Travel insurance companies are coming to the realization that their customers don’t know much about travel insurance, if they know anything at all. And they’re quietly setting out to change that.
How much don’t travelers know? Consider what happened to Harry White. Before he left for a trip to Denmark, he decided to skip purchasing health insurance because he’d heard that healthcare is free in Europe.
“So, I thought, why bother getting medical coverage, right?” says White, who runs a sports website. “Well, that turned out to be a colossal blunder.”
While he was in Europe, he fell ill and was “shell shocked” to discover he had to pay more than $500 for medication.
“Why?” he asks. “Because the Danish government doesn’t extend its free healthcare to folks from outside the EU. That was a tough pill to swallow — pun intended.”
What you don’t know about travel insurance can ruin your next trip. That’s why travel insurance companies have doubled down on consumer education in the last few years. And as it turns out, there are a few things you need to know about travel insurance before you start planning your trip — and there’s a lot of great buying advice for someone who is thinking of traveling this summer or any time.
Travel insurance companies are investing in consumer education
One of the companies leading that effort is AIG Travel. Since the pandemic, the company has made what it calls a “significant shift” toward educating customers.
AIG launched an education center for its Travel Guard customers that helps them navigate the confusing aspects of travel insurance, such as how travel insurance works, when to buy a policy, and how much one costs.
The company also published resources for customers specific to their type of trip. A destination section on its site provides information not only about each destination but also about what plans and coverages travelers might want to consider for that location. And a trip type section gives details on the best type of insurance based on a customer’s specific trip, from skiing to cruising.
“We’ve taken a very forward approach to make sure that information is there and that our customers have that information before they travel,” AIG Travel CEO Jeff Rutledge noted in a video announcing the project.
New content and redesigned websites for travel insurance customers
Other insurance companies have also built up their consumer education content recently. The Allianz Travel Insurance website has added new articles and tips to help consumers better understand what travel insurance covers.
“Our series on Travel Insurance 101 explains the ins and outs of shopping for travel insurance, and our destination guides offer checklists for the most popular places,” says Daniel Durazo, director of external communications at Allianz.
Berkshire Hathaway Travel Protection (BHTP) recently redesigned its website, bhtp.com, to make it easier to find, quote and purchase a plan that best fits a traveler’s type of vacation. You can now look for a policy based on your travel mode, trip cost, and family presence.
“The site uses proprietary quote logic to serve up no more than three BHTP plan options,” says Carol Mueller, vice president of BHTP. “That helps eliminate coverage overload and confusion, while also making a suggestion on a top recommended plan. It simplifies the buying decision experience.”
Travel insurance sites have assigned a high priority to consumer education, too. Stan Sandberg, the co-founder of travel insurance site TravelInsurance.com, says educating travelers on travel insurance is one of his site’s highest priorities.
“To that end, TravelInsurance.com is constantly publishing information that explains how travel insurance works and highlights the range of benefits,” he says. The site itself is also designed for the easy search and comparison of a wide range of plans and presented in a way that allows you to quickly click into a plan’s detailed description of benefits.
What do travelers need to know about travel insurance before they buy?
Here are the essential questions you need to answer before buying a policy, according to experts:
Where are you going?
Before you start comparing travel insurance plans, you need to know your destination. Bear in mind that insurance can’t cover you in some destinations. Also, your U.S. health insurance may not work while you’re abroad. For example, Medicare does not usually provide coverage outside the United States – with some narrow exceptions.
“Review your medical insurance plan before your next trip and confirm what may or may not be covered at your destination,” says Amit Arwindekar, medical director for UnitedHealthcare Global. “If you have questions about your plan or coverage, call the number on the back of your insurance card.”
What are your travel dates?
You’ll need to know your exact departure and return dates. This can be especially tricky if you’re taking a cruise. Risk-averse travelers often build in a night or two in a hotel before sailing, to give them a cushion in case of flight delays. And if that hotel expense is nonrefundable, you want to be sure it’s covered.
“Many insurance companies have a certain time limit in place— if you are within X days from the start date of your trip, you can no longer buy an insurance policy with them,” explains Claire Riley, a travel advisor with Duende Travels. “Those restrictions tightened up a bit during the peak of COVID and have started to relax a bit at many companies in the last year. Either way, it’s something clients and advisors have to be aware of that is changing often.”
How much does your trip cost?
It’s pretty simple: The cost of your trip consists of all prepaid, nonrefundable expenses — for example, hotel rooms, train or plane tickets, cruise line tickets, excursion deposits, car rentals, and other transportation expenses.
