Travel in­sur­ance: Think early, not later

The Buffalo News - - HOME STYLE - By Ed Perkins Send e-mail to Ed Perkins at [email protected] Also, check out Ed’s new rail travel web­site at www. rail-guru.com.

As you plan your 2019 trav­els, think about in­sur­ance needs early. Buy­ing within two weeks or so be­fore you make your first ad­vance pay­ment lets you avoid one of the most vex­ing in­sur­ance prob­lems: ex­clu­sion of ben­e­fits due to pre-ex­ist­ing med­i­cal con­di­tions. You may not need travel in­sur­ance at all, but if you do, you need to buy early. Your pri­mary in­sur­ance fo­cus should be on two ma­jor big­dol­lar risks:

• You have to can­cel or in­ter­rupt a trip for which you made large de­posits and pre­pay­ments that are ei­ther non­re­fund­able or carry heavy can­cel­la­tion penal­ties – penal­ties that are too stiff for you to just walk away from and for­get if you have to can­cel.

• You face med­i­cal costs dur­ing your trip that your reg­u­lar med­i­cal plan doesn’t cover – ei­ther doc­tor/ hos­pi­tal bills or hy­per-ex­pen­sive emer­gency evac­u­a­tion back home.

Trip Can­cel­la­tion and In­ter­rup­tion (TCI). If you have to can­cel a cruise, tour, va­ca­tion rental, or many other pre­paid travel ser­vices shortly be­fore de­par­ture be­cause you got sick or suf­fered an ac­ci­dent, you stand to lose a big chunk of your ad­vance pay­ments due to non­re­fund­abil­ity or can­cel­la­tion penalty. De­pend­ing on cir­cum­stances, those losses could ex­tend to sev­eral thou­sand dol­lars – more than you’d will­ingly ig­nore. TCI cov­ers and pays for any pre­pay­ments you can’t re­cover from sup­pli­ers, along with what you can’t re­cover from sup­pli­ers if you have to in­ter­rupt a trip and re­turn home early. Cov­er­age isn’t lim­ited to prob­lems you might face per­son­ally; it in­cludes prob­lems with your travel com­pan­ion or a close rel­a­tive who isn’t trav­el­ing.

The main dif­fi­culty with most TCI is that pay­ment is lim­ited to “cov­ered rea­sons” spec­i­fied in the con­tract and to events un­fore­seen at the time you buy. Cov­ered rea­son lists are gen­er­ally gen­er­ous re­gard­ing med­i­cal prob­lems and in­jury ac­ci­dents. And al­though most TCI poli­cies ex­clude pre-ex­ist­ing med­i­cal con­di­tions as “cov­ered rea­sons,” most poli­cies waive that ex­clu­sion pro­vided you buy the in­sur­ance within a spec­i­fied pe­riod af­ter you make your first pre­pay­ment for the trip – any­where from a week to a month, de­pend­ing on the com­pany. A waiver of pre­ex­ist­ing con­di­tion lim­i­ta­tions does not add any cost; you just have to ar­range it early.

But cov­ered rea­sons on most poli­cies do not in­clude work emer­gen­cies, des­ti­na­tion un­ease, and many other can­cel­la­tions, and that can be se­ri­ous. Over decades of travel, I’ve never had to can­cel a trip for a typ­i­cal cov­ered rea­son, but I’ve had to can­cel a hand­ful be­cause of un­ex­pected work de­mands. That’s why I rec­om­mend the op­tional “can­cel for any rea­son” cov­er­age that is avail­able on a sub­stan­tial num­ber of poli­cies. Of­ten, it’s an ex­pen­sive add-on, and it may not of­fer full 100 per­cent cov­er­age, but it in­su­lates you from po­ten­tial prob­lems reg­u­lar in­sur­ance doesn’t cover.

Med­i­cal. Your reg­u­lar health in­sur­ance may well cover you when you travel, and al­though Medi­care doesn’t cover you out­side the U.S., sup­ple­ments C and higher of­fer mod­est for­eign-coun­try ben­e­fits. That’s enough for many trav­el­ers. But the se­ri­ous fi­nan­cial risk is if some­thing re­ally big hap­pens to you – big enough to re­quire evac­u­a­tion from some re­mote area by he­li­copter or pri­vate jet that can run into tens of thou­sands of dol­lars – that many health poli­cies don’t cover. Med­i­cal ben­e­fits in travel in­sur­ance cover these un­likely but ex­tremely con­se­quen­tial risks. As with TCI, you can waive pre-ex­ist­ing med­i­cal con­di­tion ex­clu­sion by buy­ing early.

Other. Many travel in­sur­ance poli­cies also cover lots of small stuff, such as de­layed bags and de­lay ex­penses, but those are typ­i­cally small-dol­lar risks. If a pol­icy you’re con­sid­er­ing for the big risks in­cludes these mi­nor cov­er­ages, fine, but they’re not the main rea­son to buy. And if some com­bi­na­tion of your in­sur­ance and your credit card al­ready cov­ers you, cover­ing twice wastes money.

The take­away: If you don’t face a big fi­nan­cial risk, you prob­a­bly don’t need in­sur­ance; if you do face a big risk, you do. Don’t blindly take what­ever your air­line, cruise line or tour op­er­a­tor sug­gests; in­stead, check the big on­line travel in­sur­ance agen­cies that pub­lish elab­o­rate side-by-side com­par­isons of dif­fer­ent poli­cies, in­clud­ing in­sure­mytrip.com, quotewright. com, square­mouth.com and oth­ers.

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