Value in travel in­surance

Antelope Valley Press - - BUSINESS - Michelle Sin­gle­tary Color of Money SINGLETARY­[email protected]­POST.COM

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.

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