Travel doesn’t always work out the way you expect. In the age of COVID-19, we know that all too well.
As the pandemic continues to disrupt and cancel vacations, many people are taking steps to try and minimize the challenges of altered travel plans. Data suggests that the pandemic prompted more Americans to purchase travel insurance ― or at least to consider it.
But with so many novice travel insurance purchases out there, missteps inevitably occur. We asked experts to share the common mistakes people make when buying travel insurance ― as well as their advice for maximizing coverage and minimizing costs.
Waiting too long to buy it
“Travel insurance is designed to cover unforeseen, unexpected occurrences,” said Megan Moncrief, chief marketing officer of the travel insurance comparison site Squaremouth. “So it’s important to buy a policy before an event happens that could impact your trip.”
For example, she said, you might be concerned about hurricanes if you booked a Caribbean cruise in early September. “It would be important to purchase the plan prior to the weather event ― notably, prior to a storm being named,” Moncrief explained.
The sooner you buy your travel insurance, the more protection you’ll have.
“It’s best practice to purchase travel insurance right after your initial trip deposit ― like when you book your flights or hotel stay,” said Jeff Rolander, director of claims at the travel insurance startup Faye. “In general, to have access to your policy’s entire array of benefits, you must purchase travel protection within 14 days of your initial trip deposit.”
Not checking your credit card benefits
“The biggest mistake is buying insurance that you don’t need or overbuying coverage,” said money and budgeting expert Andrea Woroch. She noted, for instance, that many people don’t realize rental car insurance is often included in your car insurance policy or credit card.
Check your credit card information to see if there are any travel insurance benefits. If you book your trip with that card, then you’ll qualify for those benefits and won’t need to purchase a separate travel insurance policy.
“It’s important to understand what type of coverage a credit card offers, which can include delayed baggage, lost/damaged baggage, trip delay, cancellation or interruption, medical treatment or evacuation, travel accident and/or rental card insurance,” Woroch said.
If you take frequent trips but have a credit card that doesn’t offer travel insurance, consider looking into a new card to help you cut down on insurance costs. Woroch suggested comparing travel credit cards on sites like CardRates.com.
She pointed to the Chase Sapphire Reserve card, which includes trip cancellation and trip interruption insurance up to $10,000 per person and $20,000 per trip (in addition to trip delay insurance, baggage delay insurance, lost luggage insurance, rental car insurance and travel accident insurance). Woroch noted that the Southwest Rapid Rewards Plus Credit Card offers similar benefits.
“You may even have travel insurance through various memberships without realizing,” she said. “For example, the AAA Premier Membership plan offers robust travel coverage including up to $1,500 in trip interruption or delay and lost baggage coverage for up to $500.”
Purchasing the wrong policy for your needs
Not every travel insurance policy is appropriate for every situation.
“When buying travel insurance, it’s important for travelers to have a good sense of the specific concerns they have about their trip and the type of coverage they are looking for,” Moncrief said. “Especially post-pandemic, we’re seeing a new group of travel insurance consumers who aren’t as familiar with the product.”
Indeed, purchasing travel insurance requires some reflection and research. Before paying premium prices, think about what you do and don’t need covered, and consider calling a professional if you’re still unsure.
Glossing over the fine print
“Another big mistakes is not knowing what is covered under the travel insurance you purchase, as most people don’t read the fine print,” Woroch said. “So do your homework and research details ― otherwise you may be thinking you’re getting something that you aren’t.”
Remember that travel insurance is like other forms of insurance, so it doesn’t cover anything and everything.
“Read your plan document when you purchase travel insurance,” said Angela Borden, product marketing strategist with the travel insurance company Seven Corners. You’ll have “a better understanding of your benefits, which can remove some of the frustration of going to file a claim and realizing that your situation is not covered,” she said. And “you’ll know what actions you must take, such as filing a claim within a certain time period.”
Paying more than necessary
The correlation between price and value exists in the insurance world, but that doesn’t mean everyone should pay top dollar for their travel insurance.
