
If you are only concerned about policy maximums
Often, travelers focus on policy maximums – the amount the insurance will pay for a covered event – but ignore what’s not covered. Sometimes travelers ignore the exclusions, such as adventure sports. Sometimes they ignore effective dates, saying they are covered by days they don’t exist. I once had a reader who booked an extension for a cruise and filed a claim, but her policy had expired.
“Don’t look at the maximum policy and nothing else,” advises Narendra Khatri, principal of Insubuy, an online travel insurance marketplace. “Take your time, review the benefits and see what is actually covered in different situations.”
After that, you can weigh those amounts against what you can afford to pay out of pocket. A travel advisor can help you review your policy and make sure you are fully covered. If you buy directly through a travel insurance company, you will get information about your options but less personal advice.
If the cost of your trip just went up
Say you add a tour or rental to your trip after purchasing insurance. You may have the wrong policy now.
“The most common way people don’t have insurance is that they buy an insurance plan with a declared travel expense, and then they spend more on additional travel arrangements for their trip,” said said Dan Skilken, president of TripInsurance.com.
Fortunately, there is a fix. Many travel insurance companies will allow you to adjust your travel expenses after you purchase a policy. Skilken recommends contacting your travel insurance company and asking how to update the cost of your trip. This does not apply to policies purchased directly through the cruise line or tour company, which are generally non-refundable.
Most importantly, know what’s in your policy
“Always be sure to read your travel insurance policy,” says Tim Dodge, vice president of marketing at Arch RoamRight. “And ask.”
Skimming a travel insurance policy may be the biggest mistake travelers make when purchasing travel insurance.
“Yes, the documents are long and not exactly exciting reading, but grab a cup of coffee and dig in,” said Christina Tunnah, general manager of Americas marketing and brands at World Nomads. “It’s worth taking the time to read and understand your policy, so you know what to expect when the unexpected happens.”
Having second thoughts? You can get a refund on your travel insurance.
It is very easy to end up with the wrong travel insurance policy. I mean, who has time to read the all policy? Who remembers to check with their insurance company when they add another component to their vacation?
I’m with you. I just rented a car from Audi on Demand in Houston and thought my travel insurance policy would cover me. It doesn’t exist. I wouldn’t have known that — unless I was writing this column. Fortunately, my Visa Signature card done shut up the Audi, so there’s that.
If you find yourself with the wrong travel insurance policy, there is a way out. Many policies offer a “free look” period between 10 and 15 days after you purchase them. You can cancel the policy and receive a full refund when you are in your trial period.
