Travel insurance protects you against the unexpected on your vacation: a lost bag, a tropical storm that strands you at a regional airport, even a misstep that results in injury. But before you sign and buy your next insurance plan, you'll want to read this (along with the plan's fine print) to find out what it doesn't cover. Here are six things you might not know about what your policy does and does not cover.
1. Named and unnamed storms:
Your travel policy insures you against unknown risk, so the date you purchase it matters, especially when it comes to tropical storms and hurricanes. Once, a storm has been named, like Hurricane Sandy, it becomes a known risk; if you buy insurance at that point, you won’t be covered for any loss resulting from it. Your best bet: Purchase travel insurance at the time you make your initial trip payment. Assuming a storm hasn't already been named, you're okay, but again, if you buy after the storm is named, you're out of luck.
2. Vacations gone wrong:
Travel insurance covers you in the event that a hurricane wipes out your destination; it doesn’t protect you if you travel during hurricane season, it rains your entire vacation, or the power goes out. Although a few companies sell rain coverage, even these policies will only compensate if it rains 80 percent of the time or more. Bottom line: Travel insurance doesn’t insure you against a bad vacation.
3. Lost or stolen items:
Most travel insurance offers some compensation for lost or stolen baggage and personal items, but just in case, read the fine print. You may be surprised by what is often excluded: cell phones, laptops, keys, tickets to events or activities. On the other hand, you may already have the coverage needed to reimburse you for these lost or stolen possessions. Homeowners’ and renters’ insurance policies often provide protection for your jewelry, golf clubs, and even your laptop (you should always check your policy); credit card companies might also offer coverage for purchases made with their card; the airline you fly might also extend some limited guarantee for lost or damaged luggage.
4. High-risk activities:
Travel insurance policies exclude injuries resulting from some of the activities you may plan to participate in while on vacation – scuba diving, mountaineering, skydiving, hang gliding, bungee jumping, and other high-risk pursuits. Don’t let that dissuade you from purchasing travel insurance, though. The policy covers you before and after these activities. Ultimately, you may be on your own for injuries sustained during the dive, but if you slip on the boat on your way to the dive site and hit your head, travel insurance will pick up the medical tab.
5. Medical evacuation:
Your health insurance policy may or may not cover emergencies overseas, but most won’t cover illness, follow-up care, or medical evacuations. According to the U.S. Department of State, it can cost up to $50,000 for an overseas medical evacuation (some travel insurance companies say medical evacuation can be up to $150,000) – a gamble most travelers can’t afford to make. Opt for travel insurance that includes medical evacuation coverage if you plan to travel overseas, take a cruise (medical facilities are usually limited), or vacation in remote domestic locations. If you get heat stroke hiking in the Grand Canyon, you’ll need to be medically evacuated out.
6. Change period:
Take advantage of a policy’s "free look" period (all have them; the time varies but is usually 10–14 days) during which you have the opportunity to modify the terms, for an additional fee, if the policy doesn’t meet your needs.