If you’ve ever needed medical treatment while on holiday, had to cancel your trip at the last minute due to illness or had your luggage stolen from a train station, you’ll know how important travel insurance is.
Even more so if you are not entitled to any form of reciprocal state heath care, e.g. emergency treatment covered by the EU Health Insurance Card.
When Mike and I tried to go to India a couple of years ago on a trip that, for reasons beyond our control, never got us further than London Heathrow, we were so glad we had insurance. Ours was a very unusual situation that didn’t match any of their standard claims descriptions and involved numerous hotel, train and flight bookings I’d made online, which made the claims process particularly onerous.
It was a nightmare journey to get to and back home from the UK and gathering all the necessary documents to process our claim took weeks but the insurance company, Globelink, was flexible enough to pay out for our non-standard circumstances.
Side note: This was also a lesson in the value of booking through a travel agent – had we done that, we would only have needed to get paperwork from the airlines and the travel agency to process the claim. See my Fully Managed Portugal Itineraries if this is how you’d prefer to handle your Portugal trip.
Travel insurance in a pandemic
Now that Covid-19 has disrupted the world and had such an impact on travel, insurance companies have had to rethink the coverage they can sustainably provide.
Many insurance companies typically excluded pandemics in their coverage and when the pandemic first hit, most wouldn’t cover pandemic-related costs for travel booked after mid-March 2020 as the coronavirus situation is a ‘known event’ under their terms and conditions.
Now that we’re more than a year into the pandemic, insurers have changed their stance to respond to travellers’ needs and will more than likely provide some kind of Covid cover.
Many travel insurance policies cover things like trip cancellation if you, a member of your immediate family or a travel companion get sick before you are due to travel, including if that is from Covid-19.
Also, in most cases, the emergency medical assistance part of your policy will cover you if you get sick, even with Covid-19, while travelling. This depends on you travelling in accordance with government advice.
What they won’t usually cover is cancelling because you’re worried about the rate of infection in your chosen destination. With some companies, you can now get cover for if you test positive and therefore can’t travel.
When choosing a travel insurance policy, you should also check for travel interruption coverage to see what exactly would be covered in the event of having to quarantine abroad or you wanting to abandon your trip part-way through in order to avoid a quarantine situation.
‘Cancel for any reason’ travel insurance
The only way to give yourself the freedom to get some money back if you simply decide that don’t want to take the risk after booking a trip would be to take out an extra ‘cancel for any reason’ policy.
Such coverage means you can simply change your mind up to 48 hours before you are due to travel and claim 75% of the non-refundable portion of your trip.
For this option to work, you need to pay attention to the timing of the policy and the amounts insured. In other words, you can only purchase ‘cancel for any reason’ insurance within a few days of making your first payment for the trip, whether that’s the flight or the first deposit on travel services.
You must also insure 100% of the cost of the trip, even if you’ll only get 75% back. For this reason, it will probably be cheaper to insure only what you’ve paid so far and top up the amount when you pay for the trip in full. This way, you won’t lose out more than necessary if you have to cancel before paying out the final installment.
Do a simulation for covering the trip costs in full in one go and in phases to see which works out cheaper.
Example, which is likely to be more cost-effective and flexible than covering the €15,000 on X date:
Total trip cost = €15,000
Deposit paid and flights booked on X date, value = €5,000
Final payment of €10,000 due on Y date.
Purchase ‘cancel for any reason’ insurance for €5,000 on or very close to X date.
Purchase an additional €10,000 coverage on or very close to Y date.
Choosing the best travel insurance policy
Different travel insurance companies are optimised for serving specific markets, e.g. family travel, adventure travel, senior travel, so it pays to shop around to see what the best deal is for you.
If you are based in North America, you could use Yonder, which is a comparison and booking platform that has partnered with reputable travel insurance providers and makes it easy for you to find a policy that suits your specific needs.
Another comparison website that is very popular and reliable in the US is Aardy.
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