Comparisons
What Does Travel Insurance Cover? Benefits & Exclusions
A friend of mine, to whom I'll refer to as Tom, called me at 3 am Nepal time from a hospital. He told me that while hiking, Tom saw some other tourists doing a paragliding activity and figured it was a good time to join. He was not wrong, unfortunately; he suffered a broken collarbone and shouldered, and multiple bruises on one side of his body.
Does my travel insurance cover this type of accident? According to the policy, it does not. His policy did not include paragliding as an activity, and he would have to bear the approximate cost of $8,000 for his treatment and return to the nearest hospital. Tom is certainly not an outlier. Most people buy travel insurance policies with the assumption that everything is covered, thinking that there is no travel insurance without extensive restrictions and exceptions. Here's a reality check about what does travel insurance covers and the items it usually does not.
Travel insurance can cover eligible medical expenses, emergency medical evacuations, trip cancellations or interruptions, travel delays, and baggage-related issues, but it does not include all losses and mishaps. The exact details, restrictions, and benefits depend on the type of policy, the benefits period, the applicable destinations, activities, and the information provided by the insured when purchasing the policy.
A comprehensive travel insurance policy should include both travel-disruption and travel-health benefits, but the two types are sometimes purchased together. The CDC recommends researching what travel insurance policy you need before purchasing and not assuming that trip cancellation coverage also includes overseas medical evacuation.
Does my travel insurance cover this type of accident? According to the policy, it does not. His policy did not include paragliding as an activity, and he would have to bear the approximate cost of $8,000 for his treatment and return to the nearest hospital. Tom is certainly not an outlier. Most people buy travel insurance policies with the assumption that everything is covered, thinking that there is no travel insurance without extensive restrictions and exceptions. Here's a reality check about what does travel insurance covers and the items it usually does not.
The short story
Travel insurance can cover eligible medical expenses, emergency medical evacuations, trip cancellations or interruptions, travel delays, and baggage-related issues, but it does not include all losses and mishaps. The exact details, restrictions, and benefits depend on the type of policy, the benefits period, the applicable destinations, activities, and the information provided by the insured when purchasing the policy.
A comprehensive travel insurance policy should include both travel-disruption and travel-health benefits, but the two types are sometimes purchased together. The CDC recommends researching what travel insurance policy you need before purchasing and not assuming that trip cancellation coverage also includes overseas medical evacuation.
Medical and emergency treatment
Medical and emergency treatment coverage may reimburse eligible expenses for urgent medical treatment or care while abroad. The benefit may include a deductible or excess, a maximum limit, prior-authorization rules, network requirements, and exclusions for conditions or activities not covered.
Prior to purchase ask:
The CDC advises that travelers may have to pay at-the-point service and claim reimbursement later, even with insurance in place. Keep every invoice, receipt, medical report and proof of payment -- reconstructing this after the fact is much harder than it sounds.
Coverage for medical evacuation can reimburse or arrange for emergency transport from remote or a facility that can't provide appropriate care. The policy may specify whether transport goes to the nearest suitable facility, another country, or all the way home. Repatriation of remains is a separate wording issue-check it rather than assume it's automatically included.
The insurer or assistance service typically has control over the decision to evacuate. The CDC explains that evacuation is generally decided under the policy's medical criteria and assistance process, not simply requested by the traveler. Check whether the policy offers 24-hour physician-backed support, and whether your destination's remoteness affects eligibility.
Don't look to settle for a low evacuation limit if you can help it -- remote area evacuations can be well past $100,000 once you factor in air ambulances and specialized transport, and a policy capped at $50,000 can leave a large portion of your bill with you.
Prior to purchase ask:
- Does the plan cover emergency treatment in both public and private facilities?
- Must the insurer approves admission, tests, or expensive treatment?
- Will the provider pay the hospital directly, or must you pay first?
- Are out-of-network, outpatient, ambulance, dental, and prescription costs treated differently?
- Does the plan covers the destination and every transit point?
The CDC advises that travelers may have to pay at-the-point service and claim reimbursement later, even with insurance in place. Keep every invoice, receipt, medical report and proof of payment -- reconstructing this after the fact is much harder than it sounds.
Medical evacuation and repatriation
Coverage for medical evacuation can reimburse or arrange for emergency transport from remote or a facility that can't provide appropriate care. The policy may specify whether transport goes to the nearest suitable facility, another country, or all the way home. Repatriation of remains is a separate wording issue-check it rather than assume it's automatically included.
The insurer or assistance service typically has control over the decision to evacuate. The CDC explains that evacuation is generally decided under the policy's medical criteria and assistance process, not simply requested by the traveler. Check whether the policy offers 24-hour physician-backed support, and whether your destination's remoteness affects eligibility.
Don't look to settle for a low evacuation limit if you can help it -- remote area evacuations can be well past $100,000 once you factor in air ambulances and specialized transport, and a policy capped at $50,000 can leave a large portion of your bill with you.