“Once you find the policies that provide adequate coverage, travelers shouldn’t shy away from the least expensive option,” Moncrief said. “Premium is based on trip factors such as length of trip, number of travelers, and their age ― it is not an indicator as to how reputable the provider is, or the ease with which their claims process is handled.”
“In general, if a traveler is looking to protect the cost of their trip with a cancellation policy, they should expect to pay between 4-10% of that cost,” she continued. “Most travel insurance policies are comprehensive and include several benefits in addition to trip cancellation coverage. Travelers who do not have any nonrefundable expenses, or who otherwise aren’t concerned with insuring their costs, can find a much more affordable plan with helpful benefits such as emergency medical and evacuation, delay and baggage.”
Misunderstanding the claims process
“The most common mistake we are seeing today has less to do with purchasing a plan, but rather how to use their plan, specifically in the claims process,” Moncrief said. “Travel insurance is designed to make a traveler whole, reimbursing for unplanned expenses incurred throughout their trip.”
For example, travelers who experience issues or inconveniences during a trip might be offered vouchers or credits from vendors, like the airline. But this can complicate matters.
“In order to be eligible for financial reimbursement from their policy, [the traveler] must not have received any reimbursement, credits or vouchers from their travel supplier,” Moncrief noted, emphasizing the importance of understanding one’s coverage and what will be needed in the claims process.
“Most travel insurance policies come with a ‘money back guarantee’ period, in which a traveler can cancel their policy for a refund if they review their terms and are dissatisfied with their plan,” she said. “All policies also come with 24-hour emergency assistance while traveling. In the event they need to use their policy, we recommend contacting this assistance department right away, as they can walk them through their eligible benefits, and can often head off the claims process.”
Forgetting medical coverage
“Many international travelers don’t know that their primary health insurance doesn’t provide coverage abroad,” Moncrief noted.
For this reason, it’s helpful to consider a comprehensive plan that includes travel medical insurance, in addition to coverage for things like lost luggage and trip cancellation or disruption.
“Most Americans, when they think of travel insurance, they think about and [are] concerned about protecting their trip, where in fact the biggest financial risk they may face is unexpected injury, illness, and/or medical evacuation while on their trip,” said Omar Kaywan, co-founder and chief growth officer at Goose Insurance. “The biggest mistake consumers make is not buying travel medical, and/or buying travel medical that doesn’t suit their needs.”
He noted that most policies limit preexisting medical conditions and may have specific exclusions. So if you have a preexisting condition, be sure to double-check the policy wording before you make a purchase. The same goes if you plan to participate in certain sports or activities.
“Some policies exclude participation in sports such as scuba diving, spelunking, bungee jumping, or any kind [of] team sports, so consumers that are planning to participate in sporting activities must review the policy wordings prior to purchase,” Kaywan said. “We have seen one too many mistakes of buying a policy for a ski vacation that you don’t have coverage for.”
Pay attention to exclusions for specific destinations and the rules that are in place on the ground there.
“If you are traveling internationally, please review the requirements of the country you are visiting to ensure your travel medical policy suffices,” Kaywan cautioned. “As COVID is still [in] our midst, many countries require coverage for medical attention and/or quarantine expenses.”
Not calling customer service
“When you purchase from a travel insurance company, you work with licensed insurance agents who can answer all your questions and help you choose the best coverage for you,” Borden noted.
Good insurance providers should also be able to assist you after you’ve purchased a policy and in the event you need to file a claim. Seek out companies with good customer service that allows for communication with humans, not just bots.
“Avoid mistakes by simply calling your desired travel insurance provider pre-trip, and asking them for more information related to your query,” Rolander said. “If you can’t get ahold of them or get clear responses to your questions, that’s a red flag signaling that you should be checking with other providers to cover your trip.”
He noted that calling will help you learn about inconvenient travel scenarios that can qualify for reimbursement ― like accidental damage to a vacation rental (broken lamp, wine stain on the carpet, stove fire), tickets for activities you can no longer attend, flight delays and cancellations (and related expenses like food or hotels), or even delayed luggage.
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