FAQ About Travel Insurance
by Edward Hasbrouck, author of “The Practical Nomad”
Types of travel insurance
Travel insurance policies provide at least six types of coverage,
intended for different types of travellers and trips:
- Comprehensive travel medical insurance is for people
who don’t have any other medical insurance, even at home. Since most
people who can afford it have health care coverage in their home
country, often through their employer, comprehensive travel medical
insurance is mainly of interest to long-term travellers who’ve left their
jobs and lost their insurance coverage at home, or to those living and
working outside their country of citizenship or permanent residence.
- Emergency travel medical insurance is for people
who have medical coverage at home, but whose health plan at home
doesn’t cover them while they are travelling. Emergency travel medical
insurance only covers emergency services abroad; once you get home,
you’re on your own (or presumably, back under your regular home coverage)
for any necessary follow-up treatment or continuing care. Most health
insurance plans and health maintenance organizations in the USA
include their own provisions for emergency care while abroad, at least
for trips of less than 30 days. Check with your current insurer or HMO
before you waste money on an emergency travel medical plan that duplicates
your existing coverage.
- Medical evacuation (medevac) insurance covers the
cost of an air ambulance, attending physician and nurse, etc. if you
are so badly injured, or become so ill, that you can’t come home
(or get to a suitable medical facility) on a scheduled commercial
passenger flight. Medical evacuations can cost tens of thousands
of dollars, but are rarely necessary. Even very badly injured
travellers usually can come home on regular flights after no more
than a couple of weeks of emergency treatment and stabilization
abroad. Some of the activities most likely to lead to a need
for medical evacuation, such as scuba diving and extreme sports,
are often excluded from medevac coverage. Read the fine print.
- Trip cancellation and interruption insurance
covers the cancellation or refund penalties and the cost of
getting home if you have to cancel your trip, or cut it short,
for specified reasons. The covered reasons vary (read the fine print),
but typically include injury or illness to you, a travelling
companion, or a member of your immediate family. War and terrorism
may or may not be included, or may be covered only at additional charge.
- Supplier default insurance covers any money
you lose because of the bankruptcy of an airline, cruise line,
tour operator, or other provider of travel services. Supplier default
coverage has been drastically cut back since 11 September 2001. Some
travel insurance companies no longer offer it at all, while others
pick and choose which travel suppliers they will insure. Read the fine print.
- Rental car insurance covers damage or theft
to a vehicle you rent (usually referred to as “collision” insurance)
and/or liability to other people or vehicles you injure or damage.
Many credit cards include rental car collision insurance, but not
liability insurance. If you own a vehicle, your insurance may or may
not provide liability coverage when you are driving a rented vehicle.
Read the fine print. Your liability if someone is killed or injured
in an accident can be much greater than the value of the vehicle.
If liability insurance isn’t available as part of a “travel insurance”
package, see if you can add a third-party liability or “umbrella” rider
to your homeowner’s or renter’s insurance.
Sources of travel insurance
Where do you find this sort of insurance?
Some travel agencies and travel suppliers offer travel insurance as
an option along with travels services you buy from them. For example,
Hotwire.com — as a result of a
suggestion I made to their president — began offering trip cancellation
and interruption and supplier default insurance
for four percent of the cost of tickets purchased from Hotwire, with a US$12
per ticket minimum.
Airtreks.com,
with whom I was affiliated, offered links to a selection of travel insurance policies chosen
to suit the needs of long-term, independent international travellers.
Some regular insurance agents handle travel insurance, especially long-term
comprehensive travel medical insurance. If you’re travelling for six months
or more, or if you plan to travel regularly throughout the year, it may
be cheaper to include travel coverage with your regular health coverage. Check
with your regular insurance agent to see what they can offer.
You can also get travel insurance from specialists in the field. These include
travel insurance companies, direct providers of medevac and travel emergency
services, and independent travel insurance brokers and agencies that can help you
compare the offerings of different insurers. Following
are some of those I know of, with the types of coverage or services they offer.
These listings are not intended as endorsements. I’ve heard
good and bad things about almost all of these companies. This is just a list
to help you get strated on your own research, in case you have difficulty
finding companies that offer this sort of coverage at all.
Travel insurance companies and travel service providers
- International Medical Group (IMG)
http://www.imglobal.com
Coverage: Comprehensive travel medical insurance. (Expensive but genuinely
comprehensive coverage. IMG is the primary provider of medical insurance for
Peace Corps volunteers, and a leading insurer of missionaries
and other expatriates from the USA living and travelling in the Third and Fourth Worlds.)
