I’ve read that buying a trip cancellation travel insurance plan with a $0 trip cost is a good idea because I’ll still get all the medical, evacuation & other coverages without paying extra for the trip cancellation. It sounds too good to be true. What do you think?
Don’t do it.
But, you probably need more explanation than this.
Uh-oh – Steve’s splitting hairs again
The reason I think insuring a $0 trip cost on a trip cancellation travel insurance plan is a bad idea may sound too picky and detailed, but all good contracts (insurance is no exception) are full of details.
You probably saw this wording in some of my “Quibbles” on TripInsuranceStore.com:
A $0 trip cost makes the policy effective date the later of 12:01 am of your departure date or 12:01 am of the day after your purchase date.
Most people skip over this “Quibble”, but it’s an important detail. I’ll make this explanation as simple as possible:
You buy a trip cancellation travel insurance plan with a $0 trip cost on July 15th for a trip leaving October 11th. You assume the policy’s effective date is July 16th (12:01 am of the day after your purchase date).
You’re not worried about pre-existing conditions because you know that “a trip cancellation / trip interruption plan’s Pre-Existing Condition Lookback Period is a period of 60, 90 or 180 days prior to the travel insurance policy’s effective date”.
Unfortunately, your travel insurance policy’s effective date is not July 16th (12:01 am of the day after your purchase date). Your travel insurance policy’s effective date is October 11th. Here’s why:
- If you insure at least a $1 trip cost, all of TripInsuranceStore.com’s plans’ effective dates will be 12:01 am of the day after your purchase date.
- However, & this is really important: a $0 trip cost makes the policy effective date the later of 12:01 am of your departure date or 12:01 am of the day after your purchase date.
You have an angioplasty (never had this nor anything related before) and get a stent put in on August 29th. Your doctor says you’re fine to travel on Oct. 11th. But, on Oct. 13th, something happens with your arteries and you need emergency treatment on your trip, thinking your huge medical claim will be paid. You get back home and file your claim which gets turned down.
Why your claim gets turned down
Since your policy’s effective date was October 11th, your August 29th angioplasty causes your August 29th treatment to be defined as a pre-existing condition because it occured in the 60, 90 or 180 day Lookback Period prior to October 11th. Therefore, nothing that occurs after your effective date will be covered.
But, if you had insured at least $1, your effective date would have been July 16th making anything related to the angioplasty an unknown and therefore covered.