When it comes to travel insurance, everyone makes mistakes. After all, policies are full of jargon and exclusions. And that's especially true for post-pandemic holidays.
COVID has triggered a seismic shift in travel insurance, with aftershocks still being felt. And travellers are struggling to navigate this new post-pandemic environment, experts say. There are more questions than answers about what insurance to buy now and a lot of confusion.
"Travel insurance providers are still dealing with all the pandemic-related claims," says Christina Papavlasopoulos, co-founder of Shefari, a women's travel agency.
What are the biggest travel insurance mistakes?
Papavlasopoulos says one of the biggest mistakes she has seen is assuming that travel insurance will cover poor travel planning. It doesn't.
"Your safest bet for guaranteed protection would be to buy from travel providers with clear terms and conditions and flexible cancellation and refund policies," she says. "Travel insurance is nothing more than insurance. It's a safeguard.
Travel insurance buying mistakes
While it can be essential, travel insurance remains a minefield of potential mistakes. Here's where you can go wrong.
Assuming you are covered
You know the saying "the large print gives, the small print takes away"? Well, that's especially true of travel insurance.
The large print promises 'protection' and implies that you can always make a successful claim. But the small print often contradicts this.
"The most common and costly mistake with travel insurance is assuming you are covered for everything," says Phil Sylvester, spokesman for World Nomads. "Make sure you understand what is and isn't covered by the plan you're considering, and shop around to find a product that suits your particular situation."
Ignoring travel insurance
Skipping travel insurance is a bad idea, especially at a time like this. You could lose all the value of your trip and sometimes much more. For example, if you have a serious medical problem while abroad, the cost of a medical evacuation could ruin you, literally. Yet some travellers don't buy travel insurance because it's too expensive.
This is especially true for "cancellation for any reason" insurance, says Damian Tysdal, travel insurance expert and host of the Safe Travels Podcast. "Cancel for any reason coverage is becoming the plan of choice for travelers booking trips after the coronavirus," he says. "There's far too much uncertainty not to get it, and the increased cost is less than you think."
A "cancel for any reason" travel insurance policy typically costs between 10% and 12% of the value of your trip, compared to 5% to 10% for a regular travel insurance policy.
Not finding a plan that covers COVID
While it is true that many policies will not cover another coronavirus outbreak, some still do.
"When planning trips in 2021 and beyond, travellers should look for plans that cover COVID-19," says Jeremy Murchland, CEO of Seven Corners, a travel insurance provider. "Don't make the mistake of not being prepared for this." (Several Seven Corners policies cover not only COVID-19 but also any COVID mutation).
Not paying attention to the limits of your coverage
Just because a policy covers COVID does not mean it covers everything related to the virus. At least that's what travel advisors like Kyle Bruening are finding.
"What we're finding is that some coverages say they'll cover COVID-19 testing, but not treatment," says Bruening, owner of Cruise Finder Inc. "Or they'll only cover COVID in some jurisdictions, but not in others." You need to have a plan that covers the coronavirus and pre-existing conditions that could worsen because of COVID-19.
Some of Bruening's clients with mild diabetes problems suffer complications such as acute kidney failure or hypertensive emergencies after contracting COVID, and they have found that travel insurance does not cover worsening conditions.
Not understanding their 'cancel for any reason' cover
"People make the mistake of paying for this more expensive coverage but not understanding all the rules," says Laura Heidt, insurance office manager at Brownell Travel.
For example, a "cancellation for any reason" policy must be purchased within seven to 21 days of the initial trip deposit. In addition, you must cancel the trip no later than 48 hours prior to departure in order to be reimbursed under the "cancellation for any reason" coverage.
Plus, travellers think they'll get all their money back. "But 'cancel for any reason' coverage only provides 50-75% of your out-of-pocket expenses, depending on the level you choose," adds Heidt. "Many people think this means a full refund, cancel a trip at the last minute and are disappointed that the policy doesn't cover it, or only recovers half their loss."
Waiting until the last minute to buy travel insurance
"Sometimes we'll have a client who has a reason to cancel, and they call to buy travel insurance quickly," says Krista Hull, a travel advisor at My Best Friend Went, a Colorado-based travel agency.
But travel insurance doesn't work like that. You can't buy a policy knowing you're about to cancel it. "Insurance is a risk game," Hull explains. "When you buy insurance, the company is betting that you will travel as planned, and you are betting that you might not." She says the best case scenario for all parties is to have the insurance in place and never need it.
Buying travel insurance from the wrong place
You can buy travel insurance from many places, including a travel agency, airline or cruise line, or directly from a travel insurance company. Procurement matters more than ever in a post-COVID world, say experts.
"It's important to know whether the company offers its own products or simply markets products from other companies," says Daniel Durazo, spokesman for Allianz Travel. Also pay attention to how claims are handled. Does the company manage its own complaints process? Does it have 24/7 customer service? Does it have an in-house travel assistance team available 24 hours a day to help with travel emergencies? If the answer to these questions is 'yes', you can probably buy a policy with confidence.
And one more thing. Do your homework, says Sherry Sutton, vice president of marketing for Travel Insured International. "I think the most important piece of advice for any traveller is to read your plan document," she says. "When something goes wrong, it's second nature to assume that your insurance plan will cover your event."
Not so. Every insurance plan has a list of exclusions, which describes what is not covered. Read them before you buy your policy, not when you have to file a claim.
So how do you avoid the biggest travel mistakes on your post-pandemic holiday? Don't assume anything and read your plan carefully. Think about a 'cancellation for any reason' policy and make sure you buy the policy from a reputable company.
But whatever you do, at least think seriously about travel insurance. Not doing so could be the biggest mistake of all.
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