by “My insurance company denied the claim because my policy excluded war and hostilities between nations,” says Meiri, a college professor in Tenants Harbor, Maine.
In other words, she had the wrong 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 policies can exclude a range of activities, including mountaineering, skydiving, scuba diving, paragliding and ski touring.
The pandemic and volatile geopolitical situations have fueled interest in travel insurance coverage. But the choices can be overwhelming. For example, Berkshire Hathaway Travel Protection offers eight plans, such as WaveCare cruise insurance and policies that cover road trips and luxury travel.
Reality check: Unless you have a special concern or a crystal ball, it can be hard to know if you have the right plan. “By design, travel insurance helps protect you against certain unforeseen events,” says Chris Carnicelli, CEO of Generali Global Assistance. So you wouldn’t know you had the wrong policy until something happened that wasn’t covered, like a military invasion.
Yet, is it possible to tell if you have the wrong travel insurance policy? Yes, and here are some signs.
If your travel insurance policy is not “cancelled for any reason”
Travelers often mistakenly believe that travel insurance covers everything. This is not the case. A “cancellation for any reason” insurance policy, which is usually more expensive, will allow you to cancel your holiday and receive a partial refund. But most insurance only covers specific, named events, such as trip interruption or lost luggage.
If your credit card’s travel insurance is limited
“Assuming your credit card insurance is as solid as a stand-alone policy is a common mistake travelers make,” says CoverTrip founder Damian Tysdal.
Credit cards may provide basic coverage, including for trip interruptions, evacuations, and lost baggage, but coverage may be limited. Tysdal says some maps, such as the Chase Sapphire Reserve, can offer more coverage, but most don’t have enough.
Helen Prochilo, a travel consultant from Long Beach, NY, remembers one of her clients wanting to rely on her credit card to cover a $14,000 Danube cruise. Prochilo asked the traveler to read the fine print, which revealed it would only cover $3,500 in losses if she had to cancel. His client ended up buying a stand-alone policy.
“Two weeks before they left, her husband developed pneumonia and they had to cancel,” she says. “She would have lost over $10,000 had she relied on credit card insurance.”
If travel insurance was a real godsend
“The cheapest is not always the best,” says Laura Heidt, insurance office manager at Brownell Travel.
Fonts can be expensive. A conventional policy that covers named perils, such as flight delay or hospitalization, will cost 7-9% of your prepaid, non-refundable expenses. A cancel for any reason policy, which allows you to cancel your trip and receive a 50-75% refund, will cost you 10-12%.
Here’s an insider tip: the more complicated your trip, the more likely you’ll need insurance. “If your vacation requires you to take multiple modes of transportation to get to your final destination, it would be wise to consider purchasing a policy that includes a cancellation benefit for any reason,” says Beth. Godlin, president of Aon Affinity Travel. Practice.
If you’re only concerned about policy caps
Too often, travelers fixate on policy maximums – the amount insurance will pay for a covered event – but ignore what isn’t covered. Travelers sometimes don’t pay attention to exclusions, such as adventure sports. Sometimes they don’t pay attention to effective dates, assuming they’re covered on the days they aren’t. I once had a reader who booked an extension for a cruise and filed a claim, but his policy had already expired.
“Don’t look at the policy maximum and nothing else,” advises Narendra Khatri, director at Insubbuy, an online travel insurance marketplace. “Take your time, review the benefits, and see what’s 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’re fully covered. If you buy directly from a travel insurance company, you will get information about your options but less personalized advice.
If the cost of your trip has just increased
Suppose you added a tour or rental to your trip after purchasing insurance. You may now have the wrong policy.
“The most common way people end up underinsured is when they buy an insurance plan with a declared trip cost and then spend more on additional travel arrangements for their trip,” says Dan. Skilken, president of TripInsurance.com.
Fortunately, there is a fix. Many travel insurance companies will allow you to adjust the cost of your trip after purchasing 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 from a cruise line or tour operator, which are generally not changeable.
Above all else, 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 questions.”
Skimming a travel insurance policy may be the biggest mistake travelers make when purchasing travel insurance.
“Yes, the materials are long and not exactly exciting to read, but grab a cup of coffee and dig in,” says Christina Tunnah, Americas General Manager of 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.”
You have doubts ? You can get a refund on your travel insurance.
It’s too easy to end up with the wrong travel insurance policy. I mean, who has time to read the entire Politics? Who remembers to check with his insurance company if he added another component to his vacation?
I am okay. I just rented a car from Audi on Demand in Houston and assumed my travel insurance policy would cover me. This was not the case. I wouldn’t have known – unless I was writing this column. Fortunately, my Visa Signature card does cover the Audi, so there’s this.
If you find you have the wrong travel insurance policy, there is a solution. Many policies offer a “free visit” period between 10 and 15 days after purchase. You can usually cancel the policy and receive a full refund if you are within your trial period.
