Travel insurance is something that many travelers, especially younger travelers, ignore. In this post I’ll discuss our experiences in searching for and purchasing travel insurance that cost little enough that there is no reason to forego having the additional protection.
When I took my first international trip abroad as a young man I had quit my job and had no health insurance at all. I didn’t even consider buying travel insurance. Like most young people, I was sure nothing would ever go seriously wrong with me. I was gone from the U.S. for about 20 months total and during that time I visited a doctor three times…in Greece, Ireland, and Nepal. In each case they were for fairly minor things…the worst was a case of giardia from drinking contaminated water in India. In Greece I paid out of pocket, about $15-20 as I recall. The doctor in Ireland didn’t charge me…he said with my Irish last name he could just run the charge through the national health system. In Nepal, I think the cost was maybe $40-50 total for a couple doctor visits, lab tests, and antibiotics. My doctor in Kathmandu was the Minister for Health for Nepal, educated at Harvard Medical School.
I think back now on that trip, which involved numerous activities during which I could have gotten seriously injured as well as potential exposure to who knows how many other more dangerous parasites and diseases, and I realize I was probably more lucky than smart.
Nowadays, having experienced serious health issues that can occur suddenly out of the blue (a gall bladder attack which required removal) as well as other health issues that have increased my risks for injury accidents (recent hip replacement), I wouldn’t even consider traveling without some sort of medical and emergency evacuation coverage.
Our search for travel insurance
When we started planning our upcoming trip to Guatemala and Mexico we first checked out the international coverage provided by our U.S. health plan. We found that it actually provides some international coverage, for medical emergencies only. It doesn’t provide any evacuation coverage, nor coverage for any treatment received for a non-emergency condition or treatment at a non-emergency facility. What qualifies as a non-emergency condition is a bit of a grey area, but generally those conditions can be treated relatively inexpensively out of pocket in cheap countries anyway
Costs vary widely
What we were mainly looking for was a travel insurance plan that would provide us with evacuation coverage as well as some additional medical coverage in case our home insurance coverage wasn’t adequate or might be resistant to covering expenses in those grey areas. We shopped around on the various travel insurance websites and eventually purchased a six month policy from Allianz (www.allianz.com). We looked at seven or eight other popular companies and were quite surprised at the range of costs for similar coverage from the different companies. Costs for six months evacuation coverage with emergency medical around $50K and minimal trip cancelation and theft insurance coverage ranged in price from a couple hundred dollars to over $3000, with several in the $2000+ range. Why the huge disparity in prices? We don’t know. It appears that each company uses a different algorithm for figuring out what they’ll charge, and depending on the length of your trip and the coverage you need you can get very different quotes. Some companies, such as Allianz, seem to charge a lot for trip cancellation and theft coverage, but not so much for medical and evacuation coverage. We generally travel without a lot of expensive up front travel costs so we aren’t that concerned about trip cancellation and delay insurance, so entering a $1000 value for trip cancellation brought the cost of our coverage way down with them. Some companies scale their costs fairly linearly based on the length of the trip, but others don’t. Allianz, for example, charges about the same for a two month trip as for a six month trip.
Watch for coverage restrictions
Some companies place restrictions on their coverage which may not be a good fit for older adults or those with pre-existing conditions. World Nomads, for example, has fairly low prices for coverage and was highly recommended by several travel writers, but their policies do not cover pre-existing conditions. With my recent hip replacement, the thought of not being covered if my hip decides to dislocate during our trip took them out of consideration. If you have no pre-existing conditions, however, you might consider them.
Pre-packaged plans are generally more expensive
Companies that offer less customization during plan selection usually have higher prices, because you are stuck with pre-set levels for various coverage items, or default coverage for things you don’t need or want. Several months ago we put together a trial travel policy on TravelGuard’s website, using their option to create a custom plan and we came up with a great plan for low cost, similar to our Allianz plan. When we returned recently to shop for real we found that they had eliminated the custom plan option from their website and are now offering pre-configured plans only. Their lowest cost pre-configured plan was five times the cost of our original custom plan. Ger called them and confirmed they have eliminated that option.
Credit cards often have some trip insurance coverage
A number of travel oriented credit cards offer coverage for trip cancellation or interruption if you purchase those travel items (flights, lodging, etc.) on their card. Look at your cards to see what coverage they offer, or consider acquiring some cards that offer this kind of coverage. This can give you additional coverage on top of your travel insurance, possibly allowing you to lower the trip coverage amount on your travel insurance and lower your overall rate. Or, if your travel insurance has a pre-defined limit on loss coverage, you can get the additional coverage you might need.
The bottom line is you need to find out what coverage you have from your existing health plan and credit cards first, and then get estimates from a bunch of travel insurance companies and see which cost algorithm favors your particular trip parameters and coverage requirements. Also, be on the lookout for coverage limitations or exclusions, such as disallowing coverage for medical events related to a pre-existing condition.