Travel Insurance: When to Get, Skip

Not sure if you should get travel insurance?

Travel guru Q: Why do you need travel insurance? A: 1. Your flight has been canceled. Or you got sick right before taking a cruise.2. Your bags are lost and your medication is in them. You need to have an emergency prescription filled.3. Your passport and wallet are stolen, and you need emergency cash and a replacement passport.4. You're involved in an accident, and adequate medical treatment is not available.5. You need medical evacuation.6. Your cruise line, airline or tour operator goes bankrupt. You need to have your non-refundable expenses covered and to get to your destination.7. A terrorist incident occurs in the city where you're planning to visit, and you want to cancel your trip.8. A hurricane forces you to evacuate your resort, hotel or cruise ship.Q: And these scenarios happen to thousands of people every day. Tell me about some of them?A:-A couple on an Alaskan cruise got off the ship when it pulled into Juneau. As they walked near the ship, they approached a person in a moose costume. Thinking it was a cute animal character out to greet cruise ship passengers, they asked to have a photo taken with the moose and were held up at gunpoint instead. -Two friends were driving in a rental car through Hawaii. As they were enjoying the scenery, a huge wild pig suddenly ran in front of the car. The automobile was totaled. -And of course there is always the seasonal story of the honeymooning couple on a Caribbean island, stranded by a hurricane that destroyed their hotel. Q: So what kind of travel insurance do you need? What insurance should you avoid? How much does it cost? And just as important, where do you buy the insurance, and from whom? It makes a real difference.A: 1. First, there's flight insurance. It pays your beneficiary if the plane crashes and you are killed or injured. This is perhaps the most useless insurance you can buy. The premiums are very high, and besides, you are already probably covered by life insurance or other benefit plans. So avoid it.2. Trip cancellation and interruption insurance. This insurance becomes necessary depending on the amount you've invested in your trip. Buying a $59 ticket on southwest? Probably not. But a $4000 cruise. I'd recommend it. Depending on the policy, it covers you if your trip doesn't operate (the flight cancels, the cruise doesn't sail), or if you get sick before your departure, or during the trip. And some policies, for a higher premium, allow you to cancel for any reason.3. Medical evacuation and repatriation insurance. I highly recommend this policy for anyone who travels. It's an annual premium -- between $250 and about $400, and believe me, it's the one card you need to carry and hope you never have to use, but if you do, it's more than worth it. (i have one). What this insurance covers is if you get sick or injured, the insurance pays to get you stabilized (treated) and then flown out.But be careful: Not all policies are the same. Med Jet Assist, for example (and some others) is a great policy because it flies you out to the doctor and medical facility of your choice. This is a huge distinction with other med evac and repatriation policies, which may fly you to the doctor and medical facility of their choice, which means you're going to the lowest bidder. Not a good thing!Q: What are the two primary reasons to purchase travel insurance?A: Protecting your upfront financial investment with trip cancellation coverage, and protection for medical emergencies, lost baggage, travel delays and other "what ifs" that can occur while traveling. Q: What are plans available?A: -Travel insurance companies, like Access America, will offer 24-hour global assistance for issues like lost bags, securing last-minute hotels if your plane is delayed/canceled, finding a local doctor, arranging an evacuation, dealing with lost documentation.-"Comprehensive insurance" packages will generally include trip cancellation, as well as emergency medical and dental, emergency medical transportation, and travel delay coverage.-Limited plans, like airline ticket protectors, usually only cost about 4 percent of the trip. More comprehensive coverage ranges 4 percent to 10 percent of trip cost, which varies depending on the benefits, coverage levels, trip cost and traveler's age. -Travel insurance plans may also cover scenarios such as job loss, jury duty, carrier caused delays and work related reasons. Q: What are some things you need to be careful of? A: Read the fine print: Many policies do not cover "adventure travel," such as mountain climbing, bungee jumping and even snowboarding. An extra or alternative policy may be required. -It's hurricane season, so consumers must purchase travel insurance before a hurricane is named by the national hurricane center. If your destination is hit by a hurricane when you get there, but the airport or resort is still operating, you may not be covered-even though your vacation is ruined. -Many policies will not provide coverage for pre-existing medical conditions, unless the policy is purchased within 10 to 15 days after you book your travel. -Other common exclusions include losses caused by acts of war, self-inflicted wounds and unlawful acts (including drunk driving). -Car rental