Value in travel insurance

WASHINGTON — I used to rarely purchase travel insurance. Sometimes it was about the cost, but mostly it seemed unnecessary. I just took my chances.

Until mega-storms decimated some of the sun-kissed Caribbean destinations I love. Civil unrest in other parts of the globe has also left me considering what I would do if I wanted to cancel a trip.

And then came the outbreak of the coronavirus in China, where already more than 1,000 people have died. I’m so worried about people getting sick and losing their lives.

I think about those poor souls trapped off the coast of Japan on a cruise ship where at least 135 cases of the virus have been confirmed.

Although you don’t want to think selfishly at times like this, recent extreme weather events and now the coronavirus might make you wonder how to protect a scheduled trip.

What if you’ve planned for years to take a trip to China? You’ve paid thousands of dollars — hopefully money saved — to take this epic journey, but now you’re too scared to travel. Or, you can’t take the vacation because of restrictions.

You might decide it’s a good idea to get travel insurance. But this isn’t a purchase you should make without asking a lot of questions, starting with what’s covered.

Travel insurance typically costs between 5% and 10% of the total cost of a trip, but can vary based on your age, amount of coverage requested, details of the trip itself and the number of people traveling, according to Erik Josowitz, an analyst at insurance-Quotes.

The gold-standard travel insurance policy will offer the option to “cancel for any reason” or “cancel anytime.” This insurance could kick in, for example, if you’re afraid to travel to any location because of the coronavirus. Such policies can cost as much as 50% more than a standard travel insurance policy.

“Since most travel insurance policies do not cover cancellation due to fear, travelers should purchase ‘cancel any reason’ riders to cover events at their destination that may cause them to cancel their plans,” Josowitz said.

However, there could be a catch even to the “cancel anytime” coverage. Your policy might have exclusions for known or foreseeable events and epidemics.

“What people want to do is look at the details of the policy they are considering,” Josowitz said in an interview.

Allianz Travel recently issued an alert about the virus, asserting the exact date that the public was alerted to the dangers of this health crisis.

“For customers booking trips to China and other impacted areas, the coronavirus became a known event on Jan. 22,” the company said. “Travel protection plans generally exclude losses caused by events that were known or foreseeable at the time the plan is purchased.”

So, if you purchased a standard travel insurance policy prior to Jan. 22, you might still have coverage for the loss of a trip booked to China or other impacted areas, Allianz said.

Allianz has received about 200 calls and 1,000 claims related to the coronavirus. Most of the claims are for trip cancellations, said Daniel Durazo, director of marketing and communications for Allianz.

Here’s something I didn’t know: “Many travel insurance plans exclude coverage for losses caused directly or indirectly by epidemics,” Durazo said.

The company pointed out that, as of Feb. 3, both the World Health Organization and the Centers for Disease Control and Prevention recognized the coronavirus as an epidemic.

“There are policies that limit themselves to covering health conditions that were not known, not preexisting, at the time the travel was booked,” Josowitz said.

That’s the thing with travel insurance. You’ve got to pay attention to policy exceptions, even for “cancel anytime” insurance.

When it comes to medical expenses, check whether your policy’s health coverage is primary or secondary.

A primary policy is designed to be the first payer for any incurred medical costs. A policy that is secondary would pick up costs not covered by a traveler’s personal health insurance company. “This may mean the traveler has to pay deductibles and copays out of their own pocket,” Josowitz said.

Also, be aware that policies will also have limits — a maximum the company will pay — and many will also have deductibles or other limitations.

Whether you’re worried about the coronavirus or a weather disaster, be sure to double-check the exclusions and limits of a policy prior to purchasing.

Where I would have simply dismissed travel insurance with no thought at all in the past, I’m giving it more consideration with each trip, as should you. Your dream destination may too easily become a nightmare.