Welcome, readers! This is Abri News, where you’ll find helpful policy information to assist you in finding the best coverage for your needs. We cover a variety of topics here, including insurance plans, types of coverage, claim adjustments, conditions and clauses. Our agency aims to pair individuals with the best insurance package for their specific needs, which is why we carry every type of insurance you can imagine. From homeowners’ insurance to workers’ compensation to pet insurance—we have you covered! It’s our job to shop around, compare rates, and set you up with the level of coverage you need to feel safe and secure. Our clients enjoy our one-on-one approach and attention to detail. For testimonials, information about our services, or to request a quote, take a look around our website!
Our last article was an in-depth explanation on how to vet insurance companies. Choosing the best insurance company boils down to a handful of considerations, but the main factor in choosing the right company for your unique needs is research. There is a bevy of easily accessible information available on the internet and you can use this information to make your decision simpler. Similar to the sentiment expressed in our ‘How to Judge “Good” Coverage From “Bad” Coverage: Beyond the Quote’ article, the measure of an insurance policy is not to be found in the monthly premium alone. Although budget is a major consideration when choosing a policy, when choosing a company, you’ll want to take into account: reviews, complaints, ratings (which are informed in part by financial strength), and more. We left no stone uncovered in our guide to vetting insurance companies, because that’s what we do. As a full service, independent insurance agency, we only work with reputable insurance companies to provide you with the highest levels of customer service. What good is an insurance company who doesn’t show up promptly and effectively during your time of need? Before signing an agreement with a new insurance company, give our last article a quick read!
The pandemic took a sizable toll on a great number of industries. Supply chains are still reeling. The hospitality industry may never return to its former state. In the same vein, travel insurance has suffered in its own way. Traditionally, travel insurance has existed to provide coverage for the costs associated with traveling. On a small scale, paying a fee to insure the contents of your bag—should your luggage be lost during transit—is a form of travel insurance. Likewise, insuring the cost of your airplane tickets—should you have to cancel your trip for some unforeseen reason—is another common form of travel insurance. However, do not be mistaken. There is and has been an entire industry dedicated to insuring against potential losses incurred through travelling. Today, we’re discussing how the pandemic has affected the travel insurance industry and how these changes, ultimately, affect you. New packages are being offered to offset the risk of COVID-related cancellations and we’ll discuss those in more detail towards the end of the article. If you’re planning to travel in 2022 and want to be protected, this article is definitely for you!
How the Pandemic Affected Travel Insurance
The informal kinds of travel insurance mentioned above (i.e. bag protection, ticket refunds) aren’t exactly travel insurance. For example, say you booked a seven-day trip in Italy. You’d have checked multiple bags, bought round-trip tickets, booked seven nights at a hotel, scheduled excursions, and otherwise shelled out a fair share of money. Now, let’s say you booked this trip for the end of March 2020. Well, since the borders of both the United States and Italy have closed, it’s safe to say you aren’t going to Italy. Now, the question is: How much money are you going to be able to recoup? While you may be able to be refunded the price of your tickets and even your bags, chances are between 40% to 60% of everything else you spent is forfeit. Now, ordinarily, this is where travel insurance would come in.
However, most travel insurance companies began including exclusions for COVID-19 related losses in January of 2020. This is when the coronavirus became what’s called a “known event,” or a risk which could cause a large number of claims in a large number of places at once. As we explained in our ‘Insurance Policy Clauses You Need to Watch Out For’ article, insurers are well within their rights to add exclusions to the insurance agreement. That’s why it’s of the utmost importance to carefully read any agreement before signing. Now, where does this exclusion leave people who have lost money on canceled trips?
About 48% of Americans canceled their summer plans during the first year of the pandemic and, among these, nearly half lost at least $800 on nonrefundable costs. The pandemic shook up the travel world. As airlines struggled (or outright refused) to provide refunds for flights, the leisure and hospitality industries struggled to continue operations with almost no revenue. Amidst this chaos, consumers actually came away with a greater appreciation for travel insurance, with 40% of consumers (surveyed by ValuePenguin) saying they are more likely to purchase travel insurance in the future because of the coronavirus.
