From its name, it is easy to assume that this covers any type of cancelation. However, this is not the case. Trip cancellation coverage provides coverage for “covered reasons”. Each policy varies but common covered reasons are:
- Accidental injury, sickness, or death of you, a traveling companion or a family member
- Bankruptcy and/or default of your travel supplier
- Employment and union strikes that cause a complete cessation of travel services of your carrier
- Legal obligations like jury service or a legal case you are a participant in
- Mandatory evacuation ordered by local authorities at your destination due to natural disasters (tornadoes, hurricanes etc)
- Terrorist attacks that occur in your destination city or the city you are traveling to
- Weather events that cause cancellations in travel plans or a cessation of service
- You or anyone in the travel group is terminated, or laid off from employment
If you have a covered reason this coverage will reimburse travelers for their insured pre-paid and non-refundable trip costs.
Valid documentation is required for many of the covered reasons, so keep records.
Cancel For Any Reason (CFAR)
Different from trip cancellation, these coverages do not have a covered reason clause. In other words, you can “cancel for any reason.” This coverage is becoming extremely popular given COVID.
Cancel for any reason is typically an add-on feature to most travel insurance policies. Cancel for any reason coverage provides travelers a refund of approximately 50-75% of the insured non-refundable and pre-paid trip costs.
And, cancel for any reason must be purchased within 14 to 21 days of booking the trip.
How To Pick Travel Insurance Policies – For Any Reason Policy
You will need to compare all quotes line by line. Some of the things to compare are:
- What is the per-person coverage limit?
- Is there a penalty or coverage percentage – will the policy pay 50%, 75%, or 100% of expenses
- How much time do you have to cancel and make a claim – is there a deadline
Note: When you are shopping for quotes the verbiage often reads “trip cancellation” a very common coverage. Do not make the mistake of assuming this is “Cancel For Any Reason” – it is not. You have to click through and read if the policies “trip cancealltion” covers cancel for any reasons. Or, in some cases read the exclusions.
A way to make this easier is to filter your search results to “Cancel For Any Reason,” however, you will still need to read what is covered.
Trip Interruption Coverage
Commonly included in almost all travel insurance policies, trip interruption coverage reimburses travelers that must unexpectedly cut their trip short and return home or if a portion of a trip is missed. It is a post-departure coverage that only applies once you have started your trip. Even the cheapest and most basic travel insurance policy will include trip interruption coverage. It pays prepaid and non-refundable trip costs for specific covered reasons.
Each policy varies. Here are common covered reasons:
- A non-traveling family member becoming sick or passing away.
- Accidental injury, sickness, of you, a traveling companion or a family member
- Mandatory evacuation ordered by local authorities at your destination due to natural disasters (tornadoes, hurricanes, etc.)
- Terrorism attacks or threats of terrorism
- Weather events that force you to change your plans or return
- Most natural disasters
Trip Interruption typically covers 100% and 200% of the total trip cost, but some trip interruption policies only provide coverage for a return flight home.
To ensure that you can claim all expenses, you need to inform all your travel suppliers within 72 hours of finding out your trip will be interrupted.
No matter where you travel, there is a risk of an accident happening, causing you injury or illness. When traveling in your home country, your existing medical coverage is sufficient.
If you are traveling outside of the country, it’s unlikely your existing policy will cover you. As such, if you are traveling internationally, you need emergency medical coverage.
Emergency medical typically provides coverage for:
- Illness, injury, or infection that could lead to significant health complications
- Ambulance service
- Treatment by doctors and nurses
- Most hospital costs such as surgery, medical tests, anesthesia, and prescription drugs
- Some policies cover sudden dental emergencies such as a lost filling or broken tooth.
Emergency Medical Exceptions
Almost all medical insurance policies travel or otherwise have exceptions know as exclusions. Here are some common exclusions for emergency medical:
- Injury or illness caused by a pre-existing condition or a suicide attempt
- Injuries related to drug or alcohol use
- Sporting injuries or injuries unless you purchased a policy that covers sporting activity.
- Complications due to pregnancy if not specially covered
Some policies offer a pre-existing condition exclusion waiver. They are not cheap. In fact, choosing this almost doubles the cost of coverage. However, if you have a condition, you would be wise to buy this just in case.
Note: Some counties require that you have emergency medical coverage insurance. To determine which counties, go to the U.S. DEPARTMENT of STATE — BUREAU of CONSULAR AFFAIRS. Search for the country you are visiting then scroll to the “Health” section. This will tell you if you must have medical coverage.
Medical Evacuation (Medevac)
As the name might suggest, medical evacuation coverage generally covers the cost of transportation to the closest medical facility. Typically, trip insurance providers determine the type of evacuation transport based on your location and medical condition. Some policies provide medically equipped transport home if you need long-term care.
The key to understanding medical evacuation only covers transportation costs: Care costs within transit like oxygen or blood. In other words, medical evacuation covers the cost of transporting you and caring for you on route to getting you to care. In some cases, a medical evacuation policy will also cover the cost of evacuating others with you.
And, each plan has a limit on what they will pay. This is important to understand. For example, if you plan to climb Mount Everest and require evacuation, it will be ridiculously expensive and could be above and beyond your policy limits.
Accidental Death & Dismemberment (AD&D)
Sometimes referred to as life insurance, accidental death and dismemberment provide a lump-sum payment up the policy limit in the event of loss of life or limb (or any body part) during a trip. Accidental death and dismemberment isn’t a basic coverage. You have to pick a package with it included or added the coverage.
For the coverage to be applicable, the accident must occur within a certain number of days, and the accident must happen during your trip.
The amount paid is based on the policy limit. For death, most policies will pay 100% of the benefit. For dismemberment, most pay 50% of the policy limit.
Note: Accidental Death & Dismemberment does not include medical evacuation costs.
Baggage and Personal Items Loss
There are three parts to baggage coverage:
- The baggage itself – what your bags cost
- The contents of the baggage – the cost of items inside the bags
- The delay of the baggage
Almost all airlines cover a portion of all three, but it’s limited, not even close to actual expenses, and is compensated on a case-by-case basis. This is the most important reason why you need to consider baggage and personal items insurance.
Ugh, yet another reason how to pick travel insurance is complicated.
Baggage delay coverage pays a predefined amount if the luggage is delayed by an airline. The funds are dispersed to give you funds to buy clothing and necessities until the delayed luggage arrives.
Baggage loss coverage pays a predefined amount if the luggage is lost by an airline. It covers the cost of baggage and contents. However, most baggage policies cover small amounts like $750 or $1,000, which may or may not be enough. Be sure to check the limit and determine if it is enough. If not, raise the limit to ensure you are covered.
Think of this as the equivalent of airbound accidental death & dismemberment. These two coverages are almost the same with one exception. Flight accident only pays out if the “peril” or cause of the loss is the direct result of a flight accident.
The only other benefit to this coverage is that if you survive a plane accident, some medical coverage is available if yours does not cover you or on international soil.
Special Coverages – Adventure Sports & Activities
Most policies do not cover emergency medical assistance, medical treatment, and medical evacuation/repatriation if you are seriously injured or in an accident while participating in certain activities or non-professional sport overseas.
One company that does provide coverage for adventure sports and activities is World Nomads. They offer two types of coverage for Americans:
- Standard Plan Sports & Activities as listed for U.S residents
- Standard & Explorer Plan Sports & Activities as listed for U.S residents
To get a quote for Adventure Sports & Activities enter your trip details here then compare the two types of coverage: