Travel Insurance 101

Ensure peace of mind with coverage that suits your family’s needs

No trip abroad should be taken without some form of insurance. It’s the last thing you want to think about when planning a fun-filled family getaway, but mishaps do happen ranging from loss of baggage to loss of life.

Children are particularly illness and boo-boo prone, and incidents like natural disasters, work crises and tour operator bankruptcy are unpredictable. Having a policy that can cover you for a spectrum of snafus can give you peace of mind that you won’t be further burdened financially should an unfortunate event occur.

The insurance business is murky and convoluted, so speak to a qualified broker/agent to get the full details on your coverage needs. Look for a comprehensive policy that’ll cover you for a wide range of situations, and read the fine print for all conditions, restrictions and exclusions involved.

Here is an overview of some points to consider when shopping for travel insurance for your family.

Check Your Current Coverage
First, look into your existing household insurance policy to see what it covers, if anything, when you’re abroad. Some all-risk policies might reimburse you for lost, stolen or damaged personal belongings while traveling (such as a laptop, camera etc). Read the details on your health insurance policy, too. It may be null and void the second you step off your native soil, or it may pay out for medical care up to what treatment would have cost back home (which may be grossly insufficient).

If you’re a member of an auto association, you might have some coverage through that so read up on the details. Check the fine print in your credit card agreement, too. Some provide insurance for things like car rentals, travel tickets and purchases bought with that card.

Some credit cards bundle travel accident insurance into their package of benefits, but this is usually a bare-minimum policy that only covers you for, say, an accident that specifically occurred while embarking or disembarking from a mode of transportation paid for on that card and resulted in death.

Some premium fee-based credit cards have more comprehensive travel insurance coverage, but often the fees are more and the coverage less than just taking out a stand-alone policy. Do your homework and don’t be caught by plastic policy packages that fail to properly protect you and your family.

Annual Policy vs. Single Trip Coverage
If you plan to take more than one out-of-country jaunt per year, an annual policy is more cost-efficient than one that covers you for the duration of a single trip. However, if one trip is all you expect to take, single trip coverage for that specific getaway is the way to go. Some insurance companies have plans for various durations – like 30, 90, or 180 days – where you can take multiple trips within that timeline. Shop around and see what best suits your family’s needs.

Family Coverage
A family policy usually includes two adults and four dependent children up to the age of 16 or 18. Some companies include common law partners and grandparents or extended family traveling with you as well. This is usually more efficient than securing separate policies for individual family members.

Travel Medical
This is perhaps the most important type of insurance to consider, as no one is immune to medical emergencies, be it from accident or illness. Children are particularly susceptible to ailments and missteps, and you want to be prepared to financially handle everything from a skinned knee to full blown meningitis while overseas.

Your state/province/national health policy is most likely insufficient to handle out of country medical expenses and so supplementary coverage is advised (even domestic travel might warrant a top-up on coverage as obtaining medical care out of your usual jurisdiction or network usually entails out of pocket expenses). Traveling families to the US should be particularly vigilant on this front, as medical care there can be steep.

Always disclose pre-existing medical conditions as inadvertent omissions can come back to bite you when making a claim. Optional Riders on these policies can cover emergency medical evacuation if you need to get back home for treatment and, gruesome as it is to think about, repatriation of remains.

Accidental Death and Dismemberment
This pays out a lump sum to you or a beneficiary should someone lose their life or a body part while on the covered trip.

Trip Cancellation
If you find you can’t travel for whatever reason (work crisis, junior’s chicken pox, death in the family), trip cancellation insurance can reimburse you for the non-refundable portions of a prepaid journey.

Trip Interruption
If you have to return home sooner than expected, trip interruption insurance can cover you for certain expenses. For example, should your mother-in-law break a hip or your house be flooded, this insurance can pay for a short-notice ticket for everyone to head back home and deal with the situation.

Flight Delay or Cancellation
Air travel with kids is tough at the best of times, but add a flight delay, cancellation, missed connection or airline strike into the mix and you could be caught stranded for quite some time. An insurance policy can help compensate you for unanticipated airport hotel stays, meals and miscellaneous expenses as you try to get back on track.

Default/Bankruptcy
It does happen. You pay your non-refundable deposit or pay upfront in full and then the airline, cruise line, hotel or tour company goes bankrupt. This kind of vendor default insurance can help protect your vacation investment.

Baggage
When you’re traveling with kids, having your baggage and belongings go astray can seriously inconvenience your vacation. Whether through delay, loss, damage or theft, baggage insurance can save the day by giving you enough funds replace personal effects and get you through the trip.

Weather
Some policies (or optional Riders) include contingencies for inclement weather. For example, if you and your family are traveling to the Caribbean during hurricane season (June 1 to November 30) you might consider insurance on this front in case you need to cancel your trip or evacuate home ahead of a storm. Some tour packages to this region include some form of weather guarantee or make-good should the winds blow.

Terrorism and Acts of War
An unfortunate sign of the times, travel insurance policies often include some mention of terrorism or acts of war – usually to say that damages incurred through them are not included. There are a few companies, however, that offer some compensation for these extreme events, but often they are void if you travel to an area that has a published advisory or warning against visiting there in the first place (war zones and terrorist targets are not usually top draws for family travelers, but you never know). As always, check the fine print.

Travelers’ Assistance
Having some kind of 24/7 hotline to call during a crisis is a key service that provide peace of mind when you’re abroad. A friendly voice that can walk you through the claims process, refer you to a nearby medical clinic, recommend legal council, provide translation assistance, help you reissue lost tickets or even provide travel recommendations will be helpful if you’re stressed and in the throws of a minor or major emergency.

Document Everything
Make sure you understand what kind of documentation is required to verify a claim. Because of an increase in fraud, insurance companies are getting more stringent on their rules and regulations and may require things like original receipts of purchases or photographic evidence that you brought things with you. You may have to prove that you took “reasonable care” with your health and belongings before a claim will be awarded, which is open to interpretation.

Read the Fine Print
Can’t stress this enough – read the fine print and know exactly what is included or excluded in your policy. There are stipulations, restrictions, conditions and exclusions all over it. Pregnancy, for example, is often excluded. Pre-existing medical conditions must be disclosed. Sports injuries and risky activities are often excluded (adventure-seekers should keep that in mind when planning a rafting or rock climbing trip).

If you plan to scuba dive, get a supplementary policy to cover you for that activity (see DAN). Know what the maximum coverage is for your particular premium, and be aware of any deductibles or co-payments required when submitting a claim. Most countries make you pay upfront for services and let the insurance company reimburse you.

All this may sound complicated but it’s worth wrapping your head around. The unexpected can happen when you least expect it, and it’s important to minimize the financial risks of family travel.