Loopholes of Travel Insurance

Did you know that people who buy travel insurance tend to be well-educated, travel more frequently and have higher household incomes than those who don’t? This is what an interesting consumer study from the US Travel Insurance Association (UStiA) had to say. The rising cost of international tripss, increased incidents of natural calamities, lost baggage, terrorist acts, aging and sky rocketing medical costs in countries like the US, have all led to the awareness of the need for protection against unforeseen events in a foreign land. The study also added that consumers travelling overseas are three times more likely to buy insurance than those travelling domestically.

Yes, today’s consumer has become much wiser than before. As an informed citizen, I find it rather satisfying that a large number of people are motivated to invest in visitor’s insurance to protect their investments, made towards a trip, which are usually prepaid and non-refundable in nature. This is also great for peace of mind, of course, which was not the case earlier.

However, your wisdom is of no use if you didn’t invest your time in comparing various insurance plans before settling on one. This is because of each visitor’s insurance plan offers different types of coverage. But what can be most concerning for travellers is the exclusions that also vary with the plan. As exclusion, a policy eliminates coverage for some type of risk. It would be highly disappointing if your claim is rejected because some incident was excluded from the policy, which you were not aware of at the time of purchase.

These exclusions may vary depending on the specific product, which makes it necessary to go through the terms and conditions of the various policies in detail. However, there are some exclusions that are standard. Here’s a look at them.

Exclusions Common to Most Visitor’s Insurance

  1. Sudden Recurrence of a Pre-Existing Medical Condition:
    You should know that pre-existing medical conditions are unlikely to be covered under most types of travel insurance, especially mental disorders like depression and dementia. Talk to the insurance company to clearly understand what’s covered and what’s not.
  2. Risky Adventure Sports:
    Did you know that the global adventure tourism market is projected to grow at a CAGR of around 46% by 2020? According to market research published by Technovia, people are increasingly travelling to countries like Switzerland, Germany, Canada, Iceland and New Zealand to try adventure sports, such as mountain climbing, skydiving, surfing, caving and deep-sea diving, which is expected to drive the market up in the coming years. However, these thrill-seekers might have to face disappointment with travel insurance, since high-risk sporting activities are not covered by most plans.
  3. Injuries as a Result of Intoxication:
    You are unlikely to be covered for an accident, injury or ailment that occurs under the influence of alcohol or due to intoxication. Moreover, any losses due to civil unrest, drugs and self-inflicted injury will also not be covered by travel insurance.
  4. Loss of Highly Expensive Items:
    Although travel insurance companies do compensate policy holders for lost baggage, most companies are wary of covering expensive items like jewelry, electronics, cameras and more. Do read the fine print of the policy to know the list.
  5. Trip Cancelation or Interruption due to a Non-Covered Reason:
    Every insurance provider sets out a list of covered reasons for cancellation or interruption that are eligible for a reimbursement. You should learn about this list.

Although such exclusion is standard, some travel insurance plans allow you to buy an optional rider at an added cost, to provide protection for some such exclusions.

All the best!

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Mani Karthik

About the Author

Mani Karthik

Ex “NRI” and Founder of the “Back to India” movement. I share my experience about immigrating to USA here.

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