Insurance can perplex travelers

Nancy Mantini’s 80-year-old mother-in-law always wanted to visit her native Poland with her grandchildren. But last summer, just before they purchased the trip, Mantini’s father-in-law was diagnosed with cancer.

Mantini said they had no reason to believe he was in any immediate danger, but to be safe, she bought travel insurance recommended by her travel agent: $168 policies for each of the seven travelers.

When her father-in-law died unexpectedly three weeks later, shortly before they were to depart, Mantini’s family canceled the trip. They subsequently put in a claim with the insurance provider, assuming their situation would be covered. But the company, World Access, refused to pay — and Mantini’s family was out more than $10,000.

Mantini isn’t alone in being blindsided by the nuances of travel insurance. The process seems straightforward: Pay the premium, protect your investment. But in reality, it’s a complex, often baffling product that flummoxes many.

“People don’t understand what travel insurance is,” says Peter Evans, executive vice president of Insuremytrip.com, which sells travel insurance from 14 companies.

Policies, he explained, basically cover three areas: trip cancellation, medical coverage and medical evacuation. Beyond the basics, there also are baggage loss and delay, trip delay and accidental death.

Sounds simple, but there are idiosyncrasies in each policy that can come back to haunt a traveler who doesn’t pay attention to details.

“It’s not necessarily critical that a traveler read all the fine print, but they must ask whether their particular situation is covered,” says Jeffrey Miller, a Columbia, Md., attorney who represents travel companies

“For example, if you live with an elderly aunt, ask: ‘Am I covered if something happens to her?’ “

Miller says a good travel agent should be able to ensure that you get the right policy. But not all agents keep up with the nuances of these policies, which are constantly changing.

Internet sites such as Insuremytrip.com and Quotetravelinsurance.com can also help because they post charts that compare specific aspects of each policy. But an astute consumer will click on the details box to make sure the coverage is as broad as possible.

“Look at the exclusions,” said Evans. “Let’s say you’re going mountain climbing. Well, that activity is excluded by some policies.”

In Mantini’s case, her policy stated that pre-existing conditions would be waived if the insurance was purchased within 14 calendar days of making the first trip deposit, a common insurance clause.

Mantini did purchase the policy within the 14 days. But Emily Porter, vice president of marketing for Access America, the division of World Access that provides travel insurance, said there is another clause in the policy that states: “General exclusions include any expected or foreseeable events.”

“This is like trying to buy hurricane insurance for your home right after the weather service has predicted a hurricane for your area,” Porter said in an e-mail. “There is a chance it won’t hit your home, since hurricanes are unpredictable, but either way, the insurance company isn’t going to cover the forecasted hurricane if it does damage.”

Mantini, who is still fighting the decision, sees the situation differently.

“We bought the insurance because we didn’t know what was going to happen,” she said. “I thought that was what insurance was for. It’s partly my fault because I didn’t read the fine print. But I assumed insurance would cover us in this situation.”

Short of sending a prospective travel insurance policy to a lawyer, travelers can protect themselves by matching the right policy to their situation. Here are a few answers to commonly asked questions:

Q. Do I need to purchase travel insurance?

A. If you’re traveling domestically by car and staying at your brother-in-law’s house, probably not. But if you’re investing thousands of dollars into a trip to a resort, traveling out of the country or going with a group of relatives or friends, it’s a good idea.

According to figures from the U.S. Travel Insurance Association, an umbrella group of seven of the nation’s largest travel insurance companies, only 12 percent of travelers took out insurance before 9/11; that percentage has grown to 20 to 25 percent.

Few travel providers offer easy refunds, so without trip insurance, you very well may be out of luck. Some medical insurance will cover you outside the country, but extras — like paying for someone to escort you home — will not be included.

Also, if you have a costly, benefits-filled credit card, you may have some coverage, but check first.

Q. Are there different kinds of travel insurance?

A. Perusing a list of travel insurance policies is like looking at a menu at a Greek diner — there are pages of choices. Most travelers opt for a package deal, which includes medical coverage, trip protection, baggage loss and medical evacuation.

But many new products cover specific situations. For example, Travel Guard recently launched Cruise Guard for cruise passengers. Access America developed QuickTrip for last-minute travelers who don’t need trip-cancellation insurance but want medical and trip interruption coverage. Medjet International markets a product that’s not actually insurance, but for a yearly fee, you can be airlifted to the hospital of your choice in case of a medical emergency.

There are also special policies for students and yearly policies for business travelers.

