Friday, August 23, 2013

Travel Insurance Nightmare - Why You Should Not Buy By Price And Why You Need to Know ALL of Your Options

Purchasing travel insurance is a dilemma.  You are betting something bad is going to happen and the insurer is betting you will be just fine.  With travel insurance you need to be especially careful because you have to consider what happens if you are injured or have a serious medical emergency in a foreign country where the medical care is not up to the standards or needs you may have.

While I tell every client that asks me:  I do not give you advice on which health, life, auto or homeowner's insurance you should purchase, so I can't give you advice as to what coverages you actually need.  But what I can tell you is that shopping by price and the basic coverages can be dangerous...especially if you are traveling to an exotic location.  What you should consider is which travel insurance companies have a history of providing coverage and which ones tend to find limitations or exclusions where others don't.  And that is worth far more than saving a few dollars.

With that background, I just read the following article:  Travel Agent Upset with Azamara/Insurer; Assists Elderly Azamara Guest with Medical Dilemma Overseas .  It is the scenario that I warn my clients about:  An elderly well-traveled client is traveling on a cruise in an exotic area with relatively rudimentary medical care available on shore.  Early one morning he broke his hip and required to be taken to the hospital. The problem is that the hospital did not have the facilities to take care of this elderly man's broken hip and did not even have enough of his type of blood.

While the jury is out on whether Azamara Club Cruises should have had a staff member stay with the elderly couple to assist them practically and emotionally, the fact is this poor man was in need of significant medical care, with virtually no ability to communicate with the local health providers, and a facility that could not truly assist him.

And so began an ordeal of getting this man to the proper facility and who is going to pay for it.

The man had purchased the basic cruise line insurance and, it seems, did not have sufficient regular medical insurance to take over where the travel insurance lapsed.  Meanwhile, as he needed to be transferred to an Istanbul hospital and then onward to the United States, he remained in a rural facility suffering and not receiving the care he required.

How do you avoid this?  Make sure your travel agent knows of all relevant travel insurance options...and if he/she does not, find them out yourself.  Understand that travel agents are not insurance brokers.  They merely sell travel insurance policies.

Here the travel agent claimed that there were no options other than Azamara Club Cruises insurance because it was a "free" cruise.  While this was a "free" cruise, there were other and supplementary options; annual plans, blanket polices, etc. that were available to this man...not that it is the average travel agent's responsibility to be an expert on all of this.

Especially if you are elderly or somewhat infirm check out credit card benefits. Many of the Platinum level cards (such as American Express) have excellent emergency medical repatriation benefits; so even if you are only paying the taxes on your free cruise, by having and using the right credit card you may well have some great coverage.  Yes the credit cards have an annual fee, but it can be very inexpensive insurance for the elderly or infirm traveler; or any traveler.

By combining annual travel insurance packages, cruise line or other third party travel insurance, credit card benefits and your regular medical insurance benefits, a lot of the ordeal and concern over what options are available (ex. Can I be flown in an air ambulance back to the US?) who is paying for what could have been eliminated or significantly reduced.

And, remember, most cruise line insurance is not your best option because the insurance company really works with  the cruise line; not you.  So that great price -especially if elderly or infirm- probably is penny wise and pound foolish.  Remember the old saying, "It the prices seems too good, there probably is a reason."

Does that mean everyone over 75 should pay thousands of dollars for travel insurance?  No, it means:

  • You should pay with the right credit card;
  • You should check your regular medical insurance benefits when traveling overseas;
  • You should consider an annual or blanket travel insurance policy;
  • You should compare coverages not for the common claims, but - like here - the extraordinary ones; 
  • You should NEVER purchase coverages based significantly upon price.
Yes, there are websites out there that compare coverages to some degree, but you need to be sure that you do your homework (not a website or your travel agent) and look beyond a chart and pricing matrix.

And one final thought to consider:  When you are faced with a medical crisis, many times it is more important to get the care than to get the coverage.  You always have the right to fight over money later, but if you really need (not just want) to get to a better facility it may make more sense to pay for it out of your pocket and deal with coverage issues later.  Having a condition worsen so that you have permanent damage (or even possibly die) because you are fighting over insurance is probably not your best approach.