Cozmo Travel is involved with helping travellers arrive at their preferred destinations every day of the year. Travelling brings a few natural and man-made interruptions and issues that are covered by a comprehensive travel insurance policy. In brief, travel insurance compensates for flight delays, cancellations and missed connections that force travellers to pay for hotel stays, meals, unplanned airport transits, and helps travellers recover losses when luggage or valuables are misplaced. Cancellation costs in the event of an emergency or when travellers get sick or injured and need medical help abroad are also covered.An Introduction to Travel Insurance
Travel insurance policies cannot prevent travel hassles, but they can address the financial impacts of common traveller problems. Travel policies are available for single trips or predefined time-frames, typically on a yearly basis. Similar to other forms of insurance, travel policies cover specific events up to predetermined coverage limits. The type of coverage affects policy premiums.
Covered risks and exclusions may vary depending on policy type, insurer prerequisites and travel preferences, but usually include:
- Trip interruptions
- Lost or delayed baggage
- Carrier or service provider failures
- Emergency evacuations
- Theft and other crimes
- Medical treatment
Trip Insurance – The Most Common Type of Travel Insurance
Trip insurance is the most comprehensive and common form of travel insurance. This type of insurance may also work out to be expensive for the traveller.
Single vs. Annual Trip Insurance Policies
Single Trip Insurance Policies
Single trip insurance policies cover discrete trips or portions of trips. It’s possible to cover the entire duration of a single vacation or business trip, from the moment you leave your house to the moment you return. Though premiums vary significantly by coverage limits, insurer, traveler age, and other factors, trip insurance premiums for single trips typically fall between 5% and 10% of the total cost of the covered portion of the vacation.
Annual Trip Insurance Policies
Annual trip insurance policies are relevant for frequent travelers. They usually have a validity of one year with convenient renewal options. Premiums may work out less than single trip plans, even though demographic factors play a role calculating premiums. Insurers also offer annual plans for single travelers and couples, with minor-age children included at no additional charge. Annual trip insurance pricing is usually flat – you pay the same premium regardless of how much you travel. The advantage with such policies is that they are cost-effective for people who live away from home for months at a time, including foreign service employees and students studying abroad.
Difference Between Single and Annual Trip Insurance Policies
Besides the obvious time-frame differences, single trip and annual trip insurance policies usually differ in one important aspect, single trip policies have generous coverage for trip interruption and cancellation, while annual policies have comparatively limited or nonexistent trip interruption and cancellation coverage. This is something that travellers need to make a note of, as trip interruptions and cancellations are among commonly invoked and financially beneficial covered events. Many insurers do offer supplemental trip interruption and cancellation policies for annual policyholders for an additional annual or per-trip fee. Other insurers add these covered events to high-end (and possibly expensive) annual policies. Before travellers select an annual policy, Cozmo Travel recommends them to determine whether it’s possible to add trip interruption and cancellation coverage, and if this option is available, how much it would cost to add these inclusions.
Common Trip Insurance Inclusions
With the trip interruption and cancellation caveat in mind, single trip and annual trip insurance policies typically include the following common covered events. Do note that not all insurance policies include the events that are mentioned, and some include events that may not be listed here. We recommend travellers to carefully review policy inclusions while insurance shopping.
Trip cancellation coverage typically reimburses prepaid and otherwise nonrefundable travel expenses, such as airfare, hotel rooms, and rental cars, up to a predetermined coverage limit. Coverage limits can vary widely and are based on circumstances under which your trip cancellation claim will be honored are subject to variation by an insurer. However, they typically include:
- Eventualities such as the birth of a child in your immediate family
- Certain job-related obligations that conflict with your planned vacation
- A strike or natural disaster that affects your travel carrier’s ability to operate
- An unusually long travel delay that eliminates a portion of the trip’s productive time
- Death or serious injury and illness
- Involuntary termination by your employer after a minimum duration of service
- Inaccessible destinations
- Certain crimes committed against you shortly before your trip
- Serious traffic accident shortly before your trip
- Involuntary military service
Trip interruption coverage applies to trips that have been cut short while in progress. In most cases, filing a trip interruption claim doesn’t preclude you from restarting your trip once the impediment has passed.
Change Fee Coverage
Insurers provide separate reimbursements for policyholders who need to change their flights due to applicable trip interruption or cancellation circumstances.
