Myths and Misconceptions About Travel Insurance

Many people traveling abroad for vacation, family visits or a business trip debate whether to purchase travel insurance. Unfortunately, there are many prevalent myths about travel insurance, leading many people to believe that they don't need it or that it's a waste of money. Purchasing travel insurance, however, is necessary for all international trips.

Myth: My existing insurance will cover me

Truth: Many people mistakenly believe that their existing domestic health insurance, homeowner's insurance, or insurance through their credit card will cover them, making additional travel insurance unnecessary to purchase.

The truth is such coverages are very limited in what they cover before or during your trip. Travel insurance generally covers trip cancellation, trip interruption, emergency medical coverage, lost luggage, baggage delay, emergency medical evacuation, repatriation of remains and other incidents.

Even if your domestic health insurance provides coverage abroad, all services would be considered out of network and subject to a much higher deductible, coinsurance and out of pocket pay.

Myth: Nothing will happen to me while traveling

Truth: There are many perfectly healthy people who travel to foreign locations without incident. However, life is unpredictable, and anything can happen at any time. What if your trip is delayed? What if you need to come home early because a hurricane flooded your house?

While traveling abroad, many things may go wrong such as sickness, injury, a missed flight, natural disasters, unavoidable trip cancellation or passport theft. Moreover, if you are traveling to a location where adequate medical care is not available, emergency medical evacuation may cost from $30,000 to $150,000.

Myth: I can buy travel insurance later

Truth: Travel insurance that covers trip cancellation should be purchased as soon as the trip is booked. Trip cancellation coverage lasts from the day after insurance purchase until departure. The longer you wait, the less time you have coverage while still paying the same price. Also, a change in circumstances may require you to cancel your trip; if you already know you'll have to cancel, it's too late to receive coverage.

Myth: Buying travel insurance is useless because it is very difficult to claim

Truth: While it's true that not all travel insurance claims are valid and payable, a vast majority of legitimate claims are paid. Therefore, it's important to purchase travel insurance from a reputable insurance company.

Myth: All travel insurance policies are alike

Truth: There are many travel insurance policies from many insurance companies, and they may vary in benefits and costs. Review the fine details of different policies to make sure you are purchasing the right one for your needs. A reputable broker who specializes in travel insurance will be able to offer you travel insurance from many companies and will help you find the travel insurance most suited to your needs.

Myth: Pre-existing conditions will not be covered by travel insurance

Truth: Many travel insurance (trip cancellation insurance) policies cover pre-existing conditions if you buy the insurance within a certain time after making your initial trip deposit. Even if you pass that window, companies will provide coverage if your conditions were stable throughout the lookback period.

Myth: If my flight is delayed, the airline will cover me

Truth: In most countries, including the United States, you are not entitled to any compensation, meals or lodging expenses from an airline if your flight is delayed due to reasons beyond the airline's control such as inclement weather, air traffic delays or mechanical issues. The most an airline can do is get you to your destination when the next flight is available.

Travel insurance, on the other hand, covers meals and hotel rooms if your trip is delayed beyond certain duration.

Myth: I don't need travel insurance if I'm not doing any risky activities

Truth: When traveling abroad, people don't get injured just through risky activities. The possibility of getting sick or injured in an unfamiliar location is often more likely than travelers believe. In many countries, the laws of safety or traffic aren't strict. There may be no "wet floor" sign if the floor is wet. People may drive recklessly, and pedestrians may not have right of way. There are many other possibilities of something going wrong beyond participating in extreme activities.

Myth: Travel insurance won't cover hazardous activities

Truth: If you are going to be bungee jumping on your next vacation, or if your next cruise includes parasailing or scuba diving shore excursions, you should purchase appropriate travel insurance that would cover these activities. Many travel insurance policies can include such coverage.

Myth: If I get sick or injured while on a trip, the travel insurance company will fly me home

Truth: That is not feasible financially or medically. Your policy will cover emergency medical evacuation, which is transportation to the nearest place where adequate care can be given.

Myth: If I can't go on a trip, the travel supplier will give me a refund

Truth: Many travel arrangements, including airline tickets and cruise fees, are nonrefundable, no matter your circumstances. If you think you will experience a major situation, such as death in the family, and would be able to convince to the cruise company to refund you, it is not going to happen. That is what travel insurance is for.

Myth: Travel insurance is only trip cancellation coverage or medical coverage

Truth: In addition to trip cancellation coverage before the trip and emergency medical coverage during the trip, travel insurance provides coverage for many situations such as trip interruption, baggage loss or delay, repatriation of remains, emergency medical evacuation, accidental death and more.

Myth: Medical costs abroad are cheaper; I can pay out of pocket

Truth: For an American traveling to India or Kenya, this may be true. However, travel insurance provides other important benefits such as trip cancellation before the trip and trip interruption during the trip. Also, when traveling to countries where medical costs are low, the quality of healthcare is often low. If you need to be evacuated from a remote location in Africa, for example, the emergency medical evacuation may cost $100,000 or more. You would most likely not be able to pay that out of pocket. Therefore, purchasing proper travel insurance is highly recommended.

Myth: If I get sick abroad, I'll just fly myself back home

Truth: In some cases, that may be possible. However, if you are seriously sick or injured while abroad, flying yourself home would not be possible. If you have a heart attack, will you be able to buy an airline ticket and come home to get treated?

Conclusion

The above myths about purchasing travel insurance aren't the only ones out there. To clear them up, you should contact a reputable travel insurance broker for professional guidance.