Is Travel Insurance A Rip-off?

Is travel insurance a rip-off? That is a simple question with a complicated answer. To properly understand this issue, you should first understand what travel insurance is. The definition of travel insurance is fairly straightforward -it’s short term insurance that covers you while you are on vacation. Travel insurance coverage depends on the parameters of the policy, but in general it extends to lost or broken luggage, thefts that happen during your vacation, medical needs that might arise during your vacation and lost personal items.

There have been many documented occasions of travel insurers being downright fraudulent. The internet is rife with examples. Many people have complained about travel insurance that travel agencies or airlines recommend for them being absurdly expensive, difficult or impossible to use, or even non-existent. In some cases, class-action lawsuits have been filed and have been paid to fraud victims. Many people have claimed that exploitative travel agents offered them vacation packages at seemingly steep discounts, only to force them to purchase overpriced travel insurance packages.

That said, not all travel insurers are bad, and buying travel insurance is not always a bad idea. There are many reputable, well-organized, established travel insurers out there. The best thing you can do if you are considering travel insurance is do your homework. Compare different travel insurers’ rates and coverage packages. Read the fine print. Check consumer reports and fraud awareness websites.

Here is a brief list of circumstances in which you might find yourself where traveler’s insurance can be a big help. If you suspect you might run into one or more of these problems during your trip, then traveler’s insurance is probably a good idea.

Your flight is cancelled. If you are flying during a very high-volume holiday season and the weather is predicted to be particularly bad, traveler’s insurance might come in handy.

Your bags are lost and you have prescription medication. You need to have an emergency prescription filled. If you have critical medical needs, then traveler’s insurance is absolutely a good idea. You will want to be sure and have a quality, proven insurer with strong medical coverage. Regardless, you will want to put any prescription medications in your carry-on in case your luggage is lost.

Your passport and wallet are stolen and you need emergency cash and a new passport. It isn’t easy to predict a theft, but if you are traveling to an area where you are at greater risk of having your wallet stolen, insurance is a good idea.

A hurricane forces you to evacuate your hotel, resort or cruise. Certain areas of the world are more susceptible to hurricanes, especially during a few months of the year. If you are traveling to one of these volatile locations during hurricane season, insurance could bail you out if a storm comes.

A terrorist incident occurs in the city you’re planning to visit and you want to cancel your trip. Terrorism is a horrific, tremendously unfortunate reality in today’s complicated world. It’s horrible to think about, but if you are traveling in a particularly volatile part of the world, travel insurance might ease your mind.

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Travel Insurance Faqs

There are a lot of misconceptions related to travel insurance, and understandably most people aren’t as well versed in the fine details of travel insurance as I am I can’t say that I blame them! However, many misconceptions put people at risk of spending unnecessary amounts of money on areas that could and should be covered by their travel insurance policy.

So, I’ve compiled this mini travel insurance FAQ to assist those who have doubts, worries or questions about travel insurance.

Q: What should I do before going abroad?

A: Make sure you have adequate travel insurance and that you have checked the FCO Travel Advice for the countries you are visiting. Check you have sufficient money and that your passport is up-to-date. Take a photocopy of your passport details and keep in a safe place. Check what inoculations and visas are required. Note down the numbers and addresses of the UK embassy and consulate in the country you’re traveling to.

Q: Should I take out travel insurance before my holiday?

A: I may be a little biased on this one, but yes! It is extremely important that you take out adequate travel insurance even for short trips or visits to Europe, and absolutely imperative in countries outside the EU where different conditions make illness more likely and affordable medical cover that bit more difficult to get hold of. It also covers for cancellation as soon as you book your trip.

If you travel to a country, or part of a country, against FCO advice, it is unlikely that your insurer would meet any claim, however. Should the FCO advice change after you have booked a holiday, check the position with your tour operator and travel insurance company.

Q: Should I be looking at single trip or annual multi trip travel insurance?

A: Only you can answer that really although single trip insurance is (generally) cheaper, it does exactly what it says and covers you for just the one trip. By contrast, annual multi trip travel insurance will cover you for the whole year on various breaks, making it the choice if you think you’re likely to travel that much. You may find that just taking two trips a year would make annual multi trip travel insurance cheaper than the single trip variety!

Q: What sort of reason for cancellation is valid to ensure cover from travel insurance?

A: As long as your reason is within the scope of cover provided by your insurance, then you should be entitled to claim in most cases. Legitimate reasons for canceling your trip could include an illness or death in the family (as defined by your policy), freak weather conditions suspending travel for 24 hours, burglary or damage to your home, being a victim of criminal assault resulting in you being medically unable to travel, being called up for emergency military service or jury duty (subject to the specific terms and conditions of the policy). Likewise, if the hotel or resort (for independent travelers) you’re due to visit suffers from a terrorist attack in the days leading up to your travel, you will generally be able to claim.

Q: Who pays if I need to be hospitalized overseas or flown back to the UK?

A: If you have proper travel insurance, the insurance company should pay such fees. If not, the cost will fall to you or your relatives and friends.

Q: Is a European Health Insurance Card (EHIC) the same as health insurance?

A: No. The free European Health Insurance Card (EHIC) shows that the holder is entitled to reduced or free emergency care only within the EU. You will still need travel insurance to ensure you will be covered fully in the event of illness or injury. The EHIC card will help though, by reducing your initial outlay before you can be reimbursed by your travel insurance company.

Q: Is my pre existing medical condition a big issue?

A: Generally, yes. Check the wording of your policy to ensure it covers pre-existing medical conditions. Often they’re not covered unless you pay an extra premium, and if you fail to declare your condition when you buy the travel insurance, you’ll be unable to claim on it. As always the key advice here is to check the policy wording with a fine tooth comb.