“Expenses like nonrefundable flight tickets, hotels subject to cancellation penalties, and prepaid tours or excursions are all insurable trip costs,” explains Terry Boynton, president of Yonder Travel Insurance.
What’s your date of birth?
Now that’s an easy one. Insurance companies use your age to determine the price of your policy, so it’s important to have this information. Important: You also need to know the birthdays of everyone in your party.
Pro tips for being an educated travel insurance consumer
Consumer education doesn’t end there, of course. I asked experts for their best strategies for becoming a more educated traveler.
“Travel insurance can provide peace of mind and financial protection in case of unexpected events,” explains Pallavi Sadekar, head of operations at VisitorGuard.com.
Know what you need
Make sure you have an idea of what you want insurance to cover before you start your purchase. What type of vacation are you taking? What can’t you afford to lose? What can you lose?
“It’s essential to conduct an assessment of your priorities and primary concerns,” says Ernesto Hernandez, an inside sales manager for AXA Partners US. “This assessment serves to educate the traveler about the most suitable travel insurance plan and benefits that align with their unique trip requirements.”
Make sure you know what trip cancellation reasons are covered in your policy
Your travel insurance provider of choice should be able to readily supply you with a list of covered cancellation reasons so you know when you can expect to receive reimbursement for up to 100 percent of your nonrefundable trip costs.
“Examples of covered reasons for trip cancellation can include the death of a family member or travel companion — God forbid — natural disasters, pregnancy complications and more,” says Lauren Gumport, a spokeswoman atFaye Travel Insurance.
Prioritize your coverage and conduct your own research
Travel insurance pros leave nothing to chance. They do their homework, and they prioritize their insurance needs, says Christina Tunnah, General Manager of marketing and brands at World Nomads.
“That might be trip cancellation or coverage for sudden illness, including Covid,” she says. “It might be the amount of emergency medical and evacuation coverage or even the activities they’ll be covered for, which is especially important for our more adventurous travelers.”
As you educate yourself on travel insurance, look for insurance companies that offer a rich Frequently Asked Questions (FAQ) section and full policy wording that you can download. Study the text, and make sure it aligns with your insurance needs.
Be aware of the limits
Travel insurance doesn’t cover everything. For example, you can’t cancel your trip for any reason with most “named perils” policies (you need a more expensive “cancel for any reason” policy for that).
“If a known event – such as a hurricane or tropical storm that has been named or an airport strike that has been publicized, for example – causes your travel plans to change, that event would not be a covered reason for cancellation, delay, or interruption,” explains Bailey Foster, vice president of trip insurance at Trawick International. “That is why getting a plan with cancel for any reason or interruption for any reason is a good idea any time of year, but especially during the busy summer travel season.”
Trawick’s policies offer up to 75 percent reimbursement if your trip is canceled for any reason at all up to 48 hours before you are due to depart, even if it is not a covered reason on the plan you purchased.
And there are restrictions on medical care, too.
“Trip insurance almost never includes field rescue from the point of injury or illness,” notes Dan Richards, CEO of The Global Rescue Companies. “In the event of a medical emergency, you would have to get yourself to the hospital first before traditional insurance services kick in.”
There are ways around the insurance limits. Global Rescue and Medjet, both medical evacuation companies, can supplement insurance so that you don’t have to pay anything extra in the event of a serious accident. That’s an essential part of consumer education, say pros.
“Educating people as to exact processes and benefits, and how Medjet works on top of travel or health insurance to get them home, is important,” says Mike Hallman, CEO of Medjet.
Remember, you have a “free look”
Most travel insurance policies are refundable to a certain point. It’s called a “free look” period.
“It can last between 10 and 15 days, and it enables you to review your plan and cancel it without being penalized,” says Beth Godlin, president of Aon Affinity Travel Practice. “Take advantage of this window to read your policy carefully and assess its benefits. Do you have an appropriate level of protection based on your destination and itinerary? No matter how simple or complex the travel benefits package is, there are details and nuances in coverage you should understand to make sure you have the coverage you expect.”
Nothing is set in stone
Don’t forget, you can change your mind once you’ve purchased a policy.
“We know things change,” says Angela Borden, a product strategist at Seven Corners. “Don’t feel like you need to have all your travel arrangements made before purchasing travel insurance.”
For example, you might add an excursion or extend your trip and have additional costs. When that happens, contact the travel insurance provider as soon as possible to ensure those additional expenses are covered.
Bottom line: When it comes to travel insurance, you need to be an educated consumer this summer more than ever. The world is a dangerous place, and more people are taking international trips than at any time since the pandemic.
You don’t want to end up overseas with an astronomical medical bill — or worse.
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