Q. Will I be covered if my travel provider ceases operation?

A. Maybe. Some insurance providers, such as Access America, list the tour companies and airlines they’ll cover; United and other airlines in bankruptcy proceedings are not covered. Other policies, including some from CSA Travel Protection, will cover bankruptcy if the policy is purchased within a certain time period of the initial trip payment. And others, such as Travel Insured, will cover you only if no alternative transportation is available.

Q. If a hurricane or another weather disaster hits, will my vacation be protected?

A. Many policies do not cover weather disasters, unless everything is shut down. So if planes are running and the resort is open, you’ll have to take the trip or lose your money, regardless of the conditions.

Some real estate agents in local resorts, such as Village Realty in Nags Head, N.C., offer a policy from CSA that will refund your trip cost for mandatory hurricane evacuations on a prorated basis. Travel Guard also has a product that covers hurricanes.

Q. Will insurance policies cover my luggage?

A. Fortunately, just about every package policy covers luggage loss or delay, though amounts can vary. Travelex’s Travel Plus plan, for example, will pay up to $2,500 for lost luggage and up to $600 ($200 maximum a day) to replace items in luggage delayed by at least 24 hours; its cheaper TraveLite plan limits claims to $1,000 and $250, respectively.

Q. If I get sick and need to be evacuated, will the policy pay?

A. Yes, most package policies will pay, but there are limitations. Almost all policies state that they will transport you only as far as the “nearest adequate medical facility,” which is determined by them, not you. Some say you must be critically ill or injured to qualify. Some allow the attending physician to decide whether you need to be evacuated, while others say their program directors will make the call.

Q. Am I covered in the event of a terrorist attack?

A. About 80 percent of policies cover terrorism, according to Evans of Insuremytrip.com. Many have added this coverage since the post-9/11 insurance fiasco, when cruise companies were picking up passengers by van the day after the event and forcing them onto ships, and many travel insurance companies were refusing to allow even those living near Ground Zero to change their travel plans.

Policies vary; some cover terrorism in your city of departure and arrival, others just in the arrival city, and others include connecting cities. Some say a terrorist attack must have occurred within 30 days, others say 10 days.

Q. What happens if my cousin, to whom I’m very close, gets seriously ill? Can I cancel?

A. It depends. Many companies cover family members as long as they’re hospitalized. But if your cousin breaks his leg, you probably won’t be covered unless you’re responsible for his daily care.

Some companies, such as CSA and Access America, cover domestic partners; others, including Specialty Risk International, cover business partners. Just about all will pay for your cancellation if your travel companion becomes too sick to travel.

Q. How about pre-existing conditions? If I had a heart attack 10 years ago, will I not be covered if I have another one?

A. Pay close attention to pre-existing condition clauses, and give serious thought to your family demographics, your own health and possible situations. Most policies say that a pre-existing condition is one diagnosed or treated 120 days prior to purchase. So if you had a heart attack a year ago and you’ve recovered, that wouldn’t be considered a pre-existing condition.

Most policies also waive pre-existing conditions as long as you’re stable and you purchase within a certain period of buying the trip. But again, policies can differ. For example, iTravelInsured won’t waive pre-existing conditions for those over 70 who have ongoing medical issues.

Q. Is there a policy that will cover me if I simply don’t feel like going?

A. No policy will refund your money if you change your mind. Some cruise lines (including Cruise West and Princess) and tour operators (such as Trafalgar) offer “peace of mind” policies that allow you to receive cancellation penalty refunds in the form of a credit toward a future vacation, but they don’t just give you your money back unless your trip is so far in the future that you still qualify for a refund.

Q. How do I find insurance? Should I buy the policies offered by cruise lines, travel agents and tour operators, or should I shop around?

A. The downside of going through your cruise line or tour operator is that you won’t be covered if they go bankrupt. Also, many tour operators cover only trip protection, not medical insurance. And travel insurance is commissionable, so travel agents may want to push a certain product.

Shop around to get the best coverage at the best price. Even if you go through a travel agent, read the policy. But if the cruise company or tour operator is reputable, the price competitive and the policy covers peace-of-mind cancellations and medical, your best bet might be to go through them.

Q. How much should insurance cost?

A. According to Evans, the rule of thumb is between 5 and 7.5 percent of the trip’s cost, depending on coverage levels. Younger people will pay less, older people will pay more. For example, a $3,200 trip taken by a couple of 25-year-olds should cost about $223 to insure with a top-of-the-line policy, while an 85-year-old couple would pay about $890 for the same coverage.