5 Surprising Things That Aren't Covered by Travel Insurance
Beware of these common misconceptions about policy exclusions.
Make sure you pick a policy that meets your needs.(Getty Images)
If you're planning a trip to a hurricane-prone or Zika-impacted area or you're concerned about terror attacks in your desired destination, you're likely toying with the idea of purchasing travel insurance. After all, with benefits such as trip cancellation coverage and reimbursements for medical emergencies, inclement weather or delayed baggage, insurance can be a silver lining if a trip suddenly goes awry or you need to switch your plans. But while selecting the type of travel insurance coverage you need comes with its own set of challenges, sifting through the fine print to determine policy shortcomings is another task altogether.
"You can't cancel a trip because of the fear of a hurricane or the fear of adverse weather," says John Cook, the founder of QuoteWright.com, a travel insurance comparison site. "Policies don't cover the fear of exposure; they cover the actual exposure," he explains. To help you understand the finer points of coverage exceptions, U.S. News caught up with top experts to identify common circumstances and incidents that aren't typically included in insurance plans, along with a primer on picking a policy that matches your needs.
If a hurricane wreaks havoc on your vacation plans and you're unable to reach your final destination, most policies will pay for your losses. But there's a catch. For cancellation coverage to kick in for any natural disaster, your accommodations would have to be rendered uninhabitable or your air carrier would be unable to reach your final destination, says Rachael Taft, a spokesperson for travel insurance comparison site Squaremouth.com. So, while a tropical storm may threaten to dampen your getaway, if there's no official hurricane or storm named and you decide to change your plans on a whim, you won't be reimbursed.
On the bright side, if you're concerned about weather, you can opt for a cancel-for-any-reason policy, which allows you to recoup about 75 percent of your trip cost if you cancel more than 48 hours in advance of your trip. But keep in mind, these plans "may have a significantly higher upfront cost, often up to 40 percent more, and may not provide full reimbursement in cash," says Beth Godlin, president of Aon Affinity Travel Practice. These policies may not be for everyone since you'd have to purchase one within 10 to 30 days of your initial deposit for your trip depending on the plan you select, making it difficult to pivot at the last minute. "I recommend buying it only if the risk includes exposure that isn’t normally covered by the basic trip cancellation: such as fear of Zika virus exposure, possible loss of a close friend (not a family member), loss of a pet and perils and hazards that are not specifically mentioned as covered events," Cook says. While named peril policies include specific risks that will prompt insurance coverage, such as a hurricane, fire or windstorm, a physical or moral hazard refers to a situation that could increase the likelihood of a financial or physical loss or injury, such as an insured person intentionally participating in an extreme sport to receive coverage.
Fear of a Terror Attack
Many insurers offer coverage for terrorism. But while there are standard policies, they can vary greatly, Taft cautions, stressing the importance of reading the fine print to understand individual stipulations. Some policies mandate that to receive compensation a destination on your itinerary must be within 50 to 150 miles from where a terrorist attack occurred, while others require that the incident must have taken place seven to 30 days prior to your planned departure date and that the U.S. State Department has issued a travel warning cautioning Americans not to visit, she explains. On travel insurance comparison site Squaremouth.com, you can even filter your search to compare different policies for terrorist attacks, which include varying terms and conditions and standards for coverage depending on the provider, she says. Also, remember "an advisory or warning by itself would not be a reason to cancel," Taft says.
High Risk of a Disease Outbreak
The same logic applies to those concerned about Zika and other infectious diseases. While you could be covered for medical expenses if you need to go home early from a Zika-affected area, a Centers for Disease Control and Prevention travel alert is not a commonly covered reason to cancel your trip, she cautions. "You've got to remember these are named peril policies," Cook explains, noting that if you contracted Zika virus or became sick or injured in an impacted area, you could be covered, but policies don't typically allow you to cancel a trip if you're at risk from exposure to disease outbreak. Plus, the plan would need to have been purchased before Zika (or another public health scare) was characterized as a known event or peril.
Pre-Existing Medical Conditions
According to a 2012–2014 Travel Insurance Market Survey from the U.S. Travel Association, policies offering trip cancellation or interruption benefits accounted for more than 85 percent of the travel protection products sold in 2014. But many travelers don't realize the strict terms and conditions associated with policy exclusions for pre-existing medical conditions. Typically, you must have received care or treatment for the condition within 180 days of buying the policy to qualify for the waiver, though there are exemptions such as if you're on a prescribed medication. Other requirements include that you buy your insurance policy within 21 days of putting a deposit on your trip (sometimes earlier), that you're physically fit on the day you buy insurance and that you list the full nonrefundable prepaid value, Cook says. In short: It's important to do your homework to ensure you pick a comprehensive policy and purchase insurance soon after booking your vacation. But if you do fall sick while traveling internationally, you will be covered, though there are some caveats. Cook points out that to recoup money from your trip, you will have to had fallen ill due to contracting a new illness or an accident during your trip, rather than a pre-existing condition (unless, of course, the plan offers a waiver for pre-medical conditions).
Extreme High-Risk or Adventure Sport-Related Accidents
Let's say you're mapping out a thrilling itinerary filled with high-risk activities. You'll want to invest in a plan that covers hazardous pursuits, but keep in mind even these policies do not cover dangerous activities (think: bungee jumping). "We cover everything from abseiling to zorbing, but there are restrictions like how deep you can go diving (30 meters) or how high you can go trekking (6,000 meters)," explains Phil Sylvester, chief content and communications officer of World Nomads, an online travel insurance company. "We cover over 150 adventure sports activities, but some are too risky for us to cover, such as ski joering," he explains, pointing out that the policy doesn't cover any extreme sport "that poses a high degree of danger unless it is listed on the Worldnomads.com site."
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