Now, travel insurance already had conditions in place which limited liability when “viral eruptions, epidemics, and/or pandemics” were involved. These clauses were spurred by outbreaks like the Swine flu, Ebola, SARS, and MERS. Similarly, certain travel insurance policies exclude coverage when losses can be attributed to an insured’s “fear of travel.” Which means—if an insurance company did cover pandemic-related losses—in the event you decided to cancel your own trip for safety reasons, they could not be liable to pay out any claim. You might be asking yourself, what good is travel insurance which does not cover the number one cause of canceled trips?
Travel Insurance’s Response to the Pandemic
There are two types of standard trip insurance. The first is known as “cancel for any reason” coverage (CFAR). As the name suggests, this type of policy allows the insured to cancel for almost any reason (with select exclusions and contingencies in effect). This is an expensive form of travel insurance, most often added onto an existing policy as an upgrade. Due to CFAR’s expensiveness, it’ll only account for up to 75% of the total cost of the trip. The most common exclusions for a CFAR policy are:
Consumers also seek flexibility, as opening and closing borders make for tenuous travel plans. As always, we recommend reading the fine print of any insurance agreement before signing, in order to understand the full ramifications of your policy. Or, work with an experienced insurance agency, which will sift through policy clauses and prioritize your interests for you.
At Abri Insurance, we prioritize the needs of our clients, foremost, and work diligently to find the policies and companies which will do the same. Whatever type of insurance you’re searching for, at whatever price point, we’ve got you covered! You can request an initial quote through our website. Let’s get to saving! We look forward to hearing from you. Until next time, thank you for reading!
While traveling might look a little differently this year, it's always smart to be prepared.
Traveling throughout 2020 has been such a strange and unique experience, and hasn't looked like anything we've ever seen before. For most, traveling has become something we've put on the back burner and will come back to once it's safe to do so again. However, even with that in mind, the most important thing to remember is that traveling as we've always known it will be back again. We will be able to enjoy every aspect of traveling again someday soon and will be enjoying our regularly scheduled vacation plans again. For now, it's just on pause. Until then, since we all have a little time on our hands, it's a great time to learn a little bit more about the many ways to keep you and your family safe the next time you're on your dream vacations. While you're dreaming about packing up your favorite overnight bag and the stack of books you want to read by the pool, we encourage you to start adding travel insurance to those thoughts and considerations.
One of our favorite topics is, of course, insurance, and it applies to every aspect of your life. In the spirit of celebrating the joy of travel and counting down the days until your next (safe) big trip, we wanted to chat about the truths and misconceptions of travel insurance. Myths and misconceptions on any topic are a dangerous road to go down. They can, sadly, cause hundreds of well-meaning people and travelers to make some not so smart decisions. Thanks to these myths floating around out there, travel insurance has gotten a pretty bad reputation that it's not needed and that it's a waste of time and money. Please know that these myths and misconceptions are called that for a reason and have been getting in the way of guaranteeing safe and fantastic trips for millions of people every year. Also keep in mind that if you are planning on traveling internationally, travel insurance is a necessity, and we wouldn't ever recommend getting on a plane without it.
Myth: My credit card offers plenty of protection while I'm traveling, and I won't need any more protection than that!
Fact: First and foremost, your travel credit cards only cover a few basic things, and in almost every situation they won't cover much if any healthcare if you get sick or injured while you're out of the country. If you're traveling inside of the United States, it still is very much the same. While your healthcare will be out of network while traveling more than 100 miles away from your home, most likely, it will still be better than traveling globally without any health insurance. If you choose to rely on your travel credit card as your travel insurance while you're away from home, please call and speak with your credit card company first, just so you know exactly what protection you'll have, if any! Even the best travel credit cards out there offer little more than protection for stolen items, loss of baggage, or a canceled trip. While some medical expenses could be covered, the coverage limit will be very low. The amount you could be spending out of pocket could be huge, and much more than you would be paying for a travel insurance plan. We urge you to speak with us or your insurance provider about some travel insurance on top of the protection your credit card offers. This way your medical needs, if by chance something does happen when you're away, can be taken care of much more affordably.
