With a host of booking disruptions and cancellations plaguing travelers in recent months, getting travel insurance – maybe even for the first time – is a worthwhile consideration ahead of upcoming trips. Since late February, jet-setters around the world have faced numerous travel advisories, flight disruptions due to regional tensions in the Middle East, and the impacts of higher jet fuel prices. In the United States, relevant industry developments include hours-long delays at airport security.
With all the complications that have contributed to stressful travel and industry disarray, we tapped World Nomads’ Head of the Americas, Christina Tunnah, for insight on why travel insurance is important now. Here’s what travelers need to know about navigating policy options and the travel insurance coverage gaps that many don’t discover until it’s too late.
The Coverage Basics Every Traveler Should Understand
Tunnah provided insight on crucial benefits travelers often overlook when considering whether they even need coverage. They include pre-departure, post-trip, and trip interruption insurances – all of which can be helpful amid today’s complex travel climate.
“Depending on where you are, there are regulations that require airlines to make the traveler whole. However, most travel insurance will not cover the liabilities of another entity, whether that be an operator or an airline,” explained Tunnah. “But if you get ‘CFAR’ travel insurance (see definition below) as an add-on or upgrade to your baseline policy, you’ll have greater flexibility to cancel your travels before or during a trip.”
And while CFAR can offer additional provisions to make a traveler whole, Tunnah noted that travelers must purchase the add-on within a certain period after making their first deposit on a travel or excursion booking.
Your Travel Insurance Coverage Gap Questions, Answered
What do travelers consistently overlook when considering whether they should purchase travel insurance?
- Getting pre-departure travel insurance around the time you purchase or make deposits on your travel bookings can help you avoid the vulnerability of being without coverage should something go wrong before the trip. Post-departure insurance may cover the loss of “anything you’ve paid for” after experiencing a disruptive medical event or travel interruption during your trip.
- To be covered, your insurance likely needs to have been purchased before a natural event (like a storm or hurricane) was declared or named.
- It’s crucial to shop around for the travel insurance policy or bundle that best provides coverage for what’s most important to you, your particular destination for that trip, and the excursions that you’ll be doing.
- According to Tunnah, don’t anticipate being covered if your claim is attached to an instance of personal negligence or recreational intoxication.
- You need to double-check whether your policy actually covers items like excursion gear, your laptop, prescription glasses, prosthetics, and expensive clothing and jewelry. Even if covered, a policy sub-limit can leave you paying out of pocket. In those cases, the maximum payout from the insurance company for an individual item only ends up being a partial amount of what you paid for it in total. Another caveat, Tunnah says, “usually sporting equipment while in use is not covered because you ensure the traveler has control over how you use that equipment.”
- Certain destinations (North Korea, Libya, Cuba, etc.) aren’t frequently covered due to sanctions and the inability to provide proper coverage and care to someone in those places.
- Per industry standards, travelers should expect to spend around 5% to 6% on their travel insurance.
What travel insurance coverage gaps do travelers usually discover too late and regret not knowing about?
Tunnah said people often have travel insurance coverage gaps around policy limits and sub-limits.
Also, she said medical coverage with one’s travel insurance is generally what travelers regret the most not having. Tunnah added that common coverage gaps are tied to details of a person’s medical coverage, such as policies on preexisting medical conditions and look-back periods. Additionally, incurred medical costs “have to be reasonable and necessary.” Insurers are unlikely to reimburse for add-ons they deem excessive during a hospital stay.
“They always underestimate the cost of a medical event or a hospital visit,” Tunnah said of a common mistake that travelers make. “And in many cases, especially when you’re doing adventure activities, they underestimate the cost of a medical evacuation.”
What industry jargon and fine print often confuse people who are looking for travel insurance?
- “Being whole”: Tunnah clarifies that an insurance company making someone “whole” means returning that person to the financial position they were in before an event lost them money.
- “CFAR”: The term stands for “cancel for any reason.” Tunnah notes that CFAR is usually an optional upgrade that provides flexibility if you need to cancel your trip.
- “Named perils”: According to the expert, some policies cover everything while others cover only named or listed circumstances. Tunnah noted that in the latter case, “if what happened to you is not on that list, you’re not covered.”
- “Look back period”: The timeframe by which a medical condition “needs to be stable before it can be considered coverable.”
- “Policy limits and sub limits”: Think of the policy limit as the maximum amount your policy will pay you for the particular event your claim revolves around. Sub-limits are the categories within the policy limit that each have their own designated ceilings for the maximum amounts that you’ll be paid.
- “Waiting/elimination period”: The gap between when you purchase your insurance and when that coverage actually begins. It’s something Tunnah says trips up many travelers.
The Bottom Line On Travel Insurance
The importance of travel insurance remains simple. While you might not want it or anticipate needing it, it can be a critical fail-safe in cases when travel goes wrong or is disrupted. Travel insurance coverage gaps can be tricky, but taking your time to understand jargon definitions can make a world of difference. To confidently pick the best coverage option, clarity will be your best friend.
“I always say, if you have a question about a particular scenario in your head, call the underwriting company, and say, ‘I’m worried about XYZ. Does this plan cover it?'” encouraged Tunnah.
“People overlook that if you have travel insurance, you have an assistance number,” she added. “It’s not only for when you hurt your leg. You could be lonely, you could be feeling emotionally vulnerable – call the assistance number and say, ‘Hey.’ We’re there to be that little angel on your shoulder that helps you navigate stuff… Make the call. You pay for benefits.”
“Not all companies and plans are necessarily the right plan for every trip you take,” the expert emphasized as a final tip. “Match the plan you’re considering to the trip and the activities you’ll be doing. You don’t want to be underinsured, but you don’t want to be overinsured either.”