Travel delay coverage is more narrowly tailored to reimburse expenses incurred due to long travel delays, usually six hours or longer. Travel delay coverage also covers prepaid trip expenses, such as non-refundable hotel rooms or rental cars. Covered circumstances include:
- Natural disasters
- Severe weather
- Crimes committed against you or a member of your traveling party
- Lost travel documents or identification papers
- Civil unrest
- Unannounced strikes that render your carrier unable to operate
This is a narrow type of coverage that reimburses expenses incurred due to a missed travel connection or excursion, such as a flight or cruise. Covered expenses include flight re-bookings, baggage shipping fees, and the like. Insured circumstances include canceled or long-delayed flights, severe weather at points along your travel route, and severe traffic caused by an accident or other unavoidable situations, both natural and man-made. Coverage limits are comparable to travel delay coverage.
Frequent Traveler Coverage
This boutique coverage provides reimbursement for carrier-imposed mile redeposit fees – the fees charged by an airline or loyalty program administrator to redeposit frequent flyer miles back into your account after you cancel a flight purchased with miles or a combination of miles and cash. Covered circumstances are usually comparable to those for trip cancellation and interruption coverage.
Baggage Loss and Damage
This coverage comes into effect if luggage is lost, damaged, or stolen at any point during your trip. Common claim situations include baggage that is misdirected by an airline, stolen luggage and baggage left by you or a traveling companion in an area to which you are reasonably unable to return.
Baggage delays for multiple reasons common carriers or tour operators, is a prerequisite for travellers to file a baggage delay claim that reimburses travellers for the purchase or temporary procurement of essential items and clothing, or anything that is likely needed before the baggage is found. Travellers cannot claim reimbursement for non-essential items like large electronics or jewelry. This coverage provides ‘reasonable reimbursement for essential items’ if baggage is delayed by ‘a common carrier, hotel, or tour operator’ for more than 24 hours.
Travel Accident Coverage
A crucial, less common form of coverage that provides cash payments in the event of serious, permanent injury to insured travelers. Covered circumstances typically include death, loss of eyesight, and loss of limbs. Travellers with disability insurance will need to check with their insurers to confirm that the policy’s travel accident coverage won’t preclude them from filing a disability claim.
Emergency Medical Reimbursement
A reimbursement scheme covering medical (and possibly dental) procedures arising from trip-related injuries or illnesses. Like travel accident coverage, policy reimbursements can be quite generous. Emergency medical reimbursement coverage is critical in countries where medical care is costly for those without adequate health insurance.
Emergency Medical Transportation
This reimbursement schedule compensates covered travelers and their families for medical transportation (such as air ambulances) related to serious or fatal injuries and illnesses on a trip. In some cases, coverage extends to transportation and repatriation of covered travelers’ remains as well.
Business Equipment Coverage
Relevant to business travelers, this coverage allows reimbursement of expenses incurred to replace stolen, lost, or damaged business equipment with identical or less expensive models. Coverage limits vary widely by policy and if travellers are carrying very expensive equipment, such as production-grade audiovisual equipment, it is highly recommended to insure it separately.
Business Equipment Rental Coverage
This coverage applies specifically to equipment rented to replace lost, damaged, stolen, and sometimes delayed business equipment. Filing a business equipment rental claim does not hinder a business equipment claim, provided the original equipment is never recovered or recovered with quantifiable damage.
Other Types of Travel Insurance
Some types of insurance covers are more specialized and less comprehensive than trip insurance policies and they provide generous coverage for specific events. For example, medical travel insurance policies are popular among older travelers, while evacuation policies are important for travellers heading to remote destinations.
Medical travel insurance policies are sometimes referred to as travel health insurance or international health insurance. Policies are designed to provide reimbursement or cash payments for medical treatment and transportation expenses incurred outside the insured party’s home country, although they can also provide coverage for domestic travelers without private or government-sponsored health insurance.
Like trip insurance, medical travel insurance can be purchased on a per-trip or annual basis. Per-trip travel insurance policy premiums vary by insurer, traveler age, length of trip, and other factors.
Most medical travel insurance policies combine ‘travel accident coverage’, ‘emergency medical reimbursement’ and ‘emergency medical transportation’ coverages. Covered medical costs must be unexpected and not tied to a scheduled or pre-existing medical procedure or condition.
Evacuation policies provide reimbursement or cash payments for urgent and emergency evacuations and repatriation journeys from anywhere in the world. In most cases, insurers coordinate evacuation and repatriation themselves, by coordinating with local service providers.
Evacuation policy costs are a touch more expensive than medical travel insurance policies. Such policies are significantly less expensive when bundled into supplemental travel insurance policies or tailored to exclude certain common circumstances (such as medical evacuation).
Evacuation policies combine the ‘emergency medical transportation’ coverage described in the medical insurance section with coverage for evacuations related to civil unrest, natural disasters, and transportation delays. They may also include adjacent services, such as family member notification of death or hospitalization and language translation for the covered traveler and family members.
