Why Travel Insurance is a Must

Do you have house or apartment insurance or car insurance, dental insurance or private medical insurance? Ask yourself “why?”

If it’s not because the banker requires that it be covered (car loan or mortgage), it is because you have decided that the risk of something bad happening is too great not to be covered.

I have owned cars for more than 40 years. During that time, I have had one claim — for a cracked windshield — yet I have paid, I estimate, about $30,000 in premiums. House insurance, likewise:   no claims and about $25,000 in premiums. Why do I continue to pay these premiums?

Because I get peace of mind.

That is what insurance is all about for most people. I know that if I have a serious problem, I am covered and that helps me to sleep better.

The same is true for travel insurance. Will one get a return on “investment”? Probably not, and truth be told, the traveler probably doesn’t WANT a return — it means sickness during travel or an accident or missed connection or vacation ruined in some other way. But isn’t it reassuring that one has this protection in case it is needed?

Travelers often have concerns and questions about paying extra for travel insurance. After all, they have just spent a lot of time trying to ensure they get the lowest price for the trip they are taking. They often ask “why add to that cost”?

There are some options to purchasing separate coverage for travel insurance.

Some credit cards offer insurance. But who does it cover and what are the limitations?

Some work places have travel insurance for the travel done by their employees. Again, what coverage does it offer?

Be sure to find out the right answers. Call the credit card company, who will probably give their insurance company’s phone number. Get all responses in writing (very difficult to prove a phone conversation) and be sure to understand the limitations.

Be sure to ask if the coverage is Primary or Secondary. Secondary usually means that one pays up front for services and gets reimbursed upon filling out a form when back home. That’s OK if costs are up to $1000 to have a broken arm set in the Caribbean but NOT OK if one is hospitalized with a heart attack, especially in the United States, where the disbursement of a single pill in a hospital can cost $100 and treatment for a heart attack can cost several hundred thousand dollars!

Same thing for work travel insurance: be sure to understand the coverage. Most work travel insurance coverage has significant limitations. Away in a foreign country and experiencing a problem is not the place to discover that one’s insurance is insufficient.

There are various options available through private companies that offer coverage for trip cancellation alone to full — or Deluxe — packages that have a range of features, including of course, full medical, but also offering flight and accident insurance, baggage loss and delay, just to mention a few. Be sure to talk with a travel agent to get the proper coverage needed: one may have medical coverage already but can opt to purchase trip Interruption and Cancellation separately to top up coverage. Note that separating travel insurance into its individual component parts often results in a higher cost per section. Full coverage packages tend to be more economical.

And travel agents can advise of the proper procedure to initiate a claim.

At-destination-car-insurance is another concern — personally I have found it to be better to look at CDW (Collision Damage Waiver) coverage under my credit card and then either pay the liability insurance at the rental counter or ensure that my present car insurance policy is “transportable” — in other words, my provincial car insurance covers me while I am away. However, keep in mind that, in this case, any accident while away can affect one’s driving record in your own province AND can cause significant time loss to your vacation while the matter is settled. Be sure to discuss this with a travel agent and your present car insurance agent.

Another factor to consider is that in the event of an accident, insurance purchased at the car rental desk allows the traveler to drop the keys off (assuming there is no criminal liability) and be done with it, whereas your personal car insurance from home may require you to lose as much as a day — or more — of your travel time to sort things out.

Finally, keep in mind that though the decision to purchase travel insurance is the individual’s to make, this decision can affect others close to you. If, for example, hospitalization is needed in the US and incurs a bill of $200,000, who is going to pay that bill? Are family members going to have to come up with the money to help out? Sometimes the risk the traveler is prepared to take can have far-reaching consequences for loved ones back home!

When the travel agent offers to discuss travel insurance, take the time to listen. Make an informed decision, not one based on adding $120 – $150—usually less than 10% of the cost of your trip – to the cost of a bargain basement trip, which has just been negotiated

Travel Insurance - Are You at a Risk?

Most of us travel, whether it be for business or for vacation.

While some prefer to take their chances regarding travel insurance, many people, with a variety of credit cards available, think that the travel insurance that is included with a credit card will cover all their insurance needs while away.  They might be surprised to find that they are not….

It is very difficult for anyone to do an in-depth comparison of coverage among the different credit cards, considering that even one bank might offer several categories of credit card, with different insurance coverages for each, and options for coverage constantly changing.

You may recall some time ago, when a volcano erupted in Iceland, it interrupted flights across the Atlantic for weeks. Many travelers made the very costly misinterpretation that they were covered by their credit card insurance, but they were not.
How do you find out if you are covered for what you think you are covered?

Some points to discuss with your credit card company (I suggest getting responses in writing)…

1.  Your tour operator cancels your trip. In most cases, the tour operator will refund you your money, but what about airfare and other related expenses?
2.  Acts of war or local protests. Terrorism may be covered by your policy but acts of war or civil unrest are often excluded.
3.  Pre-existing medical conditions. This applies not only to yourself and traveling companion, but also any close relative, for example. If a medical condition exists prior to travel, you may not be covered.
4.  Baggage delay. Check to see what the delay of time requirement is. If it is 24 hours or longer, and you arrived at 6:00 PM the night before your cruise which departs at 4:00 PM the next day, you may not be covered.
5.  Illness or death of a pet. Pets are increasingly being considered as members of the family. Does your insurance cover for the cancellation of a trip if your pet is very sick or dies?
6.  Loss or damage to keys, money, documents, tickets or credit cards. These are often excluded under insurance policies.
7.  Sports injuries: many hard adventure sports are excluded from coverage — bungee jumping, paragliding, mountain climbing or white water rafting are likely to be excluded.
8.  Pregnancy and childbirth. When vacations are often booked a year or more in advance, a pregnancy can create major problems for a planned vacation. Be sure you understand the tour operators’ rules for travel while pregnant because that is usually not covered under travel insurance.
9.  Self-inflicted injury or psychological illness. Coverage for these problems is often excluded.
10. Divorce. If one of you files for divorce from the other, that is usually excluded from coverage.
11. If you do not leave an appropriate amount of time between connections, a weather delay that breaks the connection may not be covered.

Check with your travel agent to see if the insurance that is offered covers these situations – often, booking through a travel agent who represents a full-fledged travel insurance company, you may find that coverage is available.

*Guest Out-of-Province Insurance