Q: How can I find out whether it is safe to travel to a particular country?

A: It is strongly advised that you check the FCO Travel Advice section of their website (fto.gov.uk). This information is regularly updated and should give you solid advice on where is and is not safe to travel (remember, areas officially outlined as ‘unsafe’ will seldom be covered by travel insurance policies).

Q: Is it safe to travel after a terrorist attack overseas?

A: Unfortunately, there is no such thing as risk-free travel, and the absence of advice against travel to a particular country or area does not imply that the FCO guarantees safety in that country or area.

I hope this travel insurance FAQ has proved useful it’s only really scratching the service and each policy is different, but with this advice you should be in a better position to shop around, next time you need to purchase travel insurance.

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Why Take Out Travel Insurance?

It seems that many people in the UK ask themselves this question and conclude that there isn’t a reason to take out travel insurance. For a very few this may actually be the right conclusion, mainly those with enough money to cover any costs they may face, but for the vast majority of us, travel insurance provides necessary safeguards against mishap on our journeys, whether for business or pleasure.

Below I will detail some reasons, but by no means all, for having a travel insurance policy and possible consequences of not having one, but as everyone is different it is incumbent upon each person to make an assessment of their own needs in deciding whether they need to buy a travel insurance policy or not.

The major expense you may face when abroad is the cost of emergency medical treatment, please note the word emergency as travel insurance does not cover routine medical treatment or any treatment that the insurer considers could have waited until you return to the UK.
It does include the cost of transport to a hospital for emergency medical treatment, such as an ambulance, as in many countries the ambulance service is provided by private companies who charge for the service.
Most travel insurance policies also provide for repatriation to the UK once the attending doctors consider the patient fit enough to travel and this can include the costs of a doctor or nurse to be flown out to travel with the patient on the return journey where necessary.
It should be noted, however, that most travel insurance policies require you to notify the insurer as soon as possible if any treatment to be received is likely to cost above a set figure, and this figure can be as low as 250, in order to get the treatment authorised, failure to notify the insurer may invalidate any claim, so you must read the policy documents and familiarise yourself with the claims procedure. This is why it is vital to have a copy of the travel insurance policy and documents with you when you travel. Always err on the side of caution and call the insurer’s claim handling number if you are unsure.

The range of cover available for emergency medical treatment included on a travel insurance policy is often within the range of 1 million to 10 million.

Most travel insurance policies include some cover for emergency dental treatment but often this is for no more than a few hundred pounds and usually only for treatment to stop pain, not for any remedial work.

Most travel insurance policies, and especially the cheaper ones, do not cover pre-existing medical conditions, mainly because the costs to the insurers for claims by people without pre-existing medical conditions are significantly lower and, therefore, the insurers can keep the premiums down.

If you have pre-existing medical conditions you have a choice to make, namely do you buy a travel insurance policy that will cover emergency medical costs arising from an episode that can be attributed, either directly or indirectly, to the pre-existing medical condition or not.
Bear in mind that you will only be covered on a travel insurance policy for costs of medical treatment that require immediate attention, so you have to decide if your condition(s) is/are the type of thing that could flare up suddenly and require you to need emergency medical attention and I would suggest that you discuss this with your GP if you haven’t already.
It is not mandatory to declare a pre-existing medical condition to an insurer and pay the extra cost to have it covered, but if you choose not to you must accept that the insurer will reject any claim for costs associated with the condition and not just the medical costs.
There are definitely some medical conditions that I would consider it to be unwise not to cover, these are mainly systemic conditions such as high blood pressure and diabetes; any heart related condition; any stroke related condition; cancers if there is a possibility of a sudden deterioration in health or if the cancer may spread to other parts of the body; any condition that may cause loss of balance, such as epilepsy, which could lead to a fall causing sprains or broken bones; and any condition that can cause a sudden episode that requires immediate treatment by a medical professional, such as gall stones where the gall bladder was not removed.
This is not a comprehensive list by any means, only you and your doctor(s) can make the necessary assessment of the likelihood of an occurrence triggered by a pre-existing medical condition.

After cover for emergency medical treatment the next largest sum insured on a travel insurance policy is normally personal liability cover which is cover in case you are responsible for damaging someone or their property, although it is usual for any damage caused by you operating a vehicle or an animal under your control to be excluded, a separate policy in these circumstances is required, although if you are renting the vehicle or animal, the required insurance may be included in the package and you should check that this is the case. Cover for personal liability is usually between 500,000 and 2 million.

If you become involved in litigation as a result of an incident on your trip you will be thankful for the legal expenses cover included in most travel insurance policies, although this is usually no more than a few tens of thousands of pounds rather than the much larger sums for emergency medical treatment and personal liability, how many of us have that much spare cash available?

Other parts of a travel insurance policy include cancellation cover, personal belongings cover, cover for loss of money or passport, and cover for travel delay or disruption, although this is normally only for the initial travel from and returning to the home country, any connecting flights or other transport are not covered. While these incidents are no doubt irritating and inconveniencing they are not potentially financially ruinous.

In summary, unless you can cover all the potential costs of an incident abroad with your existing financial resources, and even then, who would want to use up those resources instead of spending a tiny fraction of them on a travel insurance policy, it makes sense to buy a travel insurance policy.
Without travel insurance you would be forced into making the decision of whether you can afford potentially life saving medical treatment or not, a most invidious position in which to find yourself.
As with all forms of insurance you have to balance the cost of the policy at the outset against the potential cost of not being insured.
My intention here is not to give advice but to raise topics you might want to think about, in the end only you can make the assessment about what is right for your circumstances.
Whatever you decide I hope you have a happy and trouble free trip.

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