These coverage gaps may surprise you
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Travelers briefly stranded abroad after the U.S. operation to rescue Venezuelan leader Nicolás Maduro learned a hard lesson about the limitations of travel insurance.
Travel insurance policies offer buyers a financial cushion in the event of a variety of unforeseen problems, such as having to pay for medical care or a hotel room abroad after a flight delay or cancellation.
But insurers set rules stating when they will and won’t pay these benefits.
Many limitations, or “exclusions,” in insurance language can surprise consumers, travel and insurance experts say.
“Consumers assume that travel insurance is comprehensive and covers everything that might happen,” said Chrissy Valdez, senior director of operations at insurance comparison site Squaremouth.
This is not true.
Venezuela creates ‘gray area’ for travel insurance
On January 3, the US Federal Aviation Administration closed airspace in parts of the Caribbean in support of the US military operation in Venezuela.
airlines Hundreds of flights were canceledThe event disrupted the plans of thousands of travelers during a busy holiday weekend, in an area that experts say is among the most popular destinations for travelers this time of year. The cuts have forced many people to cover the costs of extra travel days.
Airlines generally don’t have to compensate passengers for disruptions beyond their control, but they can do so voluntarily.
Travel insurance policy holders, including those with standalone policies or those receiving credit card assistance, may also be out of luck.
Many standard policies make exceptions for disruptions caused by war, undeclared war, civil unrest, insurgency, military activity or government intervention, experts said.
Policyholders in a difficult situation due to military action in Venezuela “may have run out of money,” said NerdWallet travel expert Sally French.
The fine print varies from insurer to insurer.
Insurers are often the ones making the final determination on whether something has occurred, such as an undeclared act of war or civil unrest, French said.
“Venezuela’s situation is very unique,” French said. “In another situation, you might see the government say we’ve declared war on a country. But Venezuela is challenging because we don’t know what’s actually happening.”
“There’s a lot of gray area,” he said.
Insurers may not cover ‘risky’ activities
Suzanne Morrow, CEO of insurance comparison site InsureMyTrip, said drunkenness was a potentially surprising or “interesting” exception.
“If you are drunk and injure yourself, your travel insurance may deny you medical treatment. [benefits]and don’t pay for it because you’re drunk,” he said.
Insurers may also consider some activities as risky.
Riding a motorcycle is usually such an exception because of the risk of injury, Morrow said.
Standard policies also generally exclude going on safari, hiking, horseback riding, skiing, snowboarding, scuba diving, hot air ballooning, zip lining, quad biking, off-roading, bungee jumping and kayaking, according to Squaremouth.
But there are specific policies and insurance consumers can purchase to cover such activities, Morrow said.
“Knowing what to do in advance should inform your insurance decisions,” he said.
Certain countries are prohibited
Another potential surprise for consumers is that travel to certain countries may not be covered by insurance policy, Morrow said.
This could be due to government travel advisories warning against visiting a country, federal sanctions against certain countries, or because an insurance company lists certain excluded countries in its consumer policy, he said.
Some, like Afghanistan and North Korea, may seem simple, while others may seem less simple, according to French.
For example, certain medical and evacuation benefits available with the Chase Sapphire Reserve credit card do not apply to travel to Vietnam. Website summarizing the advantages of the card.
“This is definitely an emerging country that a lot of people travel to,” French said. “North Korea, I understand. But Vietnam?”
US State Department website travel warning For Vietnam, it is currently at Level 1, the lowest level for safety and security risks.
Other travel insurance policies may help
In addition to purchasing more specialized policies that cover them during certain activities and conditions, consumers can also purchase more general insurance.
For example, cancel-for-any-reason coverage allows consumers to cancel a trip (yes, for any reason) and get their money back.
But experts say these policies are most helpful to consumers before they set out on a trip, not for those already on the road.
This is because policyholders usually have to notify the insurer at least 24 to 48 hours before the start of their trip to receive the benefits. Even then, consumers will generally be able to cover perhaps 50% to 75% of the total trip cost rather than the full cost, Valdez said.
These types of policies often carry a higher price tag.
Another optional add-on is coverage for outages for any reason, Valdez said.
Take into account a hypothetical example From travel insurer Seven Corners. Let’s say you’re in the middle of a multi-city European vacation and your next step is heading to Paris. You learn that there is a bedbug epidemic in many hotels in Paris and you want to cut your trip short rather than risk it. Bedbugs aren’t covered in most plans, according to Seven Corners, but interruption coverage for any reason can help consumers recoup some of their unused travel expenses.
