A recent incident involving an acquaintance and a conversation with a travel friend have highlighted the importance of international travel insurance. We will take this opportunity to offer our thinking on this matter along with the results of a little research. Please understand that this is focused on American travelers but we are also aware of similar plans offered in Canada and other countries.
There are a number of different categories of travel insurance and you need to understand how your specific travel plans should determine the insurance you buy. Generally, insurance is available to cover problems in five specific areas:
- Trip Cancellation and Interruption
- Theft of Property Loss
- Health and Accident
- Medical Repatriation
In truth, we have maybe been too casual in selecting our own travel insurance. Our concerns have been focused in three main areas. First is a concern in having to cancel an expensive trip at the last minute and losing our invested money. The second is travel interruption causing us to miss difficult connections or a cruise sailing. Lastly are medical cost concerns while being out of the country.
We usually buy a cruise policy for longer cruises to cover us in the event we have to cancel or we unavoidably miss a sailing. Normally we forgo this insurance on shorter cruises because the potential loss in dollars is small and there is little likelihood of missing the cruise. In general, these policies provide medical cost reimbursement and property theft and loss protection. Some also, but not all, cover the cost of medical repatriation.
As a habit, we do not buy air travel insurance. The cost of these policies is mainly focused on the life insurance component and not on trip interruption, which, in most cases, is the airlines responsibility.
Our health insurance does have an international travel component that pays up to $50,000 with a lifetime cap of $50,000.
We have also carried a medical evacuation and repatriation policy for the past number of years that, to us, seems a reasonable expense. Less than $200 for an annual plan.
Cruise only – Let’s say you are taking a Mediterranean cruise with flights into and out of the sailing port, a cruise insurance policy probably provides the appropriate amount of coverage in most areas. We have at times been charged for medical services while onboard and had to submit documents to get reimbursed under these policies. We also had one occasion where a camera was stolen and we never seemed to be able to provide enough proof to get the loss paid but that is typical with many insurance policies. Most cruise policies also cover medical expenses if you need care in a local clinic or hospital while on the cruise as well as medical evacuation and repatriation. The same policy usually covers booked cruise/land packages.
Cruise with an extended land itinerary – If you are taking that Mediterranean cruise but then plan to go off on your own for a couple of weeks in Europe, chances are that a cruise policy will terminate on disembarking the ship. For that reason you need to understand that you will not be covered for medical emergencies above the limits of your American health insurance and, based on the incident involving our friend, that can be financially catastrophic.
Frequent international travel – If you are a frequent international traveler it is most important to analyze your risk concerns and how much you are comfortable paying. You have options of buying a complete medical plan (Geoblue) , a medical evacuation plan (EA+) or a complete annual insurance policy (Allianz, Amex) that offer some coverage in virtually all areas. Most policies however only provide coverage while on trips of less than 60 days each.
In our case we take a number of cruises and international trips a year and our biggest concerns are medical emergencies and evacuation so we keep an annual MedEvac plan in place. We believe our Medicare supplement offers adequate (we hope) medical coverage for now and will buy cruise policies on individual trips as mentioned above.
There are also complete annual travel policies, which should be considered if you travel internationally often. Generally they have lower limits on coverage, especially in areas like trip cancellation and property loss. For example most annual policies limit cancellation protection to $2,000 per year. Following is an example from a recent annual generic quote provided by Alianz for a typical retired couple.