If you have ever considered travel insurance in the past, the COVID pandemic has probably solidified your decision to buy it in the future. While airlines, hotel chains, and other travel companies have been gracious with refunds and credits during these unprecedented times, it will likely revert to the ‘no refund’ way of life, as it had been before. Jetsetters are seeing more and more value in protecting their vacation, but we that you are vigilant in your policy search and ask, “what does trip insurance cover?”
Read the fine print
Many travel insurance policies contain exclusions. It is important to remember why you are purchasing the policy as you read the fine print. Here are some common exclusions found on most travel insurance policies:
- Changing your mind / not able to afford the trip. If you get cold feet or experience a financial downfall before your trip that initiates the need to cancel, your policy will likely not reimburse you for the investment you have made to reserve the trip.
- Bad weather predictions. Many standard policies will not allow you to cancel a trip based on the weather. Keep in mind this common exclusion, especially if you plan to travel during a rainy season.
- Pre-existing medical condition (including psychiatric disorders). If you have a chronic medical condition that may affect your travel, do not rely on your insurance for a refund if you must cancel for that reason. Many policies do not reimburse losses due to a pre-existing medical condition, including anxiety or panic disorders causing fear of travel.
- Award travel reimbursement. As a frequent flier, you may use miles to book a trip. If you need to cancel a booking made with credits or rewards, you likely will not be protected with a standard travel insurance policy.
- Planned travel against government travel warnings. If the State Department has deemed a destination unsafe, it is for a reason. Because of these recommendations, many travel policies will exclude reimbursements requested for canceled trips booked while containing a Travel Advisory.
What does travel insurance cover?
All insurance policies list exclusions, but you are probably wondering what some reasons are you can cancel with travel insurance. Here’s a list of the common reasons travel insurance provides coverage for a canceled trip:
- Unexpected illness or injury of you or a family member. If you, a traveling companion, or a family member unexpectedly falls seriously ill or dies, this is often a reason to receive reimbursement for canceling your trip.
- Terroristic event. If within 30 days of your scheduled departure date there are mass protests, dangerous travel conditions, or terroristic conditions, you will likely receive a refund if you opt to cancel your trip.
- Unexpected natural disasters. While typical ‘bad’ weather is often excluded as a covered reason, natural disasters are a different story. If a natural disaster leaves your destination uninhabitable, you will commonly find yourself being compensated for the canceled trip.
- The birth of a family member. If a family member or companion is birthing a child and you are present, you can often be reimbursed for your lost vacation plans.
- Legal separation or divorce. If a legal separation or divorce occurs after you buy your insurance policy, you may receive a refund for any travel plans you have made.
Consider a cancel for any reason policy
Cancel for any reason (CFAR) is an add-on that you can purchase when buying your trip insurance. It does have a fee associated, but it allows you to cancel for any reason (if you are following the specific purchase/cancellation stipulations listed on the policy.) For example, often you must buy CFAR coverage within a certain timeframe of the original trip booking and insurance policy purchase – commonly 14-21 days. Also, travelers who decide to cancel their trip typically must do so within 48-72 hours before their scheduled departure. And while CFAR does not usually cover 100% of the trip cost, they traditionally cover up to 75%.
Planning a vacation is stressful enough, trying to do it during a pandemic has made it more difficult. If you are looking to plan a trip this year, be sure to check out our article “Vacationing During the COVID Pandemic: Expert Tips for Families Looking to Plan a Safe Getaway” for some great vacation suggestions.
Always consult your insurance agent
Like any insurance policy, it is important you are well-educated on the terms and details of your coverage. At The Seltzer Group, our team of experienced agents is specially trained to read the language, limits, and definitions of every policy, and we will be happy to guide you to make the best purchase for your situation.
To read some more tips for purchasing Travel Insurance, check out this article from our friends at Cincinnati Insurance, “Travel insurance: Secret weapon of savvy travelers”.