Myth: Travel insurance doesn't cover pre-existing conditions.
Fact: This is a moment where we need to pause and have you read the fine print on any travel insurance package. If you have a pre-existing condition, and you were healthy and stable before the start of your trip, travel insurance will help cover you for things you might need if something happens due to your pre-existing condition while you're traveling. If you need more medication or need to see a doctor because of it, travel insurance will help taking care of you with ease. When planning out a trip and you choose to sit down and talk with us at Abri or with your current insurance provider, make sure you pick an appropriate travel insurance plan with your specific needs and with your condition in mind. According to AAA, they encourage people to remember that the term "pre-existing" can be much broader than many people realize. Don't just dismiss the idea that your condition isn't included under the pre-existing bubble. Make sure to do your research! Also, please don't wait to get coverage for your pre-existing condition added to your travel insurance plan. You will need to apply for it between 10 days and a month of booking your trip, according to AAA.
Myth: Travel insurance is too expensive!
Fact: Remember, as we've mentioned before, if you get sick or injured 100 miles or more away from your home or when you're outside of the country, it can cost you much more than what you'll end up paying out of pocket for your travel insurance policy. According to AAA, travel insurance will cost 5-8% of your trips overall cost. So, yes, the more your trip costs the more you will be paying for insurance. However, if you can't pay the out-of-pocket expenses if your trip is canceled, if you have to rebook your flight or hotel last minute, then travel insurance is the way to go. In any of these last-minute situations, your travel insurance will be able to give you the protection you need financially and for your mental well being.
Myth: I have great health insurance already, so that will cover me on my trip! Travel insurance and health insurance are the same things, anyway.
Fact: This is a very big issue that's found across the board, and it is also a very false statement. Your personal health insurance won't provide protection or support with trip interruption, trip cancellation, damaged possessions, stolen items, lost items, emergency evacuation, or if there is a natural disaster where you've chosen to vacation and you're now dealing with the situation as an expatriate. Travel insurance, on the other hand, does. Also, while your health insurance might cover "customary" and "reasonable" expenses when you're abroad, most of your other costs won't be covered, according to AAA. This can happen when you're simply out of network when you're traveling in the US, too. Also, Medicare does not cover chargers that happen outside of the United States. So, if you have to be moved to a different doctor or specialist while you're traveling abroad (also called medical evacuation) it will not be covered under Medicare and nor will your other medical related issues. Also, if you're using insurance through your employer while traveling, you might be the only one it covers during your trip. While your spouse or child might be covered under this insurance while you're at home, this might not be the cause while you're traveling. This could put your loved ones at serious risk while traveling if all you have is your normal health insurance with you during your trip and not travel insurance.
Myth: I'm incredibly healthy and I'm a very safe person. Nothing will happen to me or my belongings while I'm traveling!
Fact: While you might be healthy and safe, there is so much about life and other people that you cannot control when it comes to traveling and what could happen. So much of what could happen during a trip that could put you in danger or cause you to leave and head back home because of an emergency has nothing to do with how healthy you are or how safe you live your life. You don't have control over the weather, over a canceled flight, or if someone chooses to steal your belongings or passport. Don't assume either, that even if you're just traveling over a short period that you're safe from these disasters. One bad day, one bad storm, or the loss of all your luggage in a matter of one flight can happen when you least expect it. There is no amount of specific time between when a disaster can and cannot happen!
We hope we've put your traveling plans in a new perspective after reading this blog! During these unknown times where traveling is already a gamble, travel insurance shouldn't be a question. Be prepared, travel safely, and make sure to put travel insurance at the top of your to-do list when making plans for your next trip. If you have any questions, please don't hesitate to reach out and chat with us! We are here for all of your insurance needs and questions! We are excited to work with you and love being a part of the Summerville community!
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