Note: This information was developed to provide consumers with general information and guidance about insurance coverages and laws. It is not intended to provide a formal, definitive description or interpretation of Department policy. For specific Department policy on any issue, regulated entities (insurance industry) and interested parties should contact the Department.
If you have ever taken a cruise or planned a trip through a travel agency, you may have seen offers for travel insurance. Travel insurance policies have specific limitations and exclusions. When you look at a travel insurance policy, pay special attention to the fine print of the policy. This fact sheet provides some general information about travel insurance.
Do You Need Travel Insurance?
If you have life, health, homeowners, or even credit card insurance, chances are you may end up paying more than necessary by purchasing travel insurance. Here are some points to consider:
- Does your medical insurance policy limit payment or coverage for accidents or illness that happen outside your coverage area or the United States? Evaluate your current health insurance coverage carefully before you travel. For example: Medicare and Medicaid typically do not pay medical expenses for services rendered outside of the United States. In addition, some health insurance plans or policies do not cover emergency medical evacuations (due to sudden illness) while traveling.
- Will your homeowners or renters insurance policy cover your travel belongings if they are stolen while on vacation?
- What costs can you absorb yourself if something unforeseen happens?
Common Types of Travel Insurance Coverages
There are a number of different travel insurance options available to cover nearly every type of occurrence or loss associated with traveling. Be sure to read the contract carefully and understand the benefits being offered. Some insurance benefits may be subject to a deductible and coinsurance. Policies can be complex and confusing. Make sure you are buying the coverage you want.
Some common types of travel insurance coverages include:
- Trip Cancellation Insurance – Reimburses you if you have to cancel your insured trip due to sickness, death in the family, or any other misfortune listed in the policy. Some policies may also reimburse you for the unused portion of a vacation if you or an immediate family member becomes seriously ill or injured while on a trip.
- Emergency Medical Assistance – Provides insurance and medical protection if you are treated for illness or injury while traveling. May pay for some benefits that may not be covered by a standard health insurance plan.
- Baggage Insurance – Provides coverage if your belongings (luggage and personal possessions) are lost, stolen, or damaged during a trip. You may also want to find out if the airline or trip operator offers any type of insurance for your belongings.
- Accidental Death – Provides coverage if you or a family member dies from a covered injury or accident while traveling abroad.
Many travel insurance policies contain coverage limitations that exclude or limit specific risks, perils, or other effects. Listed are some things to keep in mind:
- Cruise and tour operators sometimes offer Cancellation Waivers – another form of trip cancellation coverage. A Cancellation Waiver is different from a Trip Cancellation insurance policy. Waivers are not insurance policies, and although they may not be as expensive as insurance policies, they can have many restrictions. Waivers are not regulated by the Department of Insurance. If you purchase a waiver from a tour or cruise operator, and the operator becomes insolvent, you may not be able to collect.
- Pay close attention to special limitations and the list of property not covered in a baggage insurance policy. If you are traveling with valuables that exceed the limits of your policy, you may need to purchase additional coverage for the excess value of those specific items. A floater or endorsement to your homeowners or renters policy may be an option.
- Pay close attention to the perils that are included and excluded in your trip cancellation policy. Although some conditions (weather, illness, etc.) may be covered, other events (i.e. war, terrorism) may be excluded.
- Pay close attention to how pre-existing conditions are defined in your travel policy. There may be specified time periods when pre-existing health conditions are not covered.
Shopping for Travel Insurance
An Internet search can lead you to web sites that allow you to obtain insurance premium quotes from several companies. For more personal service, a local insurance agent can provide information on coverage available.
For More Information
Call our Consumer Assistance Hotline toll free at (866) 445-5364 or visit our website at http://insurance.illinois.gov.
For more information about travel, visit the Bureau of Consular Affairs web site at http://www.travel.state.gov