Travel insurance is a bit of a question mark for many fiscally aware small business owners- should you get it, do you really need it, is it worth the cost? But when you’re facing a travel disaster like a volcanic eruption, a traffic accident, or an injured business partner, travel insurance can make all the difference between coming home broke and snapping back to get that next business deal.
1. Avoid ‘opt-out’ travel insurance altogether. While many legislative groups are working to ban ‘opt-out’ travel insurance sales, some travel booking websites still have them and these plans cause a lot of problems for travelers.
Purchasing your travel insurance while booking your reservation is a dangerous game because the checkout process is not the best place for understanding the policy’s terms and conditions. After all, you are in a hurry to score the travel deal and you don’t have time to review the plan details.
2. Don’t assume your credit card has the coverage you need. Many business travelers make this mistake because they read their card has ‘travel protection’ and they think they have what they need. Unfortunately, most credit card travel protection does not deliver the same protection as travel insurance.
In fact, credit card travel protection includes little to no medical or evacuation coverage, very limited reasons for trip cancellations and interruptions, and almost no coverage for travel delays.
3. Do use your credit card protection where it fits. Credit card travel protection is similar to travel insurance when it comes to rental car protection, lost or damaged baggage, and AD&D or flight accident insurance.
In addition, most credit card plans also have similar emergency travel assistance and business concierge benefits, so you can save some money by relying on your credit card for this coverage.
4. Don’t ignore pre-existing conditions. Many travelers get caught by this ‘loophole’ with their travel insurance and complain when their claims were denied due to a pre-existing medical condition. To be fair, travel insurance companies have to limit their liability, so this is the reason for the standard exclusion.
To avoid this problem, it’s important to remember recent illnesses, doctor’s visits, and prescription medication changes when you are choosing your travel insurance plan. If you have anything that may be identified as a pre-existing condition, or if you’ve had recent changes in your medications, then purchase a plan with a pre-existing condition waiver.
That goes for your business partner and family members too. If there’s a pre-existing condition that may cause you to have to cancel or abandon your trip (even if it’s not your own condition), you’ll need the waiver with your travel insurance plan.
5. Check the plan’s covered reasons and exclusions. All insurance plans have exclusions, and travel insurance is no different. If you really want to protect your business travel investment, you have to read the plan’s exclusions and know the limits of your coverage.
For example, if your business travel plans take you overseas, does your travel insurance plan cover your medical care if you are injured or become ill? Does it allow you to cancel a trip if your business partner is ill or critically injured and you have to cover his or her responsibilities? You’ll know by reading the exclusions and covered reasons.
6. Purchase your plan early. Many travelers fail to think about travel insurance until they see a problem with their trip: i.e. a hurricane warning is issued, someone has to go to the hospital, a terrorist attack occurs, etc. Travel insurance, like any other type of insurance, can only cover things that haven’t happened yet, so purchasing it early is key.
Purchasing your travel insurance plan soon (within days) after making your first trip payment also gives you at least one important benefit: specifically, your plan is more likely to include coverage that is typically excluded, like the pre-existing condition waiver, or the option to purchase add-on coverage, like ‘cancel for any reason’.
7. Don’t insure refundable trip costs. Some trip costs are refundable, depending on the circumstances, and some are not. If your flight is cancelled, for example, and the airline issues you a full-price voucher for future travel, there is no cash loss and your travel insurance plan has no obligation to provide further reimbursement.
Travel insurance plans only refund non-refundable cash losses, so refundable trip costs should not be considered in your total trip cost because it’s unnecessary and simply raises your premium price unnecessarily.
8. Don’t buy too much evacuation or accident coverage. Medically necessary evacuations are expensive, no doubt about it, and this is not a travel expense you want to put on your credit card. That said, purchase a travel insurance policy with several million dollars of evacuation coverage and you’re over-insured (and paying too much).
It’s rare for a medical evacuation to cost more than a couple hundred thousand dollars ($100,000 – $200,000 is usually enough). The same is true for travel accident coverage. You don’t need it with your travel plan if you have adequate life insurance and AD&D protection already.
9. Do compare travel insurance plans. To find the best rates on a travel insurance plan, harness the power of a web-based travel insurance comparison site. While each website is designed a little differently, they all ask for a few travel details: trip dates, trip cost, number of people, their ages, etc., and then display a list of travel insurance plans that fit your needs.
You can also check out the optional coverage, review the plan details and exclusions, and make a purchase.
10. Double check your trip details. Some travelers make the mistake of quickly submitting trip details without double checking them. Travel start and return dates, travelers’ ages, destination, and total trip cost are all key to a valid travel insurance policy.
All travel insurance plans automatically include a free review period which you can use to read the policy and make sure the plan will fit your needs. In fact, most disagreements over denied claims can be avoided simply by understanding your policy and what it does, and does not, cover.
If you’ve made a mistake or made changes in your trip plans, contact the company during the review period and get it fixed. Or cancel the policy and get a new one (it costs just a few dollars).
11. Consider an annual plan if you travel often or on short notice. Some travelers – especially business travelers – find that purchasing an annual travel insurance plan saves them time and money. Plus, if you’re a last-minute traveler, having the same plan all year long means less work putting together your travel documents and just one number to call when you need assistance.
Annual plans are sometimes limited to a certain number of trips, and trips covered by annual plans may have time limits but they’re long (often as high as 90 days), so they don’t typically cause a problem for business travelers.
Damian Tysdal founded TravelInsuranceReview in 2006 on the belief that travel insurance should be easier to understand. Small business owners should bookmark the BusinessTravelInsurance tutorial for questions about coverage and the best plans for business travelers.