Lyn Crosby is planning a trip to Australia. But she knows that it's dangerous out there — more dangerous than it’s been in a while. Between brush fires and viral outbreaks, there's never been a better time to consider travel protection. But what's on your travel insurance checklist?
Crosby has already ticked off a few boxes on her insurance checklist, including trip cancellation benefits and car rental coverage. But she's stuck on one question: Is $50,000 enough travel insurance coverage for a trip Down Under?
"I'm looking for a recommendation on a minimum amount of coverage," she says.
The travel insurance checklist is the talk of the travel industry during these uncertain times. Whether you're traveling for business or leisure, you need to know what's in your policy now. And, at the very least, you need to be aware of your insurance covers before you leave for your next trip.
"Things can and do go wrong — from accidents and illnesses to being in the wrong place at the wrong time when a natural catastrophe occurs," says John Thompson, the division president for international accident and health at Chubb. "There are also more frequent inconveniences and problems like a stolen wallet or mobile phone, or lost luggage."
The answer to Crosby's question, as in almost all things travel insurance-related, is: It depends. Most people never use more than $50,000 of medical coverage on a trip. But some do. You have to sit down with an insurance professional and review the risks. Any employee traveling on business should review risk with a human resources rep. You need to find out what your health insurance will cover. (Some policies offer coverage for the first 30 days outside the country).
The medical coverage box is bigger than you might think, say experts. "It's always a good idea to make sure your travel insurance policy covers both emergency medical costs and emergency medical transportation when traveling internationally," says Daniel Durazo, a spokesman for Allianz Travel.
What should be on your travel insurance checklist?
- Worldwide medical benefits and low deductibles for out-of-pocket expenses.
- At least $50,000 of emergency medical expenses and $250,000 of emergency medical evacuation coverage.
- Coverage for epidemics and pandemics. Many policies hide restrictions and exclusions in the fine print.
- Experience handling international claims, including the ability to handle payments in a foreign currency.
"Knowledge is power," says Zubair Jeewanjee, the CEO of G1G Travel & Visitors Insurance, an insuretech company. "You should always know what your insurance covers."
What if something goes wrong?
First of all, when it comes to insurance, assume nothing.
"Don't count on your medical insurance covering illness or injury costs while you're in a foreign country," says Melanie Musson, an insurance expert for the site USInsuranceAgents.com. "There may be exceptions, but the standard across the board is that they will not."
At a time like this, travelers should be asking: What if something goes wrong?
"What's the extent of my coverage?" asks Chubb's Thompson. "Do I know who I'd call if I become sick or injured on the road?"
That's especially true for business travelers, he says.
"If I find myself in extended care in another country, will my company's policy support having my partner come to be by my side? Might I have to front out-of-pocket expenses because my company's insurance policy doesn't provide consistent worldwide benefits?," he asks.
Ask more than if the benefit exists. Also, ask if the company has the resources to provide the benefit. For example, Thompson remembers a case when two employees were stranded in Dominica after a Category 5 hurricane.
"The airport was closed, power was limited and telecommunications unreliable," he says. "The whereabouts of the researchers was not known."
Chubb quickly teamed up with a security company and the policyholder to track down the workers. Then it sent a helicopter to evacuate them to safety.
Travel insurance checklist essentials: Look for these coverage minimums
If you're going anywhere that may be considered hazardous, you absolutely must know what your policy will cover, agrees Stan Sandberg, co-founder of TravelInsurance.com, a travel insurance site.
At a time of heightened fears because of the coronavirus outbreak, travelers should be looking for some basic minimums.
"They should seek out a plan that provides at least $50,000 of emergency medical expense and $250,000 of emergency medical evacuation coverage," he says.
If you're already covered through your employer's insurance, it's time to ask hard questions.
"You should absolutely know what your company will and won't cover in the event of a medical emergency," he says. "Will their medical expenses be paid for by the company? Does the company offer emergency medical evacuation coverage and repatriation?"
If the answer to either of those questions is "no," then you should consider asking for a plan that covers those events, he says.
What about pandemics?
There's always a pandemic threat around the corner — whether it's the coronavirus or just flu season. But you should be asking detailed questions of your policy about that, too, according to Pallavi Sadekar, a client services executive at Visitor Guard, a company that provides visitors insurance policies.
"Some insurance plans explicitly exclude epidemics, which would exclude benefits and reimbursement for coronavirus-related illnesses, so make sure to ask about those coverages before the trip," he says. "If your existing insurance policy does not cover essential protections while traveling, ask your employer about purchasing a visitors health insurance plan to cover the health risk associated with travel."
How does my travel insurance company handle claims outside the United States?
Now more than ever, you need to know, says Jeremy Murchland, the president of Seven Corners.
"Ask yourself, 'Will I have access to a network of international medical providers, so I know where to seek treatment if I become ill or get hurt while traveling?'" he says. "If so, is there a direct payment arrangement in place with the providers?"
Also critical: Will you have to pay any money upfront?
"Some foreign providers require payment upfront," he adds.
He's right. One of the most common complaints at my nonprofit consumer advocacy organization, when it comes to overseas insurance claims, is what I like to call "pay or stay" proposition. You end up in a third-world hospital, and they won't discharge you until you pay your bill in full.
The best insurance companies have people who can make arrangements to preauthorize payment for your treatment. That way, you just have to worry about getting home after your unexpected hospital stay.
Which brings us to another relevant question: Does the insurance carrier have experience processing claims outside the United States? Many domestic insurance carriers aren't set up to process international claims and can't handle foreign currencies.
"But travel medical insurance companies have experience dealing with these types of processes," adds Murchland.
How to find out what's in your insurance policy
Now is the best time to find your policy and review it with your travel insurance checklist. Your carrier should offer a copy online but will also send it to you when you buy your insurance.
Allianz recently surveyed its policyholders and found travelers with the best understanding of travel insurance tend to buy it more.
"It may be a cliché," says Durazo, the Allianz spokesman. "But it's true that an educated consumer is our best customer."
If you find you don't have the right policy — say, your domestic health insurance policy or your corporate travel policy won't cover you — then this is a good time to check with a travel insurance pro.
"Find a plan that fits the needs of their trip," advises G1G Travel & Visitors Insurance's Jeewanjee. He says finding a plan that meets the needs of their trip means knowing a few basics about the destination. Get a sense of the political situation, and an idea of what the weather will be and if there are any potentials for natural disasters, like earthquakes, volcanoes, or hurricanes.
"You should also have a sense of what you'd want to do while you're there," he adds. For example, will you be engaged in any high-risk activities?
A knowledgeable professional can match you with the right policy.
Creating a travel insurance checklist should be priority one on your overall trip checklist.
"That's the best way to get the most out of your insurance policy and make sure you have the right product for your trip," says Durazo.