Faced with Covid-19 coronavirus, people – as they tend to during infectious outbreaks – have become concerned about whether and to what extent their insurance will cover costs associated with the event. In the case of travel insurance, there’s good, bad, and ambiguous news.
If you contract coronavirus before you travel or while you’re traveling and have a standard policy that includes coverage for medical treatment and medical evacuation, your care probably will be covered. The “probably” is due to the fact that many insurers set a deadline – a date before which you might be covered but after which you won’t be. That’s because Covid-19 is now a “foreseen circumstance” — people now know about it.
Trip cancellation can be more complicated. Many policies exclude losses caused by disease outbreaks. Cancelling a trip simply because you don’t want to risk infection likely won’t be covered by a standard policy.
What if you get sick and need to cancel your trip? You might be covered, depending on the insurer and a long list of conditions. For example, an illness that would be covered often requires a medical professional to confirm that the policyholder was, in fact, too sick to travel.
A cancel for any reason (CFAR) policy can help you recoup part of your expense, but they’re pricey: usually around 10 percent of the cost of your trip, compared with four to six percent for a standard policy.
Do these exclusions and uncertainties mean medical travel insurance is a waste of money?
Not at all.
As I’ve written before, there are many ways one can be injured, fall ill, or die abroad – and your regular medical coverage may not work the same way abroad as it does at home. Since we’re talking about infectious diseases, take a look at the recent snippet below from the CDC website for a glimpse at some areas of concern. The list is always changing.
With travel policies – as with all other forms of insurance – it’s important to understand what’s covered and what isn’t and talk with your agent to be sure you’re getting the coverage you need. You also should thoroughly research your destinations and planned activities for possible exclusions.
As I’ve written previously, many who travel for pleasure think little, if at all, about the risks associated with their destinations and plans. Travel insurance, such folks believe, is to cover the cost and inconvenience of trip cancellations and lost luggage.
Who wants to think about illness, accidents, and – you know, the other thing – when going on holiday?
Industry numbers seem to bear this out. A recent report by the U.S. Travel Insurance Association (USTIA) found Americans spent nearly $3.8 billion on travel insurance in 2018, up nearly 41 percent from 2016. However, trip cancellation/interruption coverage accounted for nearly 90 percent of the benefits purchased. Medical and medical evacuation benefits accounted for just over 6 percent.
Most common claim, but…
Indeed, trip cancellation is the most common claim paid on travel policies (or so I’m told – insurers hold their claims data close to the vest). Assuming this is the case, one might be tempted to roll the dice when it comes to occurrences that seem less likely – say, an automobile accident, a bad fall, or a heart attack or stroke.
Last week’s story about a 22-year-old Briton fighting for his life after falling from a hotel balcony in Ibiza got me thinking about value of the “post-departure benefits” of travel insurance. According to the article, the young man had insurance, though it wasn’t clear what kind of coverage he’d bought. The article did say his parents are soliciting funds on line to help with expenses.
“Globally, an estimated 37 million unintentional falls requiring medical treatment occur each year” write researchers in the journal Injury Epidemiology, citing 2018 World Health Organization (WHO) data. Unsurprisingly, alcohol consumption was found to be a major risk factor in these falls.
During one three-month period in 2018, the BBC reported, citing the Association of British Travel Agents, “11 British holidaymakers have been reported as falling from a balcony – with eight of them in their teens or 20s.” In March 2019, a Missouri man fell from the balcony of a Florida hotel where he was vacationing. In the same month, a Michigan teen on vacation in Cancun fell to his death.
Think you’re too smart, careful, or abstemious to fall from a balcony? Well, the most common cause of injury and death on vacation isn’t falls. It is – you guessed it – automobile accidents. According to a WHO and World Bank report, “deaths from road traffic injuries account for around 25% of all deaths from injury”.
According to the Centers for Disease Control and Prevention (CDC) 1.3 million people are killed and 20-50 million injured in crashes worldwide annually. The CDC says 25,000 of those deaths involve tourists.
There are things you can’t predict
Or maybe you avoid a fall or a crash and wind up in a situation like New Yorker Steve Lapidus, who credits his $79 travel insurance policy with saving his life when he became seriously ill while on vacation in Italy. Steve was in a coma for several days with sepsis and pneumonia and given 50/50 odds of surviving. But, after six-and-a-half weeks of medical care, doctors cleared him to fly home.