Trip cancellation and interruption
Trip-cancellation insurance may provide a reimbursement for an eligible, prepaid, non-refundable expense for a covered reason before departure. Each policy has its own list of reasons (see the policy’s definition). Common examples include specific illnesses, injuries, death, weather, or other events. Trip interruption covers expenses after departure. Coverage may include an eligible unused arrangement or additional transportation due to a covered interruption reason. Coverage does not apply to canceling a trip due to a change of mind, an event that occurred before the policy was purchased, or a type of event not included in the policy. “Cancel for any reason,” if available, is a separate benefit with different eligibility criteria, reimbursement limits, deadlines, and requirements.
Be sure to review the policy’s definitions of cancellation, the list of covered reasons for cancellation and interruption, excluded reasons, and required documentation. Some policies reimburse you for expenses up to a certain amount even if the supplier cancels or offers a refund or credit. This coverage prevents double payment for the same loss.
A travel-delay benefit provides a reimbursement of additional expenses for food, lodging, or transportation after a covered delay. Some policies cover expenses for a missed connection, a connection delay, or additional transportation due to a covered carrier delay. Review the reason for the trip delay or missed connection reimbursement, the minimum number of hours of delay, the maximum reimbursement per day or trip, and whether proof of delay from the carrier is required. Retain the original receipt and any documentation of expenses and reimbursements received. The additional expenses reimbursement benefit provides reimbursement under the terms and conditions of the policy. It is not a guarantee of reimbursement for any inconvenience.
Be sure to review the policy’s definitions of cancellation, the list of covered reasons for cancellation and interruption, excluded reasons, and required documentation. Some policies reimburse you for expenses up to a certain amount even if the supplier cancels or offers a refund or credit. This coverage prevents double payment for the same loss.
Travel delay and missed connections
A travel-delay benefit provides a reimbursement of additional expenses for food, lodging, or transportation after a covered delay. Some policies cover expenses for a missed connection, a connection delay, or additional transportation due to a covered carrier delay. Review the reason for the trip delay or missed connection reimbursement, the minimum number of hours of delay, the maximum reimbursement per day or trip, and whether proof of delay from the carrier is required. Retain the original receipt and any documentation of expenses and reimbursements received. The additional expenses reimbursement benefit provides reimbursement under the terms and conditions of the policy. It is not a guarantee of reimbursement for any inconvenience.
Travel insurance: Baggage loss, theft, damage, delay
A baggage cover may pay the loss or theft of an item up to a maximum amount, with sub-limits for each item or category of items. This cover could pay only after the airline, hotel, or other entity has compensated them up to its policy limits. A claim’s value could depend on such factors as age, depreciation, repair costs, receipts, and whether an item falls under the category of electronics, cash, documents, jewelry, or other.
Benefits for delayed baggage may cover the cost of essential purchases during a delay after a specific waiting period. Reporting a theft or loss of a bag should be done immediately at the time of loss, if any police, carrier, or other authorized report is required by the policy. Consider that baggage cover is only a limited benefit; the policyholder must carry their valuables with them for safekeeping and file the necessary documents proving ownership.
Emergency dental services coverage may apply to unexpected dental expenses incurred due to an accident or sudden pain. However, routine dental care is usually not included in a travel Health plan. Passport or document assistance is often available, but reimbursement for such services depends on the policy’s terms and conditions. Always check the fine print and limits for any benefits that would compensate you for expenses in the case of a claim.
Benefits for delayed baggage may cover the cost of essential purchases during a delay after a specific waiting period. Reporting a theft or loss of a bag should be done immediately at the time of loss, if any police, carrier, or other authorized report is required by the policy. Consider that baggage cover is only a limited benefit; the policyholder must carry their valuables with them for safekeeping and file the necessary documents proving ownership.
Emergency dental and document assistance
Emergency dental services coverage may apply to unexpected dental expenses incurred due to an accident or sudden pain. However, routine dental care is usually not included in a travel Health plan. Passport or document assistance is often available, but reimbursement for such services depends on the policy’s terms and conditions. Always check the fine print and limits for any benefits that would compensate you for expenses in the case of a claim.
Adventure sports and activities
Standard policies may well restrict or deny coverage for activities that the insurer deems risky. Scuba diving, skiing, climbing, paragliding, motorized activities, and competitive events might each have their own particular definition. There may be an additional policy available, which may also have its own restrictions on altitudes, depths, equipment, guides, safety, or competitions.
Don’t assume that because an activity falls under a general category such as hiking or water sports that it is covered; make sure to review the specifics of your activity and match them to the policy language. The CDC has specific recommendations when it comes to extreme activities such as skydiving, scuba diving, and mountain climbing, and recommends specifically looking at exclusions for these types of adventures.
This is what went wrong for Tom and his paragliding accident – the activity was neither unusual nor unexpected for the area, but it was classified as one requiring a specific rider, which Tom apparently was not aware of when he purchased the policy.
These are some typical areas of exclusion and restriction, but it is not an exhaustive list:
Your policy’s declarations and specific language will dictate response and recovery. The government recommends that you disclose pre-existing conditions and any treatments or tests that you are considering undergoing. It also suggests that you carefully review all activities and destinations you are considering, as well as your options for emergency transportation or evacuation.
