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Travel insurance: 5 signs you have the wrong plan


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Don’t look now, but you might have the wrong travel insurance. On second thought, better look now.

Karina Meiri wishes she had. Last year she booked a trip to Russia for a language course. But when Russia invaded Ukraine, she cut her trip short and filed a claim to recover her expenses.

“My insurance company denied the claim because my policy excluded war and hostilities between nations,” said Meiri, a university professor from Tenants Harbor, Maine.

In other words, she had the wrong travel insurance.

A Beginner’s Guide to Travel Insurance

“You have to read the fine print,” says Dan Richards, CEO of Global Rescue, a provider of medical, security and evacuation services. He says policies can exclude a range of activities, including mountain climbing, skydiving, scuba diving, paragliding and cross-country skiing.

The pandemic and volatile geopolitical situations have fueled interest in travel insurance coverage. But the choices can be overwhelming. Berkshire Hathaway Travel Protection, for example, has eight plans, such as WaveCare cruise insurance and policies that cover road trips and luxury travel.

Reality check: Unless you have a specific concern or a crystal ball, it can be difficult to know if you have the right plan. “By design, travel insurance helps protect you against certain unexpected events,” says Chris Carnicelli, CEO of Generali Global Assistance. So you won’t know you have the wrong policy until something happens that isn’t covered, like a military invasion.

However, is it possible to know if you have the wrong travel insurance policy? Yes, and here are some signs.

How to make a travel backup plan

If your travel insurance policy is not ‘cancelled for any reason’

Travelers often mistakenly believe that travel insurance covers everything. It doesn’t. A “cancel for any reason” insurance policy, which is typically more expensive, will allow you to cancel your holiday and receive a partial refund. But most insurance only covers specific, named events, such as a travel disruption or loss of luggage.

If your credit card travel insurance is limited

“Assuming your credit card insurance is as robust as a stand-alone policy is a common mistake travelers make,” says Damian Tysdal, founder of CoverTrip.

Credit cards can provide basic coverage, including for trip interruptions, evacuations and lost luggage, but the coverage can be limited. Tysdal says some cards, like the Chase Sapphire Reserve, may offer more coverage, but most don’t have enough.

Helen Prochilo, a travel consultant from Long Beach, NY, recalls that one of her clients wanted to rely on her credit card to cover a $14,000 cruise on the Danube River. Prochilo asked the traveler to read the fine print, which revealed that it would only cover $3,500 in losses if she had to cancel. Her client ended up buying a stand-alone policy.

“Two weeks before they were due to leave, her husband contracted pneumonia, and they had to cancel,” she says. “She would have lost over $10,000 if she had relied on the credit card insurance.”

How to budget for your dream trip this year

If the travel insurance was a real bargain

“Cheapest isn’t always the best way to go,” says Laura Heidt, the insurance desk manager at Brownell Travel.

Policies can be expensive. A conventional policy that covers said perils, such as a flight delay or hospitalization, will cost 7 to 9 percent of your prepaid, non-refundable expenses. A cancel-for-any-reason policy, which allows you to cancel your trip and receive a 50 to 75 percent refund, will set you back 10 to 12 percent.

Here’s an insider tip: The more complicated your trip, the more insurance you’ll likely need. “If your vacation requires you to take multiple modes of transportation to get to your final destination, it would be wise to consider purchasing a policy that includes a cancel-for-any-reason benefit,” says Beth Godlin, President of Aon Affinity Travel Practice.

If you are only concerned about policy maximum

Too often, travelers focus on the policy maximum — the amount insurance will pay for a covered event — but ignore what’s not covered. Travelers sometimes don’t mind exclusions, such as adventure sports. Sometimes they don’t pay attention to the effective dates, assuming they are covered on days when they are not. I once had a reader who booked a cruise delay and submitted a claim, but his policy had already expired.

“Don’t look at the policy maximum and nothing else,” advises Narendra Khatri, principal at Insubuy, an online travel insurance marketplace. “Take your time, review the benefits and see what is actually covered in different situations.”

After that, you can weigh those amounts against what you can afford to pay out of pocket. A travel advisor can help you review your policy and ensure you are fully covered. If you buy directly from a travel insurance company, you’ll get information about your options, but less personal advice.

If the cost of your trip just went up

Say you added a tour or rental to your trip after purchasing insurance. You may now have the wrong policy.

“The most common way people get underinsured is when they buy an insurance plan with a stated trip cost, and then spend more on additional travel arrangements for their trip,” says Dan Skilken, president of TripInsurance.com.

Fortunately, there is a solution. Many travel insurance companies will allow you to adjust your travel costs after you purchase a policy. Skilken recommends contacting your travel insurance company and asking how to update your travel costs. This does not apply to policies purchased directly through a cruise line or tour company, which are generally not convertible.

Above all, know what’s in your policy

“Always make sure you read your travel insurance policy,” says Tim Dodge, vice president of marketing at Arch RoamRight. “And ask questions.”

Skimming a travel insurance policy can be the biggest mistake travelers make when purchasing travel insurance.

“Yes, the documents are long and not exactly exciting reading, but grab a cup of coffee and dig in,” says Christina Tunnah, general manager of Americas marketing and brands at World Nomads. “It’s worth taking the time to read and understand your policy so you’ll know what to expect when the unexpected happens.”

Having second thoughts? You can get a refund on your travel insurance.

It’s all too easy to end up with the wrong travel insurance policy. I mean, who has time to read those whole policy? Who remembers to check with their insurance company to see if they added another component to their vacation?

I’m with you. I just rented a car from Audi on Demand in Houston and assumed my travel insurance policy would cover me. It didn’t. I wouldn’t have known that – unless I wrote this column. Fortunately, my Visa Signature card done cover the Audi, so there it is.

If you discover you have the wrong travel insurance policy, there is a way out. Many policies offer a “free look” period between 10 and 15 days after you buy them. You can usually cancel the policy and receive a full refund if you are within your trial period.