insurance is not really insurance, it's a waiver that releases you of liability should there be damage to a car. Know the difference between collision damage waiver and liability damage waiver, and check with your credit card or existing travel insurance policy to see what is covered. Q: What is the difference between medical insurance and medical evacuation coverage? A: Health insurance often does not apply when traveling abroad or in international waters. If you are seriously ill or injured, you may need to be evacuated to a medical facility that can provide the appropriate treatment. That can cost tens of thousands of dollars, which comes out of your pocket, unless you have travel insurance. -This can especially be important if you are older, traveling on a cruise ship, or to any destination that does not have excellent medical capabilities. -Traditional insurance guarantee payment to the transport providers and coordinates everything with your attending physician and its team of doctors and nurses. -Medical evacuation companies like Medjet Assistance will not just evacuate you to the nearest facility, but will take you to the hospital of your choice -- even if that means repatriating you to your home hospital. -Other companies like Medex and Oncall international offer similar protection, but read the fine print. Medex Safetrip ($56, based on one-week trip to Argentina) takes you from point of injury or hospital and evacuates you to the "nearest appropriate hospital" and the evacuation criteria is at the company's discretion. Medex Take Me Home ($178, same criteria) evacuates you from the initial treatment facility to the hospital of your choice closest to home or the nearest appropriate hospital, at the company's discretion. Oncall ($135, same criteria) takes you from the initial treatment facility to the hospital of your choice nearest home or the nearest appropriate hospital at the member's discretion. Medjet Assist ($215, same criteria) takes you from the hospital and accessible airstrip to the hospital of your choice at the member's discretion. Q: Can you give me a few examples?? A:Medical evacuation can really be useful for people with medical conditions or adventure travelers: in one case, a man on a dog sled expedition across the arctic got stuck in a crevice. He contacted Medjet from a satellite phone -- a companion got him to a station in Eureka, Wash., the northernmost outpost, where a Medjet Canadian affiliate got him and airlifted him out. In another, even more dramatic situation, two men from Nashville and a videographer from Canada were sheep hunting on a mountain in Kyrgyzstan. A snowstorm caught them, and the government sent a helicopter to rescue them. However, the helicopter was overloaded, and, sensing that something was about to go wrong, the three men jumped out of the helicopter while it was still 40 feet in the air just moments before it crashed. The videographer got to a mountain station and called Medjet. An avalanche was blocking the way, and it took Medjet three days to reach them, after hiring 50 to 60 locals to shovel the runway, reached the three guys (who were in stable condition) and flew them for medical care. Now that's customer service. Q: Now what are the actual prices on some of these things? A:Annual membership for Medjet is $250, or $385 for a family. However you can also purchase short-term membership from $95 a person. However, that $250 is a small price to pay for a full year membership knowing that if there's an emergency, you could incur tens of thousands of dollars in costs. For a thirty something traveling to Argentina for a week, at the cost of about $1,500 per person, potential insurance plans (from insuremytrip.com) O Access America classic, $144. Covers $1,500 for trip cancellation; $2,500 for trip interruption; $150 a day for delays of 6 hours or more, max $500; $300 max for bags delayed more than 24 hours; $25,000 medical; $500 dental; $500,000 emergency medical evacuation; O csa travel protection, $124.10. Covers $1,500 trip cancellation; $2,250 trip interruption, $200 max for bags delayed more than 24 hours; $150/day up to $1,000 max. For travel delays 6 hours or more; $50,000 medical; $750 dental (included in medical); $250,000 medical evacuationO Travelex Travel Lite Plan, $129. Covers $1,500 trip cancellation; $2,250 trip interruption; $200 a day up to $250 for bags delayed more than 24 hours; $200 a day up to $750 for travel delays 5 or more hours; $50,000 medical; $750 dental (included in medical); $50,000 medical evacuation (included in medical)O Travel Guard Essential, $99. Covers $1,500 trip cancellation or interruption; $100 for bags delayed more than 24 hours; $10,000 medical ($50 deductible); $500 dental (included in medical); $100,000 emergency medical evacuation-Family plans - Travelers can save buying a family plan, instead of individual insurance. Travel Guard's gold travel insurance plan includes children aged 17 and under at no additional charge. For a family of five (with three children aged 17 and under) a week in Aruba might cost $1,500, and the plan would run about $71 per adult and free for the kids. If you were to purchase separately, the kids would be charged about $53 each -- so you're saving $150 to $200 with a group plan. Q: What are some insurance promotions you can take advantage of?A: For a couple of months, 20 Mexican resorts were offering "swine flu insurance," which offered three free stays if you contracted H1N1 virus during your stay.