Don’t assume that because an activity falls under a general category such as hiking or water sports that it is covered; make sure to review the specifics of your activity and match them to the policy language. The CDC has specific recommendations when it comes to extreme activities such as skydiving, scuba diving, and mountain climbing, and recommends specifically looking at exclusions for these types of adventures.
This is what went wrong for Tom and his paragliding accident – the activity was neither unusual nor unexpected for the area, but it was classified as one requiring a specific rider, which Tom apparently was not aware of when he purchased the policy.
Common exclusions and restrictions
These are some typical areas of exclusion and restriction, but it is not an exhaustive list:
- Pre-existing conditions or symptoms that were not disclosed or denied
- Elective, routine, or scheduled treatments
- Travel against medical advice
- Alcohol abuse or drug use, if those terms are specifically noted
- Wars, riots, terrorism, or natural disaster, if specifically noted
- Events or circumstances that occurred before the policy was purchased
- Professionals, competitive events, or extremely hazardous activities
- Destinations or transits through countries not covered by the policy
- Pregnancy and related complications, if not specifically mentioned
- Mental health diagnosis and treatment, if there is a specific exclusion
Your policy’s declarations and specific language will dictate response and recovery. The government recommends that you disclose pre-existing conditions and any treatments or tests that you are considering undergoing. It also suggests that you carefully review all activities and destinations you are considering, as well as your options for emergency transportation or evacuation.
How this works out in practice
Imagine that you are trekking in Patagonia and you twist your ankle and can't walk. If you have a comprehensive policy, here's how it might go down: You call the 24-hour assistance number listed on your policy, who will direct you to the nearest medical facility, where you can get an X-ray, have your ankle cast, and get some pain medication. The insurer will either bill the provider directly or get pre-authorization for the treatment. If you need to be evacuated, it can cost upwards of five figures, which the insurer will cover. The trip-interruption coverage can reimburse you for the unused portion of your guided tour and pay for you to change your return flight back home.
Without insurance, you pay for the medical treatment, the evacuation, the portion of your guided tour that you couldn't use, plus whatever the airline tickets cost you for having to change your flights back home at the last minute. That's tens of thousands of dollars in a situation where insurance may have only cost you hundreds of dollars.
Make a one-page summary of your notes before you leave so you have everything in one place. In it, note the number for emergency assistance provided by the insurer, which should be available 24-hours a day. You also want to make sure you know the effective dates of the policy, the territory covered, the medical and evacuation limits, the cancellation limits, any excess or deductible, any deadlines for reporting a claim, and what documents you will need to file a claim, such as a police report or medical claims form.
If you need to show proof of insurance for a visa application, make sure the certificate includes the applicable territory, dates, and medical benefits.
It hinges on how much you could lose and the medical or evacuation exposure of the trip. A cheap domestic round-trip with refunds might see little loss, but an international, non-refundable booking with adventures in exotic climes and expensive medical risk could see a much greater potential loss. Compare the policy's real limits and exclusions (not just the price) to the risks you can't self-insure.
Travel insurance can indeed cover valuable losses; the thing is, the event needs to happen, for which the policy is applicable. Confirm the medical coverage, evacuation, cancellation, interruption, delay, baggage, activity, and pre-existing-condition rules before you buy. Keep evidence during the trip, contact assistance promptly in an emergency, and read the exclusions as closely as the benefits.
Tom's paragliding bill could have been a $30 add-on at checkout. Read the activity list before you go, not while in a hospital bed working out how you're going to pay for it.
Without insurance, you pay for the medical treatment, the evacuation, the portion of your guided tour that you couldn't use, plus whatever the airline tickets cost you for having to change your flights back home at the last minute. That's tens of thousands of dollars in a situation where insurance may have only cost you hundreds of dollars.
What to look for in the policy
Make a one-page summary of your notes before you leave so you have everything in one place. In it, note the number for emergency assistance provided by the insurer, which should be available 24-hours a day. You also want to make sure you know the effective dates of the policy, the territory covered, the medical and evacuation limits, the cancellation limits, any excess or deductible, any deadlines for reporting a claim, and what documents you will need to file a claim, such as a police report or medical claims form.
If you need to show proof of insurance for a visa application, make sure the certificate includes the applicable territory, dates, and medical benefits.
Is the coverage worth it?
It hinges on how much you could lose and the medical or evacuation exposure of the trip. A cheap domestic round-trip with refunds might see little loss, but an international, non-refundable booking with adventures in exotic climes and expensive medical risk could see a much greater potential loss. Compare the policy's real limits and exclusions (not just the price) to the risks you can't self-insure.
Bottom line
Travel insurance can indeed cover valuable losses; the thing is, the event needs to happen, for which the policy is applicable. Confirm the medical coverage, evacuation, cancellation, interruption, delay, baggage, activity, and pre-existing-condition rules before you buy. Keep evidence during the trip, contact assistance promptly in an emergency, and read the exclusions as closely as the benefits.
Tom's paragliding bill could have been a $30 add-on at checkout. Read the activity list before you go, not while in a hospital bed working out how you're going to pay for it.
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