- WorldNomads.com
http://www.worldnomads.com
Coverage: Bundled package including medical evacuation, emergency medical, and
trip cancellation and interruption. (No supplier default coverage.
Optional add-on coverage for cameras and personal electronic devices
typically excluded from coverage by other policies. Based in Australia, but
covers citizens of any country travelling anywhere outside their country of citizenship.
Designed for long-term international travellers without other health insurance.)
- Travelex
http://www.travelexinsurance.com
Coverage: Emergency medical, medevac, trip cancellation and interruption, supplier default.
(In addition to travel insurance, Travelex operates currency exchange and travel service
offices in each major world region. So if you want a company with regional staff to
help you if things go wrong, or if you want coverage for the default of
any airline or travel supplier, you should consider the offerings from Travelex.)
- Travel Guard International
http://www.travelguard.com
Coverage: Emergency medical, medevac, trip cancellation and interruption, and supplier default.
(Supplier default coverage excludes certain airlines and tour companies, but includes
all those not specifically listed. Travel Guard voluntarily covered those travellers who had purchased their insurance, and whose travel plans were disrupted after 11 September 2001, even though their insurance didn’t cover
war and terrorism and they could legally have refused to pay. But they might not do so again)
- CSA Travel Protection
http://www.csatravelprotection.com
Coverage: Emergency medical, medevac, and trip cancellation and interruption. (No supplier default coverage.)
- Seven Corners, Inc.
http://www.sevencorners.com
Formerly “Specialty Risk International, Inc. (SRI)”. Coverage: Emergency medical, medevac,
trip cancellation and interruption. (No supplier default coverage.)
Bundled with medevac coverage it provides a package tailored for people
who already have general-purpose health insurance. Note:
No longer a liability coverage option. If you want that coverage,
let them know and maybe they’ll be motivated to look for an underwriter for it.
- Highway To Health
http://www.highwaytohealth.com
Coverage: Emergency medical, medevac, and trip cancellation and interruption. (No supplier default coverage.)
- Allianz Global Assistance
http://www.allianztravelinsurance.com/
Multinational company, but products, services, and prices vary by country of residence. Covwerage sold to USA residents:
Emergency medical, medevac, and trip cancellation and interruption. (Supplier default coverage is
limited to a few selected airlines and tour operators, mainly the largest and most expensive,
and excludes all companies that aren’t specifically listed as covered.)
- Safeware
http://www.safeware.com
The leading specialists in the USA in personal computer insurance,
including laptops, peripherals, and accessories.
(Standard annucal package covers theft, accidental damage, water damage, and damage
in transport. Coverage offered to USA residents only, but covers damage
while at home or travelling worldwide, and can be renewed while continuing
to travel outside the USA, as long as you remain a Usa resident.)
- MEDJET Assistance
http://www.medjetassistance.com
Services: Emergency medical transportation. (For a fixed annual fee,
MEDJET Assistance will provide air ambulance transportation to the hospital of
your choice, worldwide, if you are hospitalized. That’s much more generous
than typical travel insurance, which only covers transportation to the
nearest hospital they deem suitable — not necessarily the one nearest
your home — and only if their doctors decide it’s essential. A
subscription to MEDJET Assistance will get you home if you’re
hospitalized. Period. If you have insurance, but it doesn’t provide for
medical evacuation, this may be the way to go. Note, however, that the
standard MEDJET Assistance plan doesn’t cover you if you are out of your
home country for more than 90 days at a time. You have to pay a higher
“expatriate” rate for coverage for longer stays abroad. MEDJET doesn’t own
or operate planes, but contracts with local air ambulance operators.)
- AirMed International
http://www.airmed.com
Services: Emergency medical transportation. (Like MEDJET, AirMed offers prepaid
medical evacuation services for a flat annual fee, with a higher rate for
stays of more than 90 days outside your home country. There are two major
differences: AirMed owns and operates its own planes, with its own staff —
which may or may not give better sevice than a local contractor, but may take
longer to arrive from their base in the USA. And Airmed only provides medevac
services if, in their judgment, it is medically necessary.)
Independent travel insurance brokers
Each of these brokers offers a selection of travel insurance
policies from multiple insurers. Note that none of these
brokers offers any policies I can find that include coverage for supplier default.
"Don't believe anything just because you read it on the Internet. Anyone can say anything on the Internet, and they do.
The Internet is the most effective medium in history for the rapid global propagation of rumor, myth, and false information."
(From The Practical Nomad Guide to the Online Travel Marketplace, 2001)
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