10 Tips on What is the Best Travel Insurance Now: At Solo Trekker 4 U, we often are asked questions about travel insurance since individual travelers have concerns about safety, recovery for lost or stolen items or hospital costs for illness or injury. More recently, we have been asked about trip cancellation insurance. A special interest has been in insurance that allows for cancellation for any reason. We do not sell travel insurance so we are totally impartial.
10 Tips on What is the Best Travel Insurance Now: Why get travel insurance?
- Robbery: On one trip abroad, I was glad I had purchased travel insurance. Traveling solo, I was robbed in broad daylight. While boarding a train in a major European capital, I was rushed by an enterprising band of five bandits. On return home, I received full reimbursement for stolen items and my $32 taxi fare recovering stolen airplane tickets. See our 7 Travel Insurance Tips for Your Next Solo Travel.
- Health insurance: Another reason to purchase travel insurance? Even healthy millennials can break a leg skiing or riding a moped on winding mountain roads. If your health insurance doesn’t cover travel abroad, then you do need travel insurance.
- Cancellation. If you are likely to have to cancel because of illness, family emergency or a work crisis, you need a trip cancellation policy.
10 Tips on What is the Best Travel Insurance Now: What kinds of travel insurance policies are there?
In general there are three basic types of travel insurance policies. General trip insurance policies only cover illness, injury or damage, theft or loss of personal property while actually on travel. A second type of policy is a cancellation policy likely to include the following kinds of reasons for cancelling:
(a) Traveler’s Illness or that of certain family members, traveling companion or other stated persons;
(d) Severe damage/destruction of home
(e) Unavailability of traveler or travel companion due to 3rd party circumstances, such as call to active military duty
An upgrade may be available for “Additional Unforeseen Events” such as:
(a) Host’s illness;
(b) Airline bankruptcy/default,
(c) “a Terrorist Incident in a City listed on the Insured’s itinerary within 30 days of the Insured’s scheduled arrival”;
(d) Job layoffs or certain work requirements;
(e) Traffic accident or assault shortly before departure.
With increased security concerns around the world, some travelers say they are postponing traveling abroad. However, when does travel insurance cover cancellation for any reason?
10 Tips on What is the Best Travel Insurance Now: What travel insurance do I need if I may want to cancel?
- For hotels alone, I would say you don’t need a trip cancellation policy. The reason? Many, if not most hotels, have fairly liberal cancellation policies at least up until the last minute. Also the number of days/total cancellation fees tend to be limited.
- Flights. I do recommend getting trip insurance to cover a costly international flight if it is non-refundable. However, first compare the costs of foregoing insurance and getting a somewhat more expensive ticket allowing changes/cancellation?
- A little known but big charge: I recently had to change a non-refundable flight abroad. The charge to make a change was only $300. That sounded workable to me. Then the big surprise came! To change departure and return days on the very same route, I also had to pay the increase in the airfare. In a short month, the special Internet deal and the standard economy price added another $600. As a result, my economy ticket round trip went doubled. It went from about $940 to approximately $1800. In the future, I will really consider whether I want to buy such a non-refundable ticket again.
10 Tips on What is the Best Travel Insurance Now: Which travel insurance should I get?
There are several key considerations.
- What reasons for cancellation are covered?
- The “Cancel for Any Reason” option offers extended coverage for specific, unforeseen reasons. Trips can be canceled at least 48 or 72 hours prior to the departure date, depending on your plan.
- This policy is especially helpful for “one-percenters”, i.e., not billionaires. These include anyone likely to have unusual reasons for cancellation, including:
- You are a small business owner and have a major customer crisis requiring you to stay at home.
- Your dog’s caregiver has suddenly retired, and Fido is not welcome on your horseback safari.
- You just lost your job in the middle of the summer and must pound the pavement until Labor Day.
- Your promised visa never arrived in time for your departure.
Three other considerations:
- If illness or other issue has occurred for a travel companion, does that cover your cancellation?
- What constitutes “acts of war” which may be an exclusion?
- Are you concerned about sudden natural disasters or terrorist attacks?
10 Tips on What is the Best Travel Insurance Now:
Consider a Cancellation for any Reason (“CFAR”) Policy:
Here are some examples of a CFAR’s provisions. However, products offered by different companies vary widely:
- It may need to be purchased as an upgrade. As a result, there is a timeliness requirement. That is, it may need to be purchased at the same time, and along with, underlying more basic coverage. (There are also standalone policies, but they likely have an advance time certain as to when they must be purchased.)
- The policies range as to the level of coverage. They may only provide 50-75% coverage not 100%. In addition, it will likely be limited to “non-refundable” costs. Therefore, the traveler would need to provide documentation such as receipts as to what was paid and what was refunded. Those would then be submitted to the claims department of the insurance company. This does take some time, patience and good recordkeeping.
- A last important feature: Check what each CFAR policy allows as to the time when cancellation is permitted. It may only be cancelled up until 48 hours before the trip. (However, one insurance policy we reviewed had a separate upgrade that is for specific “Additional Unforeseen Events”. That included “a Terrorist Incident in a City listed on the Insured’s itinerary within 30 days of the Insured’s scheduled arrival”. In purchasing such a policy upgrade, a traveler would need to look carefully at how a “Terrorist Incident” is defined. In addition, how does that work in conjunction with a window within a time such as 48 hours prior to departure?)
The best way to figure out what, if any, cancellations are covered is to look at: 1. Express provisions 2. Exclusions and 3. Definitions as to both of those. Although reading insurance policies and all the fine print is tedious, each policy governs as a contractual agreement between the parties subject to state law.
As described above, the key points to note are the following:
- Some providers offer CFAR options only as an upgrade to one of their other policies.
- In addition, the traveler may have to purchase the CFAR within a stated period time like 15 days and cancel 48 hours or so prior to departure not really last minute.
- There may be a catchall provision limiting coverage to the “insured” non-refundable amounts.
- There are two takeaways from the latter point. First, the traveler may have to go back to vendors, such as airlines, hotels, tour operators or others and see what refunds they allow. Then the insurer would cover the non-refundable portions.
- Where it gets tricky is any exclusions which might be for reasons not under the traveler’s control.
In any case, in a dispute, the insurance company will argue that the strict language of the policy governs.
10 Tips on What is the Best Travel Insurance Now: How to Succeed in Getting Reimbursed:
Once you have selected the right travel insurance policy, making a claim depends upon the following:
- Being able to show that your loss or claim fits within one of the covered, insurable losses.
- Providing adequate documentation of the loss. In case of a robbery, that likely includes a police report. This can be tricky if you are robbed abroad or in transit from one country to another. If you are unable to get a police report, try checking with your embassy or consulate. See if they can take a report that the insurance company will accept.
In sum, before you travel, consider buying travel insurance if:
- Your health insurance does not cover illness or injury abroad.
- You are traveling with valuable items that may be lost, damaged or stolen.
- You are likely to cancel a trip because of illness, family emergency or a work issue.