Travel Protection Plans. An explanation and a check-list.

TPPWhat are Travel Protection Plans ? Do you need one ? If so, which one and when ? How does your child’s autism affect those choices ?

Travel Protection Plans vary but their main function is insurance against having to cancel due to an emergency such as illness, injury or death. Many of the points considered here will apply to all vacation travelers but we offer extra thoughts on how these considerations affect our families in particular.

Since there is a lot to take into account, we’ll try to explain the principles but we’ll give you a check-list/action-plan at the end.

As with any insurance, you will need to weigh the cost of the protection against the impact of the potential losses. Why, for instance, do we buy homeowners insurance ? We do it because the premium seems relatively small and affordable when measured against the potential loss. Could you afford to replace your house if it were totally destroyed and you didn’t have insurance ? Hint: most people can’t. Bill Gates and Warren Buffet, read no further ! For the rest of us, let’s start that measuring.

So what is your potential loss ? The main thing here is to have coverage for the non-refundable elements of your trip. There are other things covered in these plans, we’ll deal with them later. Many parts of your trip may be non-refundable; some will be partially refundable in certain circumstances. Many are refundable up until final payment date but not after that.

For the most part, airfare is non-refundable from the day that you book it. Technically, you don’t have to lose the full airfare if you cancel and rebook another flight with the same carrier. One problem with doing that is that these “change fees” can be up to $ 150 per ticket, or more. The other problem is, what happens if you need to make a second change ? You end up paying a second change fee !

The other big, non-refundable items are cruises, escorted tours and packaged resort/hotel trips. For the most part, the deposit is relatively small and may even be refundable until final payment date. Once final payment is made, however, it is usual for the whole thing to be non-refundable. If not at that stage, it becomes so closer to your departure date.

Car rental is usually refundable as are stays at hotels if booked guaranteeing by credit card so long as you cancel by a given deadline. Many “add-ons” to packages such as excursions and attraction admissions are fully refundable unless cancelled at very short notice.

What of the other coverages ? What are the potential losses here ? Most plans include things minor compensation for lost or delayed bags which should not form part of your decision making. Two slightly more important components are medical coverage while traveling (more important with international travel than domestic) and medical evacuation.  Unless you take separate medical evacuation coverage, decisions on evacuation are made by the insurance company not by you, the policyholder.

How do you choose ? There are some fundamental choices to make before deciding upon the details of a particular plan.  The first consideration applies to the choice of whether to take the plan from your travel provider (cruise line, tour operator) or whether to take a stand alone plan from an outside company.

Plans provided by the travel provider have the advantage of being formatted to coincide with their cancellation policies. If purchasing from an outside supplier, you need to make sure that the coverage meets the cancellation terms. In general, cruise line and tour operator plan costs are flat-rate and, often, less expensive than outside cover. Why then look elsewhere ? There are two reasons.

If you purchase everything from a single supplier, all cancellation costs are in one place. If you purchased each element separately, they’re not. Let’s use the example of a cruise package with flight, hotel stay at the port of departure, cruise plus shore excursions. If all of these are purchased through the cruise line, then your plan can cover all elements. If, on the other hand, you purchased airline tickets from the airline, the hotel as a separate booking, and the shore excursion from one or more tour companies, you probably have four or more, separate lots of cancellation fees. The only way to consolidate these will be with a separate plan that encompasses them all.

The second reason to look elsewhere relates to pre-existing condition terms.  What are the pre-existing condition terms for your single supplier ?

Anybody with a pre-existing condition where there is a possibility that the condition that might change their status from able-to-travel to unable-to-travel needs to know that this is covered.  Most plans allow for covering pre-existing conditions provided that the coverage is purchased within a specified time period from the initial trip deposit. That period can be anywhere from “must be with deposit” to “within 21 days from initial deposit”.  All such plans have a “look back” period, expressed as a number of days, where they could, potentially, check to see if the insured was unable to travel during that period.

This must be stressed. Autism is a pre-existing condition. You must check that you will be covered.

One way around the pre-existing condition issue is with Cancel For Any Reason Plans. As the name suggests, you can cancel for reasons extending well beyond medical necessity. The added benefit to these plans is that the claims process is immeasurably easier.  Given the number of forms that we’ve all had to fill out for health insurance companies, school districts and every new therapist that we go to, this may be quite some benefit. The downside to these plans are that they may cost more and that may limit the payment to a percentage of the total non-refundable costs.  If a plan costs a good amount more and then only covers 50% of the non-refundable, you may be better off with a standard plan. If the extra amount is small and it covers 100%, or close, then it is probably the best option.

Here is a piece of good news. Plans are either flat rate for everybody or they take into account total trip cost and passenger age. No plan, that we are aware of, is more costly because one or more of the passengers has autism. Here is a break for us. Our risk of claim is higher than the general traveling public but our cost of coverage is the same.

Let’s summarize all of this with a checklist:

  • Figure out what your total non-refundable costs will be.
  • Determine whether they are all purchased from a single supplier.
  • If purchasing from a single supplier, check their plan against outside plans.
  • If purchasing from multiple suppliers, check a range of plans.
  • Check, and double-check, that you can get coverage for the pre-existing condition.
  • Look at Cancel For Any Reason Plans to see if one might work.
  • Purchase the plan that comes out best for you having reviewed the above.
  • Relax and go on your vacation. You’ll probably never have to claim and you’ll wonder why you bought this. You didn’t buy anything tangible. You bought peace of mind and your vacation will be the better for it.

Disclaimer. The information contained above is intended solely to give general information on the topic. Before purchasing any financial or insurance product, you should ensure that the terms and conditions are suitable for your needs and circumstances.

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