Reading a Travel Insurance Policy

Travel insurance policies are long, dense documents, and most buyers read only the price and the headline benefits. The parts that decide whether a claim gets paid are elsewhere: in the definitions, the exclusions and the timing rules. Reading a policy in the order below takes about twenty minutes and is the most reliable way to tell a good one from a cheap one.

Before you start, check what you already have. Some credit cards include trip cancellation, trip delay or baggage cover when you pay for the trip with that card, and the card's guide to benefits lists the limits. Your health plan may or may not cover care abroad. Original Medicare generally does not pay for care outside the US except in a few narrow situations, while some Medigap plans include a limited foreign travel emergency benefit. Knowing these gaps tells you which parts of a travel policy you actually need.

The schedule of benefits

This is the table near the front listing each type of cover and its maximum payout. Look at three lines first. Emergency medical pays for treatment abroad. Medical evacuation pays to move you to an adequate hospital or home, which on its own can cost tens of thousands of dollars from a remote area. Trip cancellation reimburses prepaid, non-refundable costs, and its limit should match what you have actually paid. If you are visiting a country in the Schengen area on a visa, the medical cover must meet the Schengen requirement of at least €30,000.

Primary or secondary

Somewhere in the medical section the policy will say whether it pays first or only after your other insurance. Primary cover pays the hospital directly or reimburses you without waiting for another insurer. Secondary cover expects you to claim from your own health plan first, which is slower and can be awkward from abroad.

Covered reasons

Trip cancellation does not cover every reason for cancelling. The policy lists the covered reasons, typically illness, injury or death of you, a travel companion or a close family member, as well as events such as a hurricane making your destination uninhabitable or jury duty. Changing your mind, a work commitment or a general fear of travel are usually not covered. Read the definition of "family member" too, since some policies exclude in-laws or grandparents.

Cancel for any reason

Some insurers sell an upgrade called cancel for any reason. It raises the premium noticeably and usually reimburses only part of your costs, often 50 to 75 percent. It typically has to be bought within a short window after your first trip payment, often 14 to 21 days, and the trip must usually be cancelled at least two days before departure. It suits travelers whose plans genuinely might change for reasons no standard policy covers.

Pre-existing conditions

Most policies exclude medical conditions that existed, were treated or changed in a look-back period before you bought the policy, often 60 to 180 days. Many will waive that exclusion if you buy the policy soon after your first trip payment, insure the full cost of the trip and are medically fit to travel when you buy. The waiver's conditions are in this section, and missing the purchase deadline is one of the most common reasons claims are refused.

Exclusions

This list deserves a careful read. Common exclusions include injuries from activities like scuba diving below a certain depth, skydiving or mountaineering, unless you buy a sports add-on; incidents involving alcohol or drugs; travel to areas under a government "do not travel" advisory; and losses from events that were already known when you bought the policy, such as a named storm.

Baggage and delay

Baggage cover usually has a per-item limit, often a few hundred dollars, and tighter limits on electronics and jewelry. Delay cover pays for meals and a hotel when a flight is held up beyond a set number of hours, commonly six to twelve. Keep receipts for everything, since claims without them are routinely refused.

Rental cars

Some travel policies include collision damage cover for rental cars, which can let you decline the rental company's own waiver at the counter. Read the limits and the list of excluded countries and vehicle types carefully, and compare it with what your car insurance and credit card already provide, since paying for the same cover three times is common.

Comparing quotes

Comprehensive policies are often priced at a percentage of the trip cost, while medical-only policies are priced mainly on age and length of stay. When comparing, line up the same items side by side: medical and evacuation limits, whether medical is primary, the pre-existing condition waiver window, the covered reasons for cancellation and the deductible. A cheaper policy with a high deductible or secondary medical cover can turn out to be the more expensive one when something goes wrong. Comparison sites help, but always read the actual policy wording before paying, and note the free-look period, often 10 to 15 days, during which you can cancel for a refund if the policy turns out not to fit.

How to make a claim

The final section explains what the insurer needs and how quickly. For a medical emergency, call the assistance number on the policy before treatment if you possibly can. For cancellations, you'll usually need a doctor's statement and proof of what you paid. Save the policy and the assistance number on your phone and share them with someone at home before you leave.