audit-travel-insurance-coverage

Audit Travel Insurance Coverage

Evaluate travel insurance policies against trip-specific risk profile to confirm adequate coverage.

Why This Is Best Practice

Adopted by: ASTA-affiliated travel advisors, USTIA member insurers, Squaremouth (the largest US travel insurance marketplace) Impact: USTIA reports that only 37% of travelers read their policy before departure; travelers who audit coverage avoid the average $5,000-$50,000 gap loss from inadequate medical evacuation coverage Why best: Travel insurance policies have highly variable exclusions — pre-existing condition clauses, adventure activity exclusions, and country-specific limitations regularly void claims; systematic audit surfaces these gaps before they matter

Sources: USTIA "Understanding Travel Insurance" (2023); Squaremouth claims analysis methodology; ASTA Insurance Best Practices for Travel Advisors; Squaremouth consumer guides

Steps

1. Profile the trip risk — Identify risk factors: destination risk level (State Dept. advisory tier), planned activities (adventure sports, diving, skiing), traveler health (pre-existing conditions), total trip cost at risk, and flight/cruise booking structure.

2. List existing coverage — Inventory all existing coverage: credit card travel benefits, employer health insurance international coverage, existing travel policies, and home/renters insurance for belongings.

3. Identify coverage gaps — Compare existing coverage against required categories: trip cancellation/interruption, emergency medical, medical evacuation/repatriation, baggage loss/delay, travel delay, and 24/7 assistance.

4. Audit medical coverage limits — Confirm emergency medical minimum is $100,000 USD (or equivalent); for developing-country travel or cruises, $250,000+ is recommended; medical evacuation minimum should be $500,000.

5. Check pre-existing condition handling — Determine if the policy covers pre-existing conditions (most require purchase within 10-21 days of initial trip deposit for waiver); if not, assess actual exposure risk.

6. Verify adventure activity coverage — Read the exclusions list explicitly for any planned activities (extreme sports, motorized vehicles, mountaineering); if excluded, identify a rider or specialist policy.

7. Confirm cancellation triggers — Map the policy's "covered reasons" for trip cancellation against realistic cancellation scenarios; "Cancel for Any Reason" (CFAR) upgrades typically cost 40-50% more but cover 75% of non-refundable costs.

8. Review claims process — Identify: claims submission timeline requirements (24-72 hours for most policies), documentation requirements (receipts, medical records, police reports), and dispute resolution process.

9. Compare 2-3 finalist policies — Use Squaremouth or InsureMyTrip to compare comparable policies side by side on: premium, deductible, coverage limits, and exclusions for your specific profile.

10. Document and store the policy — Save policy number, emergency assistance phone number, and claims contact in a readily accessible location; share with a home contact and fellow travelers.

Rules

• Never rely solely on credit card travel insurance for international trips with significant medical risk
• Purchase insurance within the "free look" period (10-15 days for most policies) to retain cancellation rights
• Always read the exclusions section before the coverage section — what's excluded matters more
• For trips over $5,000 total investment, insure for 100% of non-refundable trip cost

Common Mistakes

• Assuming employer health insurance covers international emergencies — most US employer plans provide minimal or no international emergency coverage; medical evacuation ($50,000-$200,000) is almost never covered.
• Buying the cheapest policy — low-premium policies routinely have sub-limits ($10,000 medical) that cover nothing meaningful in a real emergency.
• Not declaring pre-existing conditions — non-disclosure voids claims; declare all conditions even if it increases premium.
• Waiting until departure to read the policy — many claims are denied for documentation failures that could have been prevented by pre-trip preparation.

When NOT to Use

• Domestic trips where health insurance provides full coverage and non-refundable costs are minimal
• Trips where all bookings are fully refundable (no financial exposure)
• Situations where the trip has already departed and the audit window has closed (note what to fix for next trip)