In many situations, travel insurance can be a lifesaver when adventuring a long way from home. Those protected by either a traditional travel insurance plan or those offered by their credit card providers can get assistance when flights get delayed, luggage gets lost, or when injured in an accident - saving thousands of dollars in care and recovery.
For all of the positive benefits of travel insurance, there are also a number of self-created problems travelers may run into, all of which stem from purchasing the wrong plan. From missing benefits due to letting key dates pass to purchasing the wrong type of coverage entirely, those who do not understand the ins and outs of their travel insurance may be making major mistakes that can cost them in the end.
Before planning a trip, it is important to understand the major travel insurance mistakes every traveler can make. Here are the seven most common pitfalls many international adventurers face when purchasing travel insurance.
Not Purchasing Travel Insurance Early Enough
When planning a trip, travelers may find themselves caught up in the details of their next adventure, including determining the perfect destination and accommodations. The need for travel insurance often falls by the wayside during this planning phase, left as an afterthought.
In this situation, travelers may not necessarily purchase travel insurance until it is far too late. Many travel experts recommend including travel insurance planning in the beginning steps.
According to travel insurance firm InsureMyTrip, there are three key times to purchase a travel insurance plan: when the first deposit on a trip is placed, shortly after a trip is booked, or just prior to departure. The longer travelers wait to purchase a travel insurance plan, the more benefits they may miss out on.
For example, travelers with pre-existing medical conditions who wait to purchase their travel insurance plan may lose out on coverage in the event of a recurrence of their condition. Additionally, travelers who wait to purchase a travel insurance plan until a known event is declared – such as a hurricane, terrorist incident, or medical emergency – may not receive coverage if those situations derail a trip.
To get the maximum level of coverage, be sure to purchase travel insurance during the trip planning process. Those preparing for an international trip should purchase their policy within the first 21 days of placing the first purchases or deposits.
Not Covering the Full Amount of Your Trip
When purchasing travel insurance along with initial plans or a first deposit, travelers may not have their entire itinerary aligned. While one may know the full price of their cruise or airfare, they may be missing other pieces of their plans, such as hotel pricing or shore excursions.
In this situation, travelers may not be fully covering their trip prior to departure without adding the additional travel plans. In the event a traveler needs to file a claim, those who did not extend their travel insurance policy to the entire cost of the trip could receive a reduced amount on their claim – or find a portion of their adventures were not covered at all.
When purchasing travel insurance early, travelers should make note of any additional costs added after securing their policy. Many travel insurance plans allow policy holders increase their coverage as their plans develop, retaining all of the early purchase benefits and extending them to the remainder of the itinerary. By including additional purchases in a travel insurance policy, international adventurers can ensure they are completely covered in any situation.
Not Purchasing Travel Insurance Prior to Arrival
While many individuals think nothing of their home, auto, or health insurance at home, many of those protections do not extend to other nations. If travelers find themselves injured or sick upon arrival, they could be forced to pay for their treatment costs out of pocket.
To further complicate things, some countries require travelers to provide proof of travel insurance prior to being accepted into a country. For those adventuring to some of the most remote or sanctioned parts of the world, including Cuba or Poland, travel insurance is much more than a safety net – it is a requirement for foreign tourists.
Those who arrive without proof of trip insurance face one of two options: purchase an expensive, state-run travel insurance plan at customs, or potentially face denial of entry into the nation and get deported on the next flight home.
Prior to arrival, smart travelers go out of their way to understand the entry requirements of their next nation, including visa requirements and travel insurance demands. If your next destination requires an active travel insurance plan, be sure to select the right plan sooner rather than later.
Not Understanding Coverage Terms
When new travelers consider purchasing a travel insurance plan, one of the biggest misconceptions they face is believing they are covered for one situation. The truth is that claims can only be filed for a completely different set of circumstances.
One of the most common travel insurance misconceptions is the coverage that comes with trip cancellation insurance. While some travelers believe they may be allowed to cancel their trip for nearly any reason, trip cancellation actually only covers a very narrow set of incidents, including the death of an immediate family member or experiencing a car accident on the way to the airport. Unless the traveler purchases "Cancel for Any Reason" coverage, they would not receive any reimbursement under a travel insurance claim unless it fell under one of the approved situations.
Another common coverage misconception revolves around sports and “hazardous activities.” While travel insurance may offer protection for many run-of-the-mill situations, it may not cover sports outings, sporting equipment, or other hazardous activities without an additional benefit purchase. Before making plans to run with the bulls or partake in other high-risk behavior, be sure they are covered under your travel insurance plans.
Purchasing the Wrong Coverage
For novice travelers, many travel insurance plans may look the same. How can travelers determine which option is best before they depart?
When it comes to travel insurance, there are three distinct types of policies to consider: medical, comprehensive, and annual. Medical travel insurance plans offer coverage for injuries that result from accidents or terrorist attacks, but may not cover lost luggage or interrupted trips. A more comprehensive plan may cover baggage loss, baggage delay, and trip cancellation, but not offer a full suite of medical coverages, including medical evacuation in the event of an emergency. Finally, an annual travel insurance plan may offer coverage every day of the year in a balance of medical and comprehensive benefits, but can also be subject to lifetime maximum benefits and activation only when far from home.
Before purchasing a travel insurance plan, be sure to understand the complete scope of coverage and how it may apply to a trip. In some situations, a medical travel insurance plan may offer more value than a comprehensive plan – especially on longer trips to underdeveloped nations.
Traveling with Uncovered Items
When the personal electronics ban affected international travelers heading directly to the United States, many were forced to pack their laptop computers, cameras, and other items in checked luggage. While most arrived intact in one piece, many of those would not have been covered by common travel insurance plans.
Although most travel insurance policies cover checked luggage for damages and loss, certain fragile or priceless items may not necessarily be included through standard plans. Examples of excluded items include electronics, high-priced jewelry, antiques and heirlooms, and items seized by customs officers. If any of these items are damaged or removed from luggage, a travel insurance claim may not be enough to recover those items.
When traveling with potentially sensitive items, be sure to understand what will be covered under a trip insurance. If a damaged or lost item isn’t included in a travel insurance policy, it may have to be shipped, carried on with the traveler's hand baggage, or left at home entirely.
Underinsuring or Overinsuring Your Next Trip
Finally, not all travel insurance problems come from misunderstanding coverage levels or purchasing the wrong plan. In some situations, travelers may be purchasing too much or too little insurance prior to the next adventure.
While travel providers (like airlines and online travel agencies) often provide travel insurance as a courtesy to their customers, these plans may only offer a small level of protection. Discounted policies are limited to a coverage level that may only protect one part of a trip, like a flight or hotel room. In addition, these plans may only offer reimbursement for a limited number of qualifiers, like car accidents on the way to the flight, but not on the way to the hotel.
Conversely, travelers who work with a travel agency, alumni organization, or other tour organizer are sometimes at risk of paying too much for an insurance policy. In these situations, the provider may offer a comprehensive travel insurance plan at an inflated price, claiming to be the official plan of the policy. In these situations, the price may be inflated by the tour operator in order to get an additional profit on the back of the traveler.
Those who are concerned that their trips may be underinsured or overinsured could be best served by shopping around for a travel insurance plan. Although travel insurance should be purchased prior to departure, international adventurers should not be pressured into purchasing the first travel insurance plan they see, either.
Be Smart When It Comes to Travel Insurance
Although travel insurance can be a complicated topic to discuss and consider, everyone can prepare themselves before they leave their home. By shopping for a travel insurance policy before their trip, understanding what is and is not covered, and making a plan in case of a claim, everyone can get the right amount of coverage before their trip.
Before settling on a travel insurance plan, be sure to research plans and consider which one would best serve your needs where you go. In some situations, travelers may be adequately covered by their credit card providers. It is important to understand the limitations of credit card based insurance policies and consider purchasing a third-party insurance plan that can offer more robust coverage prior to departure. Understanding the benefits and limits of travel insurance can help travelers make the best coverage decision for their trip.
By doing due research and asking the right questions, every traveler can become a travel insurance expert before departure. In avoiding these seven common travel insurance mistakes, everyone can be a better traveler and traverse the world without fear.