Three Common Misunderstandings of Travel Insurance

Your travel insurance policy may not cover every situation it advertises.

Woman at the airport check-in counter
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When modern-day adventurers consider adding a travel insurance policy to their next excursion, many ideas may come to mind of what situations are covered, and which situations are disqualified. Like every form of insurance, travel insurance also comes with many regulations that govern which situations are covered, and which ones are disqualified. Because a traveler selects a certain travel insurance policy does not mean their individual scenario will be covered.  

Before purchasing a travel insurance policy, travelers need to understand which situations are often covered, which ones are not, and which situations are purely made up. Here are three common travel insurance misunderstandings that every traveler needs to know before they decide to buy a policy. 

Misconception: travel insurance will only cover medical events

Fact: Although medical concerns are one of the primary reasons travelers consider purchasing a travel insurance policy, the right plan can cover much more than just an illness or injury. Many travel insurance policies offer provisions for all situations that can occur during a trip, including trip delay, baggage loss, and other common frustrations. 

To ensure travelers are covered for every scenario, every adventurer needs to read the find print of their policies. In particular, be sure to understand the situations where benefits for trip cancellation, trip delay, and baggage loss apply. When travelers know how their benefits work, they can ultimately apply them to their next trip in the worst case scenario. 

Misconception: "trip cancellation" means I can cancel for any reason

Fact: This may be the biggest misconception travelers face when purchasing a travel insurance policy. Although a trip cancellation policy allows travelers to cancel their trips, it does so under a very limited set of circumstances 

Traditional trip cancellation benefits often covers events that would prevent one from going on a trip, such as a medical emergency, death of an immediate family member, or a car accident on the way to a departing airport. In order to make a claim for trip cancellation, a claimant must prove the qualifying event actually took place. 

Those travelers who are concerned about cancelling their trip for another reason, such as a veterinary emergency or work situation should consider purchasing a plan with Cancel for Any Reason benefits. Although a Cancel for Any Reason benefit will allow travelers to stop their trip for literally any reason, they may only recover part of their trip costs back - usually around 75 percent of the insured trip costs. In addition, Cancel for Any Reason benefits often add a nominal amount to the total trip insurance policy. 

Misconception: With health care reform, all of my medical situations should be covered 

Fact: Although health care reform has added benefits to regular health insurance, they do not apply to travel insurance policies. As International Medical Group explains, the Patient Protection and Affordable Care Act may not govern short-term, limited duration travel insurance policies.

As a result, travel insurance policies do not often cover pre-existing medical conditions. For example: if a traveler were to experience an onset of chronic illness or receive an injury from 30 days to 12 months before their trip, a recurrence or worsening of that condition may not be covered by a travel insurance policy.

To make sure a travel insurance policy covers all conditions, travelers must ensure their insurance comes with a pre-existing condition exclusion waiver. This valuable buy-up will add an additional sum to the total insurance premium, and may require travelers to purchase their travel insurance within 15 to 21 days of putting down the first payments or initial deposits on a trip.

By understanding how these common misunderstandings affect a travel insurance policy, travelers can make sure they are purchasing the right policy for them, no matter their overall needs. 

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