In tough times where the economic downturn increase the risks of losing one's job or potential illness looms due to spreading illnesses such as the H1N1/swine flu, purchasing travel insurance becomes more of a necessity for peace of mind than a benefit. For some, insurance can seem like a foreign language that only those fluent in "insurance speak" can understand. To master the art of insurance appreciation, InsureMyTrip.com has released a top 10 list of need-to-know insurance terms.
"Travel insurance like all insurance is complex," explains Jim Grace, president and CEO of InsureMyTrip.com, "but a fundamental understanding of industry terms and phrases that commonly cause confusion, can clear up some of the mystery."
1. A.M. Best Ratings— Industry watchdog A.M. Best rates and assesses insurance companies' financial strength and ability to meet their obligations to policyholders. InsureMyTrip.com features a user-friendly monitoring tool for consumers to check the A.M. Best Ratings of all the leading U.S. travel insurance companies before you purchase coverage.
2. Unforeseen— means not anticipated or expected and occurring after the effective date of the policy.
3. Primary— This section of the policy will pay FIRST, before any other collectible insurance.
4. Secondary— This section of the policy will pay you after any other Primary collectible insurance has paid the claim and the Primary policies' limits have been exhausted.
5. First Trip Payment Date— This is the date that money first exchanged hands for the trip you want to insure. This is the date the check is written, not the date it is cashed.
6. Pre-existing Medical Condition Waiver— Many policies have a pre-existing medical exclusion, meaning that coverage is not available for pre-existing medical conditions. A Pre-existing Medical Condition Waiver essentially deletes that exclusion and extends your policy to cover pre-existing condition-related risks. To be eligible for a Pre-Existing Medical Condition Waiver, the majority of travel insurance policies require that you purchase your policy within 10 to 21 days of your first trip payment date and insure for the full amount of your non-refundable travel arrangements.
7. Look Back Period— This is the number of days that the insurance company will 'look back' from the date the insurance was purchased to see if your claim is related to a pre-existing medical condition. The Look Back Period varies by company and plan and does not apply if you qualified for the Pre-existing Medical Condition Waiver offered by many plans.
8. Cancel For Any Reason— This is an optional benefit that empowers travelers to cancel trips for any reason including sudden unemployment, schedule conflicts, even bad weather, up to two days prior to departure. Cancel For Any Reason policies vary by company and must be purchased within 10-21 days of your first trip payment date.
9. Financial Default— This is a benefit that is part of Trip Cancellation/Interruption coverage. This protection applies if the airline, cruise line, or tour operator goes out of business and you are unable to travel as a result or suffer financial loss. Since this coverage is time sensitive, you must purchase a policy within 10 - 21 days (varies by company) of your first trip payment date. All of the plans that contain this benefit have a 7-30 day waiting period from the time of purchase before becoming effective. Typically, if you purchase travel insurance directly through a travel supplier such as an airline, cruise line, or tour operator, you cannot protect yourself should that travel supplier go bankrupt or become financially insolvent, so it is always best to purchase your travel insurance protection from a third-party source.
10. Travel agent vs. Tour Operator— A travel agent is someone who books flights, cruises and tours. A tour operator is a company which specializes in the organizing and operation of pre-planned vacations which are usually sold to the public through travel agents.