-Now, the Mexican government, in its latest move to lure travelers back, is offering a free health insurance program for all visitors which will offer emergency medical care coverage, hospital stays, prescription drugs and ambulance services in the event that they contract the H1N1 virus. Sick tourists can access the insurance, dubbed the "tourist assistance card," by calling a toll-free phone number which connects them to a call center staffed with multi-lingual operators. Deductibles may apply in some cases, and patients must get treatment at "authorized" establishments.-Many Caribbean resorts offer "hurricane insurance," which aren't insurance at all, but are more like guarantees that you can rebook your stay or refund a portion or all of your money. The exclusions are usually a mile-long. -The economic crisis also spurred some unusual new insurance policies from travel providers. CruiseOne and Cruises, inc. Part of world travel holdings, offered a CruiseAssurance job loss insurance plan that covered the majority of cruise lines. To be eligible for a full refund, customers who had to cancel their vacation plans due to job lost must have been employed at their current job for at least a year and provide a letter of termination. The insurance covered everyone in the booking. This policy was free in addition to a basic travel insurance policy by Travelguard, which starts from $35. -Jetblue's Jetblue Promise Program refunded airfares and waived cancellation fees if you lose your job and needed to cancel a flight. Q: What are some tips on purchasing insurance?A: -Never buy insurance from your travel provider. If they go belly up, you're out of luck. Always buy from a third party (and most travel agents can sell you the insurance)-Know who is underwriting the policy. Ask for the name of the insurance company underwriting the policy. All legitimate policies must identify the insurance company and it must be regulated by the state in which it is sold.-If you are not familiar with the company providing your travel insurance, do a little research. Visit the company website, and check the credentials of the company's insurer through A.M. Best, an international insurance rating agency; or the better business bureau. Also check for membership in the U.S. Travel Insurance Association, which has a list of member companies that must adhere to strict legal and ethical standards.
-Use a comparison site such as www.insuremytrip.com to get competing quotes.
-Know if you have other coverage. When you travel, you might be covered by your credit cards, homeowner's insurance, or other sources.
-Remember there's a big difference in terms. We've heard of problems with vantage travel, which sells "travel protection," and interprets that as a "travel waiver," (i.e. "pay us $1,000 and if you can't take your trip now, we'll give you credit on a future trip.") That's not insurance! However, other legit companies will use the term travel protection to mean actual travel insurance underwritten by an insurance company.
-Keep a paper trail! When traveling, keep records and save all receipts in case you have to file a claim for travel delay, medical treatment, lost luggage, or any of other unforeseen situations.
-Make sure the insurance company has global capabilities. Do they have offices in cities around the world? Does it have a global network of doctors and hospitals?
-Find out if the insurance company has people on the ground to physically check out hospitals and clinics. Travel medical insurance provider Medex, for example, has doctors who examine facilities first-hand, and issues "Medex 360" reports on specific countries that includes top-tier local health facilities, and ranks the overall quality of care, risks and culture shock.
-Find out what foreign language capabilities are provided by the insurance provider's in-house associates. You don't want a critical medical procedure delayed because you can't communicate with the physician. A reputable travel insurance and assistance provider will have associates on site who collectively speak as many as 40 different languages. (per Access America)

Stats and Figures (Ustia)

Pre-9/11, it was estimated that only eight to nine percent of leisure travelers in the United States purchased some type of travel insurance. Today, it's closer to 30 percent.

Trip cancellation/interruption represents 90 percent of coverage.

Americans spent nearly $1.6 billion on travel insurance in 2008, reflecting a steady growth in sales of some 13% over the last two years, according to the U.S. travel insurance association's new travel insurance market survey for 2006-2008.

Traditional distribution channels such as travel agencies and travel suppliers such as cruise lines and tour operators are responsible for three-quarters of the market, but other channels such as online agencies, airlines, brokers, internet sites, and direct to consumer sales are growing steadily.

Travel medical and medical evacuation-only policies only cover a fraction of the total market, at 5.5 percent of travel insurance sales, but has increased by about 33 percent since 2006.