Traveler’s insurance: Never leave home without it

The Travel Advisor: So whatever you do – and wherever you go – when you plunk down the money for your ticket, purchase your traveler’s insurance that covers the entire trip.

By MARK FELDMAN
Epcot Center in Orlando, Florida 311 (photo credit: Gary Ambrose/Los Angeles Times/MCT)
Epcot Center in Orlando, Florida 311
(photo credit: Gary Ambrose/Los Angeles Times/MCT)
Few of you will remember one of the earliest companies to offer traveler’s insurance. It was in 1864 in Hartford, Connecticut, that “Travelers” was founded.
Along the way it had many industry firsts, including the first automobile policy, the first commercial airline policy and the first policy for space travel.
For those of you who can recollect their achievements, I salute you on your immortality. To everyone else, it is widely advisable to purchase traveler’s insurance.
In fact it’s downright foolish to rely upon your good health and luck prior to your trip and assume that if you haven’t needed it in the past, you can save the small expenditure and travel worry free.
There are three major components of most travel-insurance policies:
1 Health issues, be it doctors visits or hospitalization.
2 Loss or theft of one’s personal belongings.
3 Trip Cancellation.
Inevitably, whether you purchase your travel arrangements through a travel consultant, from an airline or online you are asked ever-so politely, “Do you require insurance?” And like so many items, you declare that you’ll do it closer to your departure date. A fool and his money are easily parted.
In fact, more times than not, clients are completely certain that travelers insurance just covers health-related issues. A far smaller number are aware that their personal belongings are also protected against an airline losing them, or a thief ransacking their hotel room.
It’s the rare client who is aware that most policies also cover trip cancellation.
For example: Koby, his wife and their two kids planned their late summer trip to Orlando. Studiously reviewing every possible option months in advance, he plunked down over $10,000 dollars for airfares, hotel rooms, rental cars and a four-day Carnival cruise. Several times during the course of his two months of planning he was asked about health insurance, and Koby intelligently decided to arrange it.
Sadly, 10 days before they were due to fly, his son became very sick and was hospitalized. Initially diagnosed as walking pneumonia, Koby was told his son would be well enough to fly. However three days later, his situation became critical and required liquids intravenously due to severe dehydration.
Hospitalized once again, it dawned on Koby that the trip was not going to take place as planned. Tests were ordered to discover the source of his illness. A proper diagnosis would take weeks. His son’s condition was not improving.
Incredulously, he went over to his HMO, Kupat Cholim Clalit and innocently asked if he could get health insurance. Rebuffed by the very first question of: “Has anyone in your travelling party been hospitalized in the last 6 months?,” a sinking feeling that he had a serious financial problem began to dawn in his now-fertile mind. He left the counter without saying a word.
Koby had purchased the following:
❖ Four round trip El Al tickets to New York.
❖ Four Delta tickets from New York to Orlando, and back to New York.
❖ A junior suite at the Walt Disney World Swan Hotel.
❖ Six-day rental car with Alamo.
❖ Four-day cruise from Orlando.
He contacted us after his travel consultant gave him the hard figures: El Al would charge him $240 each to cancel the tickets; Delta wouldn’t give him a penny back of the $1,196 ($299 each) that he had paid; Walt Disney said they would only charge a one-night cancellation fee, as it was during the high season; Alamo said he could cancel and get everything back but $10; and the cruise company stated he wouldn’t get anything back from the $2,300 he paid.
In other words if he cancelled, he would lose $4,766! His travel consultant confirmed that he had offered Koby travelers insurance when he purchased the tickets two months earlier. He had warned him that both the Delta tickets and the cruise were 100 percent non-refundable. Koby didn’t argue, but felt these circumstances warranted some flexibility.
A quick call to both El AL and Delta produced great sympathy, and they were quite happy to allow him to extend his tickets for one year – without any penalty – due to the situation.
The cruise company, Carnival, also allowed him to postpone the cruise for 12 months.
Of course, none of this mattered as his eldest child is going into the army in three months and Koby’s new job next month will leave him with little free time. Therefore, while these suppliers tried to placate him, he will probably suffer a large financial loss.
By purchasing health insurance, he would have received every dollar back, minus a $50 deductible.
Yes, that’s right: His trip-cancellation clause, covers planes, boats, hotels and any other item connected with one’s trip. If he had paid for a private tour, this too would have been covered.
Traveler’s insurance policies are offered by your travel consultant, your Kupat Holim, your credit card and even your friendly insurance agent.
They can be purchased two months prior to your departure.
There are countless prices and coverage’s that exist, so it behooves you to compare.
Here’s what the minimum adult policy should cover:
❖ Hospitalization expenses: $500,000.
❖ Deterioration of an existing illness: $200,000.
❖ Medical flight (air ambulance) full coverage personal accident: $15,000.
❖ Third-party liability: $100,000.
❖ Luggage: $1,750.
❖ Theft of break-in to car: $ 500.
❖ Late arrival of luggage: $150.
❖ Trip cancellation/shortening of trip: $5,000.
❖ Travel ticket: $2,000.
❖ Escort for travel: $1,000.
Remember, this is coverage per person, but in Koby’s case, because of his son, all four of them had to cancel – and all four of them would have been covered. In fact, Koby would have had $20,000 of trip cancellation coverage if he had purchased the insurance.
I’m not here to tout insurance companies; reading the small print will give many examples where they don’t reimburse.
My personal favorite is accidents that the insurer himself caused. For example, if you ran a red light and this resulted in bodily injuries: no coverage. If you drank beyond the legal limit and injured yourself: no coverage.
But the golden rule – of which there are very few exceptions – is if someone in your immediate family is hospitalized and you cannot travel, you will be provided full compensation.
One caveat: immediate family means through a bloodline (father, mother, sister, brother, son or daughter) or spouse. Indeed, many policies will not pay if your lifelong companion falls ill. He or she will be reimbursed, the partner will not.
One more woeful tale to cement my position.
A tourist from South America purchased a ticket to visit her family in Israel. Too preoccupied to deal with insurance from there, her family here diligently purchased her a policy through a local Israeli insurance agency covering any potential emergency that could occur during her visit here.
After a glorious healthy month in the Holy Land, she boarded her plane flying her from Tel Aviv to Madrid, and on to Lima. Sadly a few hours outside of Madrid, she suffered a debilitating stroke on the plane and the airline was forced to land in Manaus, Brazil.
Immediately hospitalized, LAN Airlines took care of her every need until her son was able to fly from Tel Aviv to assist her.
Realizing the huge medical bills that awaited them, the daughter-in-law called our office asking if the airline was legally liable, as she couldn’t believe how wonderful they had been.
She innocently assumed they were being so helpful because they were liable. She also stoically accepted the fact that her mother-in-law’s insurance should have originated from Lima, so that her flights would also be covered.
And, she knew full well that the health insurance she had arranged only covered her while she was in Israel.
However, she was in shock when she discovered that as great as LAN Airlines had been in making an emergency stop, and arranging for her mother-in-law to be hospitalized, odds were very good they would soon send her the bill for their largesse! So whatever you do – and wherever you go – when you plunk down the money for your ticket, purchase your traveler’s insurance that covers the entire trip.
Mark Feldman is the CEO of Ziontours, Jerusalem. For questions & comments, e-mail him at mark.feldman@ziontours.co.il