Top 5 Reasons To Buy Travel Insurance

Booking a trip can be hectic – booking flights, reserving a rental car, booking hotels, and deciding on tours or excursions. For many people, buying travel insurance usually isn’t top of mind with all the other details that need to be handled. However, buying travel insurance soon after booking your trip can pay big dividends.

Many people are of the mistaken belief that you only have 14 days from your deposit date to buy travel insurance and then you’re out of luck. While this isn’t true – you can purchase travel insurance up to 24 hours prior to departure, you’ll still want to purchase insurance right after booking your trip. Here’s why:

You can save money

Several factors affect the cost of travel insurance, including your age, trip cost, destination, and trip length. Besides what you purchase, insurance providers also care about when you purchase. In fact, travel insurance is often cheapest when you purchase within 21 days of making your first trip deposit. Some policies have dynamic pricing, so they change premium on a daily basis. Waiting until you’re closer to your departure date to buy travel insurance may mean increased premiums, especially with these dynamic policies. Trip costs have been increasing, especially after COVID, but purchasing insurance early can often save you hundreds.

Tip: Shop around before deciding on a policy. Instead of simply rushing into a purchase, spend some time comparing plans through sites like TravelDefenders to compare prices and benefits to figure out which policy works best for you. 

You can maximize your coverage

A common misconception about travel insurance is that it only starts when you leave for your trip. Travel insurance actually goes into effect the day after you purchase it – called the “effective date”. Trip cancellation benefits begin at this point. By purchasing your policy right after booking your trip, you can maximize the coverage time.

Here's an example of how this can be beneficial:

Let’s say, you’re going on a trip in August and had an auto accident in June and broke your leg in several places. You’re still hobbling around and in pain in August. If you’re not medically fit to travel for the trip, you may be eligible to cancel the trip and get a refund of your nonrefundable trip costs if you purchased travel insurance before the injury happened. Purchasing travel insurance early can give you peace of mind in case a sudden illness or injury happens before or during your trip.

You can purchase certain upgrades

With options for travel insurance available, travelers should be able to find a policy that best fits their needs and budget. Some options that may be desired or needed are only available for a short time after an initial trip payment.

Benefit upgrades like Cancel For Any Reason (CFAR), Interruption For Any Reason (IFAR) and a waiver of pre-existing medical conditions are the most well-known and important of these time sensitive benefits.

Cancel For Any Reason (CFAR)

Standard trip cancellation insurance can reimburse you for prepaid, nonrefundable trip costs if you need to cancel your trip prior to departure. However, to get a refund of these trip costs, the cancellation must be for an eligible reason listed in your policy, such as a serious medical problem, death in the family or extreme weather.

However, some travel insurance companies offer Cancel For Any Reason (CFAR) coverage which can be added to their standard policy as long as it is added within a certain time period. CFAR offers partial reimbursement for a canceled trip (50-75% of prepaid and nonrefundable expenses) if you have insured 100% of your non-refundable trip costs and cancel the trip within 48 hours prior to trip departure.

CFAR coverage usually must be purchased within 10-21 days (depending on policy) from your first trip payment. This is your window of opportunity to add this benefit. If you wait until after this period closes, you won’t be able to add CFAR to your policy and can risk losing your nonrefundable trip costs if you have to cancel your trip for a non-listed reason.

What is the reason you may want to purchase the CFAR benefit, especially since it adds to the premium and the reimbursement is only 50% - 75% or the trip costs (depending on the policy purchased)?

You’re concerned that you may need to cancel the trip for a non-listed reason. These could be reasons such as being fearful of traveling to your destination due to concerns such as war breaking out, another pandemic like COVID occurring or getting into a fight with your traveling companion and not wanting to travel with them anymore. These reasons aren’t valid reasons listed in the policy but with a CFAR policy you could cancel for these reasons and receive a partial refund (50% or 75% depending on the policy chosen).

However, if the reasons you think you would cancel ARE listed in the policy, then you may not need to add the CFAR benefit.

Be aware that any refundable expenses will not be reimbursed by the insurance company, even with a CFAR benefit included. For example, if you purchased refundable airline tickets or used points or miles for ticket purchases, these costs will NOT be reimbursed by insurance as you can get reimbursement elsewhere.

Interruption For Any Reason (IFAR)

Trip Interruption For Any Reason (IFAR) coverage is an add-on benefit for travelers who have trip interruption coverage in their policy. By purchasing the IFAR benefit if available, you can file a claim for reimbursement for an interrupted trip no matter the reason. For example, if your Airbnb is not what you expected and you want to go home, IFAR can help you pay for a last-minute flight home and recoup a portion of the prepaid, nonrefundable expenses remaining. 

Similar to CFAR, IFAR benefits must be purchased usually within 20 - 21 days (depending on policy) from your initial trip deposit, and 100% of your trip must be insured. Also, you must be at least 48 hours into the trip before you can use the IFAR benefits, so be aware of this restriction. Ensure that your trip is long enough to meet the 48-hour requirement before deciding to purchase IFAR coverage.

You can get coverage for pre-existing medical conditions

Standard travel insurance policies exclude coverage for pre-existing medical conditions, which can include illnesses, injuries, changes in medicine dosages, diseases or other types of medical conditions that existed before the policy was purchased and effective. If you receive treatment for them during your trip – including hospitalization, getting medications, lab work etc., those charges will not be covered by standard travel medical insurance.

To have pre-existing conditions covered, you need to purchase a policy that includes a waiver to cover pre-existing conditions. Most policies will automatically provide this waiver if the policy is purchased within 14-21 days from your initial trip payment – called the ‘Time Sensitive Period”. You must also insure 100% of the nonrefundable trip costs.

If you purchase a policy outside this time sensitive period, with most policies you no longer can receive the waiver to cover pre-existing conditions. To determine if you have any conditions the insurance cannot cover, the insurer will look backwards in time from the day you purchased the policy anywhere from 60-180 days to check for pre-existing conditions. This period is called the “look-back” period.

If a claim is filed related to a pre-existing medical condition and the waiver has not been included in the policy, the insurer has the right to deny payment of the claim. For travelers with pre-existing conditions that need to be covered, be aware of the time sensitive period and be sure to purchase the policy with the waiver included during this time.

You can make updates to the policy

Often even after purchasing a policy, travel plans can change. Be aware that changes in your trip details may affect the travel insurance you purchased.

Most travel insurance companies let you change your policy details up to 24 hours before departure. You can update trip dates, costs, destinations and even spelling mistakes like names or birthdates for travelers.

When you do make a change to your travel insurance policy try to do so with enough time prior to departure so the insurer has time to make the changes and send out revised travel documents. Waiting until the last minute to make a change may result in the change not being made prior to departure which could affect benefits. Look for confirmation of the change in writing or use the insurer’s website or app to verify the change was made and is accurate.

As the total trip cost affects reimbursements, be sure your trip costs are correct. If your trip cost increases, your premium will usually increase as well. Check your policy prior to departure and print out the necessary documents such as ID card to take with you.

If circumstances change and you need to cancel your trip and your travel insurance policy, you’ll have between 10-15 days to do so from the time of purchase without incurring a penalty. This time period is called the ‘Free Look Period”. Be sure to carefully review your policy and ensure it provides the needed coverage during this time.

A travel insurance marketplace like TravelDefenders will offer a multitude of different plans from some of the most respected travel insurance carriers in the country. You will only need a few minutes to check value for money, coverage, and insurance carrier ratings. Shop early after your initial booking and save.

Safe travels