The problem was, he couldn’t walk and needed special care and a specially modified plane. Lufthansa built a special pod within one of its commercial flights.
That $79 policy covered the entire $70,000 bill.
Plan for the best – insure for the worst
No one wants to buy insurance. Who on Earth would choose to buy a product that, under the best possible circumstances, they never use?
But you don’t buy insurance for the best-case scenario. It’s when the worst happens that you will likely regret not having it.
Most people don’t like to think about risk — especially when planning a holiday abroad. If they think about travel risk at all, it tends to be in terms of nuisances like flight cancellations or misrouted luggage.
This week’s seemingly overnight collapse of British travel company Thomas Cook – leaving approximately 600,000 travelers stranded worldwide and leading U.K. authorities to launch what has been called be the “largest peacetime repatriation ever” – underscores several of the myriad risks that most travelers rarely think about.
For better or worse, when I hear “repatriation” the word is typically followed in my mind by “of remains.” While mass repatriations like the one occurring this week are rare, people often die while traveling for pleasure or business. Whether it’s headline-grabbing strings of mysterious deaths like those in the Dominican Republic earlier this year or more common, less publicized deaths by auto, drowning, or natural causes, the cost and complexity of returning the bodies of loved ones can compound the stresses typically experienced by grieving families. A travel policy with adequate coverage for repatriation of remains is a relatively inexpensive way to help address this burden.
Now, you’re even more likely to become ill or injured while traveling than you are to die. Have you checked your current health insurance to see what it does and doesn’t cover when you’re traveling outside your country? Depending on what you learn, you may want to consider buying medical travel insurance. If your health policy does provide international coverage, the U.S. State Department advises that you remember to carry your insurance policy identity card and a claim form.
In the case of a serious illness or injury, the State Department says, medical evacuation can cost more than $50,000, depending on your location and condition. A policy that covers medical evacuation and emergency extraction (say, in the event of natural disaster or political unrest) also is worth considering for international trips.
Perhaps the most important lesson to draw from the “surprise” collapse of 178-year-old Thomas Cook is that it wasn’t exactly a surprise for those who were paying attention. As the U.K.-based Guardian news site reports, “The tour operator’s woes go back much further” than its inability to secure a £200 million lifeline from its bankers. The Guardian calls Thomas Cook “a victim of a disastrous merger in 2007, ballooning debts and the internet revolution in holiday booking. Add in Brexit uncertainty, and it was perhaps only a matter of time before the giant of the industry collapsed.”
Travelers often are so focused on capturing bargains that they don’t take the time to research the organizations bringing them great deals or the safety considerations in the lovely destinations being marketed to them. In travel, as in other adventures, it’s often the case that “you get what you pay for.”
Maybe a bit of research might have kept some of the hundreds of thousands of inconvenienced Thomas Cook clients from putting all their holiday eggs in a single overstuffed basket.
The East Coast blizzard has left thousands of passengers looking for a way to get home from the holidays. I was one of them.
My familyÃ¢â‚¬â„¢s return flight early Tuesday to Newark from New Orleans was cancelled. The earliest the airline could rebook us was nearly a week later.
Not wanting to wait out the delay, especially with an infant, in either the airport or a local hotel, we chose Ã¢â‚¬“ at our ownÃ‚ expense Ã¢â‚¬“ to rent a car and drive home.
HereÃ¢â‚¬â„¢s a tally of the costs involved:
One-way rental car: $400
One night hotel: $100
Two extra days parking (for our own vehicle) at Newark airport: $40
Two extra nights boarding for our dog: $120
Refund from airline for half fare: -$200
Grand total: $735
As many displaced travelers are being reminded, airlines are not required to compensate you for hotel/transport/food costs in the event your flight is delayed due to bad weather.
Looking at the blizzard-related costs to our family has us reevaluating the need for travel insurance, especially when taking a trip during the winter months. But are such policies worth the extra cost?
The bottom line is that travel insurance can provide some useful protection. Check out this I.I.I. video to find out whether itÃ¢â‚¬â„¢s right for you.