Consumer Advisory: Consider travel insurance before hitting the holiday road

DENVER — According to the United States Travel Insurance Association, nearly 17 percent of Americans have had their travel plans impacted by illness, natural disaster, carrier-caused issues or severe weather. 
 
Whether you’re visiting relatives for the holidays or escaping winter’s icy grip by visiting a tropical locale, a trip requires planning and can cost a lot of money. You don't want things cut short by injury or illness, and you also don't want to worry about situations beyond your control, like a delayed flight causing you to miss out on presents and egg nog. If you are planning to travel for the holidays, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies, suggests you consider the ins and outs of travel insurance to see if it's right for you by taking five minutes to get wise about travel insurance.
 
Do you expect a bumpy road on your travels?  If so, ask yourself these questions:
  • What are the chances I will be impacted by severe weather or missing baggage?
  • How willing am I to take risks with my travel?
  • How much am I willing to pay for a back-up plan?
  • How will my health insurance work in another state or another country?
If you cannot afford to cancel and rebook your trip or your health insurance doesn't cover you abroad, travel insurance may be for you. You typically don't need travel insurance for short trips close to home.
 
Travel insurance usually costs between 4-to-10 percent of a trip's cost. For a trip totaling $5,000, travel insurance could range from $200 to $500 depending on the coverage. Also consider your destination. A traveler hiking in Kenya will have vastly different risks than someone taking in the sights of New York City.
 
Typically, travel insurance is purchased through a travel agent, an airline or through the company selling the trip or vacation package, such as Travelocity or Expedia.  
 
Types of Travel Insurance
 
There are four main categories of travel insurance:
  • Travel cancellation - Reimburses pre-paid travel expenses if you are prevented from taking your trip because you become ill or die.
  • Travel medical - Reimburses medical and emergency dental expenses that you incur because of an illness or injury while you're traveling.
  • Emergency medical evacuation/Repatriation - Provides emergency transportation to either a hospital in the geographic region where you are and/or transportation back to a hospital near your home.
  • Accidental death/Flight accident - Accidental death covers death or dismemberment at any time during a trip while air flight accident covers death or dismemberment during flight only.
Travel Cancellation Coverage
Basic trip cancellation coverage is typically included in every comprehensive policy. This means you'll be covered if your trip is canceled for specific, covered reasons, such as the following.
  • Unexpected illness or injury of you or a traveling companion that deems you unfit to travel, by order of physician
  • Hospitalization or death of non-traveling family member
  • Weather or common carrier issue
  • Unforeseen natural disaster at home or the destination
  • A legal obligation such as being called for jury duty or serving as a witness in court
Check your policy carefully to understand exactly what is covered if you need to cancel your trip. Also pay attention to coverage limitations and exclusions. You might not be covered if you cancel your trip because you were detained by customs or due to a work obligation.
 
Travel Medical and Major Medical Insurance
You should contact your current health insurance provider to find out if your policy will cover you where you are traveling. Some policies might cover you if you are in the U.S. or Canada, but not Europe. Other major health plans do provide coverage overseas so it's worth checking before purchasing additional coverage.
 
Travel medical and major medical insurance policies provide protection if you become ill or injured while traveling. Travel medical insurance provides short-term medical coverage lasting anywhere from five days up to one year, depending on the policy. Major medical insurance is for longer trips, lasting six months up to a year or longer.
 
These plans help you cover medical expenses and find doctors, hospitals and even foreign-language services if you become ill or injured while traveling abroad. Find out if your policy requires you to obtain prior approval before seeking medical care. Know that travel insurance often will not pay claims for illness or injuries due to pre-existing conditions, so it is worth checking when you buy the coverage.  Also check with your current health insurance company to see what kind of coverage might already be in place.  
 
Emergency Medical Evacuation Insurance/Repatriation Insurance
Emergency evacuation insurance provides coverage for services such as air evacuation and medical transportation to the nearest adequate medical facility then home if warranted. This type of coverage is useful if you're traveling to a rural area without easy access to medical facilities.
 
Repatriation coverage means the travel insurance company will arrange and handle the transportation to return a covered person's body home or to a funeral facility.
 
Keep in mind that this coverage may not cover you if you're participating in an activity your insurer considers dangerous such as scuba diving or sky-diving, so if you plan to engage in these activities, look into specialized coverage. Ask about coverage limitations or exclusions before you commit to buying an insurance product.
 
Accidental Death/Flight Accident Insurance
This type of insurance provides coverage for any injury or death sustained while boarding, riding, exiting from, being struck or run down by an aircraft. These policies cover the death of the insured traveler, the severance of a limb or irretrievable loss of eyesight, speech or hearing. Note, this coverage does not usually apply to accidents inside your home country or the transportation of a body back to the home country, so check your policy carefully.
 
What are other sticky travel situations to consider?
Travel insurance is intended to protect travelers against sudden and unforeseen events, but timing can make a difference.  When you purchase the travel insurance is key.  For example, if you purchase travel insurance when you book a trip, and then a blizzard upsets your plans, your insurance should cover that unforeseen event.  But if the national weather service is tracking a blizzard (or a hurricane or tropical storm), and then you buy travel insurance, claims related to that weather event will not be covered.
 
If your flight is delayed, you may or may not be covered. Some policies only cover a trip cancellation claim if you lose more than 50 percent of your scheduled trip length due to a covered delay. You also must make a good faith effort to continue your travels using alternative means.
 
Most homeowners insurance policies cover personal property lost or stolen during a trip. Check with your home insurer to see what they cover while you are traveling. If you have expensive items, you might want to purchase a floater to add to your current homeowners policy to cover those items.
 
More Information
When searching for travel insurance, contact the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), to learn more about the company and the person selling you the policy as well as to ensure they are licensed to sell insurance.  The DOI is a consumer resource where insurance experts can answer your insurance questions and provide easy-to-understand information. Call 303.894.7490 or 1.800.930.3745 (outside the Denver metro area) or visit askDORA.colorado.gov.   
 
Find more information about travel insurance at the DOI Travel Insurance web page.
 
Take 5 to Get Wise by checking out all of DORA's helpful holiday-related consumer advisories
 
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About DORA
The Department of Regulatory Agencies (DORA) is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit www.dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675