How to Make The Most of a Travel Insurance Claim

More travelers are buying insurance. If your trip is canceled, take these steps to increase your chances of recovery.

(Image credit: Getty images)

 The same tricky travel climate that can derail vacation plans abruptly is also starting to overwhelm the insurers compensating travelers for those disruptions. Changing pandemic protocols in the U.S. and abroad, COVID spread, nonrefundable reservations, and canceled or delayed flights made travel insurance a desirable—sometimes even required—safety net.
         In a recent survey, travel insurer Allianz Partners USA found that 90% of its customers said they’re likely to buy travel insurance for their next trip. And Squaremouth, a travel insurance comparison site that also tracks trip insurance purchases in real time, reports that 42% of summer 2022 travelers specifically sought out coverage for contracting COVID-19, including cancellation, medical and quarantine benefits. That number represents a nearly 10% jump from the same time last year.
       More buyers of the insurance mean more claims. Squaremouth’s data analysis shows a whopping 235% increase in claims from January to June this year, compared to the same time frame in 2019. And experts warn that volume, filing errors and confusion are clogging the system and producing delays. What previously took days or weeks to process could now potentially take months, industry watchers say. “The majority of claims are from travelers who contract COVID-19 either before or during their trip,” says Megan Moncrief, chief marketing officer at Squaremouth. “This is causing extended claims processing times throughout the industry.”   
       Contributing to the spike in claims is that many U.S.-based insurance providers expanded their standard policies to cover cancellations or delays due to illness, individually ordered quarantines, denied boardings and other events caused by COVID-19 or future epidemics. Previously, only a pricier policy upgrade, Cancel for Any Reason, offered worried travelers such broad protection that it would have covered disruptions from pandemics, but that peace of mind generally increases a policy’s premium 40% to 50%.
       With claims expected to continue rolling in at an blistering pace, how can travelers expedite a claim and avoid mistakes that can prolong resolution? Here are some tips to keep in mind.

 Know what counts as proof of COVID 

 Moncrief calls this “the biggest misconception” right now. Many travelers who contract COVID misunderstand the documentation required to verify the diagnosis when making a claim. An at-home test usually isn’t enough, she says. In most cases, insurers want to see a PCR, or a test given by a medical professional, along with a doctor’s note confirming a positive result. What’s more, self-isolation due to exposure typically is not covered, she says. 

 Understand policy coverage and benefit limits 

 Let’s say you fall ill and are unable to return home as planned. Most policies can cover meals and accommodations for your delayed departure, as well as transportation expenses. But “this is not an unlimited pot of money,” Moncrief says. The typical benefit might range from $1,000 to $2,000 per traveler, with a daily limit. To minimize out-of-pocket expenses, know exactly what the threshold is and spend accordingly.

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 Don’t get tripped up by vouchers 

 Often, airlines will offer a voucher for future travel (in lieu of a refund, to which you are always entitled) when a flight or booking is canceled. But is the reason for the dropped flight covered by your travel insurance policy? If it is, you must decline the voucher and cancel the flight outright to claim that expense. Squaremouth notes that insurers are denying more claims because some travelers accept the voucher and then try to claim the cost of the flight. 

  Document everything 

 When you’re filing a claim, proof is everything. Before they can process a claim, travel insurers will need all the evidence that proves your loss. Keep cash and credit card receipts for expenses you incur, and gather documentation. For example, a statement from the airline about lost luggage along with an inventory detailing the value of what was lost may be sufficient for reimbursement, and a diagnostic note from a doctor may satisfy medical claims. Take photos of that proof in case the paper copies are misplaced or lost. 

 Report promptly 

 Expedite a claim by filing as soon as possible and submit it via email or the insurer’s online portal. The time frame for filing a claim varies depending on the company and the policy, but the clock starts ticking from the date of your loss. Typically, there’s a 90-day window to submit a claim and documentation, although some insurers shrink that time frame.
          A last note: If you book a trip with a credit card that offers travel insurance, you may be able to recoup some costs, perhaps related to cancellation, interruption or delayed or lost baggage. Not all cards, however, have the same coverage, and each will set strict limits. Check the benefits guide for your specific credit card to determine the scope of coverage it guarantees and the rules for making a claim