Sometimes referred to as flight travel insurance, travel accident insurance provides cash payments for serious injuries, illnesses, and death. It’s designed to ease the financial burden of costly accidents.
Since travel accidents are relatively uncommon, travel accident insurance is typically quite affordable. Insurance premiums depend on the covered traveler’s age, destinations, desired inclusions, coverage limits, and other factors.
Travel accident insurance almost always provides cash payments for accidental death and dismemberment (AD&D), either to you or your designated beneficiaries. It can also include direct payments or reimbursement for medical evacuation, direct payments or reimbursement for certain types of emergency medical treatment, beneficiary payments for travelers killed in flight accidents and supplemental term life payments to family members.
Supplemental travel insurance policies comprise a broad and ill-defined area of the travel insurance world. By definition, they’re less comprehensive and generous than trip insurance policies. A few supplemental policies cover a broad range of perils and situations, including many found in comprehensive trip insurance policies. Others are extremely specific, covering discrete eventualities like evacuation due to civil unrest or injuries related to extreme sports. Many companies allow travelers to build supplemental policies on an ‘a la carte basis’, picking and choosing their desired coverages and coverage limits.
Choosing the Right Policy
Even if travellers have shopped for other types of insurance in the past, choosing the right insurance policy depends on various factors. The right type of travel insurance and the insurer is determined by the best fit to your needs and budget. Cozmo Travel recommends travellers to consider these aspects while evaluating and ultimately selecting an insurance policy.
Who’s Underwriting and Issuing the Policy:
Many tour operators and cruise lines market trip insurance policies directly to their customers. How Often You Travel:
If you travel frequently, consider an annual travel insurance policy.
How Much You Spend on Travel:
Relatedly, the overall cost of your travels is a crucial consideration. If you’re a healthy, frugal traveler who takes few risks, you might be justified in taking your chances and forgoing travel insurance altogether.
Where You Travel:
Travel experts recommend purchasing medical and evacuation coverage on overseas trips. What You Plan to Bring on Your Trip:
Baggage insurance, purchased as a standalone supplement or as an inclusion to a comprehensive trip insurance policy, makes sense for travelers bringing expensive electronics, jewelry, and other expensive-to-replace items.
When You Make Your Travel Insurance Policy:
Travel insurance policies purchased simultaneously or near-simultaneously with travel bookings tend to be more generous than travel insurance policies purchased at the last minute.
What Your Professional and Personal Situation Is:
Before making any travel insurance decisions, assess your personal and professional situation at home.
What Risks You Expect to Encounter:
Consider the risks of travelling to a specific destination while purchasing your travel insurance policy. If travellers are visiting a remote, underdeveloped region, or spending time on a cruise ship, the will require medical evacuation coverage. If there is a chance of baggage being mishandled, travellers may want to make ensure that the insurance policy provides coverage for lost, stolen, damaged, or delayed luggage.
Like all insurance policies, travel insurance policies approach the claims process with a certain level of skepticism. Some have surprising exclusions as well – for instance, some insurers don’t provide trip cancellation or interruption coverage in the event of airline bankruptcy. Before purchasing a policy, Cozmo Travel advices our customers to read the print for coverage exceptions and exclusions for clarity on inclusions, exclusions and the claims process.
We also recommend travellers to investigate any travel coverage you do have to determine how well they are protects you during their travel. Any type of travel insurance you have could have restrictions based on your current state of health and recent medical changes. With any plan you are relying on, it is important to investigate policy information to determine how adequately it protects you. Along with the proper coverage, it is just as important to deal with a licensed travel specialist who can insure that a policy sold to you will cover you for your whole trip and will be there for you, if you do have an emergency.
Travel With Cozmo Travel As Your Travel Partner!
We are your ideal travel partner when it comes to traveling to destinations from Dubai and Abu Dhabi. Cozmo Travel is a one stop shop for economical travel plans and itineraries, flight tickets, UAE visa assistance and hotel bookings within UAE and across the world. We welcome you to read other articles in our large collection of blog entries, not only to be informed about the wonderful destinations waiting for you, but to approach Cozmo Travel for help with getting to these awe-inspiring destinations.
Cozmo Travel LLC is an esteemed member of the Air Arabia Group, and in 2010, commenced operations as a full-fledged IATA certified travel agency in Sharjah. Cozmo Travel currently holds a portfolio of 39 branches in the GCC (Gulf Cooperation Council) with 26 branches operating out of the UAE, seven branches in Saudi Arabia, three in Qatar, two in Kuwait and one in Bahrain.