Alternatives to full-feature travel insurance policies

by Wayne Wirtanen (Second of two parts. Go to part one.)

In part one of this two-part series, I discussed when it was definitely the best time to buy a full-feature travel insurance package, that is, one that covers trip cancellation/interruption, medical costs, emergency medical evacuation, luggage losses, etc. In this part, I offer alternatives to full-feature travel insurance policies, which are relatively expensive at five percent to eight percent of the cost of a trip.

The most expensive portions of these policies are the trip-cancellation and trip-interruption coverage features. If you feel comfortable going without those features, there are some lower-cost alternatives that, in my opinion, provide the most important protections against the costs of overseas medical emergencies and emergency medical evacuations.

Do you already have overseas-medical-expense coverage?

In any case, and without fail, and well before a trip, and before buying travel insurance, find out if your at-home medical insurance will cover expenses incurred overseas. With most travel insurance, the medical coverage plans pay only what your at-home coverage does not pay; that is, they offer secondary coverage.

It’s a waste of money to pay for redundant overseas medical coverage that may end up paying little or nothing. Ask your at-home insurance provider if they have a brochure or other instructions on how to deal with an overseas medical emergency. Pack this brochure with your passport and tickets (and hope that you will not need it).

Those of you on Medicare may also have “Medigap” coverage, as I do. My Blue Shield “Medigap” supplemental policy pays 75% of overseas medical costs after a $250 deductible, but it has a lifetime limit of only $50,000.

My policy requires payment up front by me for any medical expenses, which is why I recommend that, for unexpected emergencies, overseas travelers should carry a good bit of cash plus credit cards with healthy available balances. Be aware that many overseas hospitals require payment before releasing patients. “Medigap” and many travel insurance policies reimburse for medical expenses only after the traveler returns home and after being provided with English-language descriptions of costs and treatments and adequate receipts.

Emergency medical evacuation coverage

Few, if any, at-home medical insurance policies pay for emergency medical evacuations. (Kaiser does so, the last time I checked, “on a case-by-case basis.”)

For a traveler whose at-home medical coverage will pay for medical expenses incurred overseas, I strongly advise adding emergency medical evacuation coverage — for as little as $55 for the whole family for a year — through Divers Alert Network, or DAN (800/446-2671). (DAN coverage also applies to domestic evacuations when 150 or more miles from home.) DAN’s emergency medical evacuation coverage is what I carry when traveling overseas.

The auto club AAA consists of independent companies around the country, and their benefits vary. The California State Automobile Association includes some overseas medical evacuation coverage in their extra-cost, extra-feature Plus program. It would be worthwhile to inquire of your local auto club branch to see if they provide this coverage.

No at-home policy providing overseas medical coverage?

If your at-home medical coverage does not provide protection overseas, you can get a relatively inexpensive package that covers overseas-medical and emergency-medical-evacuation expenses by purchasing a “zero trip cost” policy from one of many standard travel insurance sources. The “zero trip cost” policy eliminates only the trip-cancellation/interruption features, leaving intact all of the other features of a full-feature travel insurance package.

A travel insurance application will ask the price of the tour or cruise (the amount of the trip costs that you are requesting the company to cover). Savings are generated by eliminating the most expensive portions of a full-feature travel insurance package. On all policies, the bulk of the five to eight percent fee charged goes to cover the trip-cancellation and trip-interruption features.

In the space on the application for the cost of the trip, you enter or write in “zero.” All of the other policy protections, including medical and evacuation limits, will be in force at a much more modest total cost. The last time that I asked for a quote for this level of coverage, the cost for medical coverage as well as evacuation coverage for a 30-day trip was under $100!

(Of course, you are giving up protection against the loss of the money you paid for the tour or cruise, itself, so decide if this is a loss that you can afford.)

Again, I recommend purchasing travel insurance from a travel insurance broker instead of from a travel agent or a travel/cruise company. Your travel agent specializes in travel and offers limited travel insurance choices. A travel insurance broker specializes in travel insurance and will have access to multiple travel insurance choices, depending on your age and requirements.

One such travel insurance broker is Dan Drennen at Travel Insurance Center (8420 West Dodge Rd., Ste. 510, Omaha, NE, 68114; phone 866/979-6753, ext. 3621, or 402/343-3621 or e-mail dan@travelinsurancecenter.com).

Check out the website www.travelinsurancecenter.com. Several sources of “cancel anytime for any reason” coverage plans are described.

Happy trails!