Thursday, March 3, 2011

Purchasing Travel Insurance - Timing is Everything

Travel insurance is an important benefit anyone who travels should consider when booking a vacation. Did you know that coverage can differ for the same policy depending on when you purchase insurance?

Many people have the misconception that insurance is only for old people or those in poor health. That couldn't be further from the truth. Insurance should be considered for anyone who can't afford to lose the full price they paid for their trip if they cannot travel. If you are one of the few that can afford to lose all you have paid for your vacation - you don't need to read any further.

We had clients who had a car accident on the way to the airport for their vacation. Travel insurance reimbursed them for all of the trip. We've had clients who have injured themselves while on their trip in the Caribbean and were hospitalized. Travel insurance reimbursed them up to the coverage they purchased for whatever their own health insurance didn't cover (their insurance did not have any coverage for hospitalization outside the U.S.). We've had clients reimbursed for their costs to get to their cruise when their flights were canceled due to snowstorms and they had to meet the ship at their first port once flights began again. And we've had clients who were reimbursed for their trip when a serious illness prevented them from traveling after they made their final payments.

Most insurance will cover your cancellation fees if you have to cancel your trip prior to leaving for a covered medical reason. Some policies offer "Cancel For Any Reason" coverage where you will receive your cancellation fees back in part or in full if you cancel for a non-covered medical reason. (Some will give you back a future travel credit for the penalty amounts, not cash).

WHEN you buy insurance is also important. If you have a pre-existing medical condition, you must purchase insurance at the time you make a deposit if you are using suppliers insurance, or within a certain time frame (usually within 14 days of making your deposit) if you are using a third party insurance company. If you are considering purchasing insurance because you have an elderly immediately family member, or an immediate family member who may have a pre-existing illness, and want to be able to cancel your trip if their condition worsens after your final payment - you must also purchase insurance at the time of booking. Most insurance companies that offer coverage for cancellation due to the illness or death of an immediate family member may consider the family members condition pre-existing as well and require the policy be purchased at the time of booking the trip.

If you do not opt to purchase insurance at booking or within the third parties guidelines, any new medical condition that comes up after the guideline dates become a pre-existing condition and insurance you purchase at a later date usually will not cover those conditions.

If you are buying a Cancel for Any Reason policy (which is always more expensive), in almost every case you must buy at the time of making your deposit.

Another thing to keep in mind when looking at insurance is where you are traveling to. Nearly all travel insurance policies exclude war and civil war, declared or undeclared. This means that if your trip is delayed or you must cancel it entirely because of war or civil unrest, you insurer will not provide reimbursement. Some Cancel for Any Reason polices may provide some reimbursement, usually not 100%.

Keep this in mind when booking your next trip. Some policies can be purchased up until final payment date, but you won't have coverage for pre-exisiting conditions if you don't purchase at time of booking or within two weeks. If you want Cancel for Any Reason, you need to purchase at the time of booking in nearly all cases. You should ask your agent or the insurance supplier for copies of their policies before purchasing so you understand what is and isn't covered.

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