When is Too Late to Buy Travel Insurance?

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Many travelers are not sure when to buy a travel insurance policy.  The answer will depend what coverage is most important to the traveler.  A policy can be purchased before the trip is even booked, all the way until the day before departure.  However, coverage can change depending on when the policy is purchased.  Overall, there are more benefits to purchasing a policy early.  Consider the following items when comparing travel insurance plans.

Pre-Existing Conditions

Coverage for pre-existing medical conditions is one of the most frequently asked about topics with travel insurance.  It is typical for a policy to exclude pre-existing conditions, but offer a waiver of the exclusion.  The waiver is available if the policy is bought within 9, 14, 21 or 30 days from the trip deposit date.  This means the first payment made towards a trip starts the clock on whether this coverage is available.  Alternatively, CSA and HTH offer the waiver if the policy is purchased before the final trip payment.  The waiver does not add to the premium cost, either the policy was purchased in time to cover pre-existing conditions, or it is too late and the policy will exclude pre-existing conditions.

Cancel For Any Reason

Cancel for any reason allows the traveler to cancel a trip without explaining why.  This benefit is also only available for a short time from the deposit date, up to 30 days, so shop early to get this coverage.  Unlike pre-existing conditions, cancel for any reason is normally a selectable option that will increase the premium by about 50%.   This coverage must be purchased when the policy is originally purchased.  After purchase, or if too much time has elapsed since the deposit date, it is too late to buy a policy with cancel for any reason.

Foreseeable Events

When a policy is purchased is important when it comes to catastrophic events that impact travel, such as volcanic ash or civil unrest.  Travel insurance is designed to cover unexpected events out of the traveler’s control.  Once a situation is considered foreseeable, a new policy will not cover anything related to the foreseeable event.  This is most common with hurricanes, once a storm is named, new policies will not cover that storm.  More recently, the civil unrest in Egypt has many travelers looking into travel insurance for the first time, but it is too late to buy a policy that will cover this situation.  When current events impact travel insurance coverage, the insurance carriers will release position statements to identify how a situation is covered.

Multiple Trip Payments

It is common for travel plans to be booked and paid for in segments.  Because the first trip deposit determines for how long some benefits are available, many people are not sure how much trip cost to insure if there are more trip payments to be made.  The first option is to only insure the amount paid out of pocket at that time.  When additional trip payments are made, the traveler can update the travel insurance policy with the new trip cost and pay any difference in premium at that time.  This step is important for the coverage benefits only available for a limited time based on the deposit date.  Every time a new trip payment is made, the traveler has a new set of 9, 14, 21 or 30 days to update the policy in order to keep those coverages.  The advantage with this option is that only actual out of pocket amounts are being insured, however, the disadvantage is this option is a multi step process.  The second option is to estimate what the final trip cost will be and insure that amount up front.  The advantage here is not having to think about updating the policy later unless the estimate is exceeded, however, the disadvantage is insuring trip cost that is not at risk yet.

Other Coverage

There are other, less asked about, coverage benefits only available for a short time from the deposit date.  These can include:  financial default, terrorism and cancel for work reasons.  Again, depending on the policy, these can be available from 9-30 days from the initial trip payment.

No Good Reason To Wait

Maybe the most compelling reason to purchase a policy early is that there is no advantage to waiting.  Almost every policy will cost the same whether quoting 10 months before departure or 1 day before departure.  Also, trip cancellation coverage begins the day after purchase.  So, for the same price, a traveler could have trip cancellation coverage for 10 months or 1 day.

In summary, travelers can wait until the day before departure to purchase travel insurance.  However, shopping early can mean additional coverage at the same cost, more available coverage options, avoiding the issue of foreseeable events and covering a longer period of time for the same cost.