Even though I travel regularly, I have to admit that I’ve rarely given travel insurance much thought. I have a policy that’s good for a period of one year, and I also have coverage through my credit card. I used to feel pretty confident with that. I’m in good health, and I tended to look at insurance as a backup plan for the worst-case scenario. But that was before COVID-19.
While planning a trip to Paris, I casually asked a friend in the insurance industry if there was anything extra I should look into. For instance, was there a policy that would cover the cost of a hotel should I be forced to quarantine? She just laughed. No, no one would sell a policy that covered a forced stay in a luxury hotel. It was then that I realized that I needed a bit of a refresher on travel insurance and travel medical insurance.
While my Parisian vacation is now on hold, I’m glad to have learned these travel insurance lessons before hitting the road again.
Credit Card Insurance Is Great -- But Only If You Use Your Credit Card
Laugh at me if you want, but I had no idea that credit card-based travel insurance was only valid if you used said credit card to book your trip. In other words, if you don’t use your credit card to pay for your trip, you usually can’t use it to get compensation if something bad happens. Or if you book your car rental using one credit card, you don’t get to use the benefits of car rental insurance that come with your other credit card.
Before, I just assumed that, since I paid a fee for my credit card, I had de facto paid for an insurance policy as well. But that’s not how it works. If you use a variety of credit cards to take advantage of points offers, or if someone else is paying for your trip, consider buying a stand-alone travel policy. You don’t want to travel with false confidence.
Credit Card Insurance Is Great -- But Only If You Remember To Use It
Most people think of travel insurance as a backup for when things go really, really off the rails. And, in some ways, it is. Therefore, when little bumps come up along the way, we usually write them off as a bad travel day and never consider that travel insurance could help us.
But a lot of travelers forget about the built-in trip-interruption or trip-delay insurance that comes with most credit cards. This insurance goes into effect when your trip is delayed -- and for some policies, a delay is defined as just a few hours. The insurance will reimburse you for some of the expenses associated with the delay, including toiletries and meals. Other cards include lost-luggage insurance, which can provide valuable coverage if your bags are delayed (and can help make up for your airline’s paltry offerings).
In a difficult and disorganized situation -- whether it’s due to a pandemic or simply a huge winter storm during the holidays -- it’s comforting to know that you have a bit of backup when you’re forced to spend $20 for contact lens solution at an airport gift shop.
An easy way to keep track of what is and isn’t covered by your particular card is to take a photo of your policy and keep it on your phone. If you’re entitled to some reimbursements, take them.
Cancel For Any Reason Insurance Isn’t So Comprehensive
Cancel For Any Reason (CFAR) insurance is often presented as a surefire, completely comprehensive form of insurance that protects you from every single eventuality. With CFAR insurance, you can cancel your trip -- for any reason -- up to as little as 48 hours before departure.
However, it’s important to note that many policies only cover between 50 percent and 75 percent of the trip costs. This might well be worth it if you’re investing in very expensive airfare and heading to a destination where there are concerns about civil unrest. It might not be worth it if you’re planning a trip to the coast for a week of rest and relaxation during flu season. These policies are very expensive, and you’ll have to consider whether you’d rather have increased peace of mind or be able to save more money for future trips and expenses.
Some airlines offer passengers the choice between “firm,” “flexible,” and “freedom” plans, sometimes called bronze, silver, and gold plans. As you might imagine, a firm booking means you’ll get zero reimbursement should you cancel or reschedule your flight. Those with a flexible booking have a bit of leeway and can usually reschedule for a modest fee. And those who paid for a freedom booking can switch things up without penalty.
Some airlines offer branded credit cards that give passengers the benefits of a flexible- or freedom-level flight when passengers use the credit card to make a firm booking. I’m going to look into this option myself going forward.
Policies Are Easily Misunderstood -- And Can Change With The Times
In early February, before COVID-19 was a widespread global concern, MedjetAssist and MedjetHorizon suspended their evacuation services in China, Hong Kong, Taiwan, and Macau. Many long-term travelers responded to this announcement with confusion and disbelief. What was the point of purchasing emergency evacuation coverage with fine print and restrictions?
But the reality of the situation is that insurance rarely covers known events. And a medical evacuation team simply can’t fly you home when all flights are in lockdown. That doesn’t mean that a policy like this isn’t valuable in other circumstances, but it does mean that travelers should ask their agents how any products they purchase would serve them (or not) in an event like COVID-19.
I would never have believed I’d have anything to appreciate about COVID-19, but it has certainly made me a more informed consumer. I’ve learned to critically examine all of the services I use.
Policy Price Limits Aren’t What You Think
The payment limit for hospitalization is the part of an insurance policy that every traveler skims over with glazed eyes. But if you’re paying attention, you might notice that your policy includes a $100,000 or $200,000 cap on hospitalization payments.
Those figures don’t exactly mean too much unless you happen to work in hospital accounting. However, what every traveler needs to know is that hospital costs can skyrocket in a matter of days. It’s not just people who need emergency open-heart surgery who face huge costs. Being hospitalized in a foreign country might very well be the most expensive thing you’ve ever faced.
If your insurance policy has the option of upgrading to a similar package with a higher limit on hospitalization payments, take it. You’ll pay just a little more to get more significant protection and peace of mind.
Preexisting Conditions May Be Covered
I’ve heard from so many people during the COVID-19 health crisis that they didn’t have travel insurance -- simply because they assumed they wouldn’t get coverage because of a preexisting medical condition. Thankfully, they’re all safe and healthy, but it is worrying to imagine how many people could get into serious health or financial difficulties because of this.
Many insurance companies now cover preexisting conditions, either fully or with some conditions and restrictions. Working with an insurance agent, as opposed to a single company, is an extremely cost-effective way to find a comprehensive policy.
You’ll Want To Plan For Comfort
If there’s one lesson that has come up, again and again, during the COVID-19 public health crisis, it’s that family matters. While it isn’t always safe to have family right by your side when you’re sick, knowing that a family member is nearby to offer practical assistance and advocate for you can be hugely comforting. However, the act of bringing them to your side can be outrageously expensive.
Many insurance policies include a clause that will cover the cost of bringing a loved one to your side should you fall seriously ill overseas. But this is often only included with silver or gold packages, and it’s rarely included in basic policies. It’s one thing I’ll definitely be looking for in my next purchase.
Many Healthcare Expenses Aren’t Covered
Hearing from friends who are stranded in different countries around the world has shown me just how much money you can spend on healthcare before your insurance kicks in. Virtually all products that will make you feel better -- from ice packs to pain medication to cough syrup -- will be out-of-pocket costs. So will all low-cost medical appointments. Even a clinic visit that costs several hundred dollars won’t meet the average deductible.
That’s why it’s a good idea to stash a little extra money, like 10 percent of the total cost of your trip, into an emergency fund. Whether you need to take multiple pricey taxis to and from a clinic or are forced to buy a lot of comfort items, you’ll have some cash to cushion the flow.
Like many people living through this severe public health crisis, I’m experiencing fear and anxiety. I’m worried both for the short term -- about the health and wellbeing of my neighbors -- as well as the long term, when I consider how many businesses will face serious challenges to rebuild.
But I’m curiously feeling calm when I consider future travel. Improving my insurance knowledge has motivated me to read the fine print before each and every trip. Let’s hope it’s not too long before we’re all starting to plan our next adventure!