Travel Insurance: The Legal Fine Print You Need To Know

Most Americans only get about two weeks of vacation per year. Having so little time available to take a trip, people spend heavily on vacations. With so much time and money invested in travel, cancellations or emergencies can have a big financial impact. Travel insurance is a way to protect yourself against common losses related to travel disruptions.

Before purchasing travel insurance, make sure you understand the fine print. The claims process is frustrating, and the insurance company may point to exclusions to deny your claim. For legal advice about travel insurance protection, talk to an insurance law attorney.

Understanding What Is Covered in Your Travel Insurance Policy

A travel insurance policy is a legal contract with an insurance company. To get the benefit of your insurance premiums, you must understand the fine print, including coverage limits, the claims process, and what to do if your claim is denied.

When you leave the United States for international travel, many of your existing insurance policies won’t cover certain types of claims, including car accidents or medical emergencies.

Standard travel insurance can cover common losses and claims while traveling, including:

• Emergency medical coverage
• Medical evacuation
• Trip delays and cancellations
• Lost baggage
• Rental car accidents
• Cruise line or tour operator cancellations

Emergency Medical Care

Many health insurance providers do not extend coverage outside the United States. If you need emergency medical care while abroad, you may have to pay out of pocket. In some countries, you have to pay for emergency care directly to the medical facility before getting treatment.

Check your health insurance coverage before taking a trip to see if it provides emergency medical care while overseas.

Trip Cancellation or Trip Interruption

Trip cancellation and travel delays are the most common types of travel insurance claims. You may have an upcoming trip cancelled because of an illness, job loss, or the death of a family member.

For trip cancellation coverage, the reason for cancellation must be covered by your policy.

Baggage Loss

Airlines generally provide minimum protections for lost luggage or baggage delays. The U.S. Department of Transportation requires domestic airlines to provide baggage liability up to $4,700 per passenger.

Travel insurance also has coverage limits for lost or delayed baggage. You may need to make your claim through the airline before you can get additional coverage from your travel insurance provider.

Pandemics and Natural Disasters

Travel insurance may cover cancellations or trip delays related to natural disasters, pandemics, or severe weather.

However, if there are reports of the risks ahead of time, claims are subject to exclusion. For example, say there are reports of a pandemic before you book a trip. You book anyways and then the pandemic gets worse, forcing you to cancel your trip. The insurance company may deny the claim because it was a known risk before you bought the flight.

Travel Insurance Coverage Exclusions

Most insurance policies have exclusions for claims that the insurance company will not cover. Make sure you understand what is and is not covered. Coverage exemptions can include:

• High-risk activities (like skydiving or scuba diving)
• Accidents while under the influence of drugs or alcohol
• Travel to countries with travel warnings or safety advisories
• Pre-existing medical conditions
• Elective medical expenses
• Losses due to negligence

If you need certain types of coverage, check with another insurance company or see if you can buy a supplemental policy to cover what you need. Understanding the exclusions can also help make sure you gather the right evidence to submit with your trip insurance claim.

Some insurance plans offer “cancel for any reason” (CFAR) policies. CFAR travel insurance covers cancellations for uncovered reasons. Most insurance plans only protect against unexpected events. If you cancel for something you expected, you may need CFAR coverage.

CFAR coverage usually costs more than standard travel insurance plans. However, it could offer additional protection if you have an uncommon reason to cancel your trip.

Existing Travel Insurance Benefits With Airlines and Credit Cards

Airlines, homeowner insurance, and credit cards may already offer travel protections without having to buy additional insurance. For example, U.S. federal law requires airlines to provide lost baggage liability coverage. The European Union requires airlines to provide compensation for qualifying flight delays or cancellations.

A rental or homeowner insurance policy may also provide benefits for some types of travel claims, including damaged personal items and stolen property.

Many credit card providers offer basic travel protection when you buy your flight, hotel, or travel services using your credit card. To get trip protection, you must buy the travel service with your card. Travel insurance benefits can vary by the type of card, with more expensive annual fees generally offering greater protection. You may not need additional travel insurance if your credit card already offers similar protections.

The credit card companies usually offer these travel benefits by contracting with an insurance company, so you may have to go through the same type of claim process.

The Legal Definition of “Reasonable Efforts”

A common policy in travel insurance agreements requires you to make reasonable efforts to get a refund from your vendors before making a claim. This is also a common clause that travel insurance companies cite when denying a claim.

For example, you cancel an international travel flight because of an illness. You must make a reasonable attempt to get a refund or credit for the airfare before making an insurance claim for the money you paid for the flight. If you just file a claim without contacting the airline, the insurance company may deny your claim because you did not take reasonable efforts to get your money back.

To demonstrate reasonable efforts, you may need evidence of your attempts, such as communications with the airline, cruise line, or hotel denying a refund.

The Process for Filing a Travel Insurance Claim

Contact your insurance company to make a claim by phone or online. Most people make travel insurance claims online through the insurance company website.

Gathering all the necessary documentation is generally the most difficult part of making a claim. Evidence to gather for your claim includes:

• Proof of travel
• Receipts for all expenses and costs
• Copies of cancellation policies
• Medical records
• Bank and credit card statements
• Photographs or videos

When you submit your claim, write down your claim number. You may need this when you contact the insurance company for an update on your claim. The next part of the process usually involves waiting. The insurance company may contact you to ask for more information or additional evidence to support your claim.

If the insurance company accepts your claim, you should get a reimbursement for nonrefundable trip costs.

Commons Reasons for Travel Insurance Claim Denial

The insurance company may deny your claim for various reasons. The most common reasons to deny a travel insurance claim include:

• Losses are not covered by the insurance policy
• You did not make reasonable efforts to get a refund
• Cause for cancellation was not unexpected
• Claim is filed after the deadline
• Losses occurred outside the coverage window
• Lack of documentation

If the insurance company wrongly denies your claim, you can turn to a lawyer for help. An experienced attorney can review your denial letter and identify what you need to get your claim approved.

Get Legal Help for Your Travel Insurance Claim

Your attorney can deal directly with the insurance company to get a payment or negotiate a settlement. If necessary, your attorney can take legal action against the insurance provider for compensation. Contact an experienced insurance lawyer for help with your travel insurance claim.