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Independent Study Reveals Gaps in Traveler Protection from
Credit Cards, Health Care Plans and Homeowner's Insurance
Travel Insurance Market Analysis Exposes Myths
and Misconceptions of Travel Insurance
Boston, MA - An independent study by research and consulting
firm Chadwick Martin Bailey, Inc. shows that travel-related insurance offerings
by credit cards, health care plans and homeowner's insurance often fall short
of coverage offered by providers of comprehensive travel insurance. The study,
commissioned by Travel Guard International, the nation's leading provider of
travel insurance, revealed that U.S. travelers may be traveling under the assumption
that they have more insurance against travel-related problems than is actually
the case.
"There is considerable confusion among the traveling public
over just what travel insurance covers," notes Judy Melanson, project manager
and Vice President at Chadwick Martin Bailey. "In order to uncover some
of the myths and misconceptions about travel insurance, we compared a typical
travel insurance policy with the travel-related coverage available from a cross-section
of credit cards, health insurance plans and homeowner's policies. While those
products sometimes provide limited coverage for travel-related problems, there
are often exclusions and conditions that even the most thorough traveler can
miss. With a comprehensive travel insurance policy from a third-party provider,
a traveler knows that he or she is not vulnerable to gaps in coverage."
Key findings of the market analysis include:
- Trip Cancellation/Trip Interruption - A comprehensive travel insurance
policy is the only source of trip cancellation coverage available to travelers
for reasons of illness, injury, inclement weather, jury duty or organized
labor strikes. A complete travel insurance policy will reimburse a traveler
for the pre-paid, unused, non-refundable portion of a trip payment, plus the
cost of returning home or rejoining the trip. Credit cards do not offer trip
cancellation coverage.
- Medical Expenses - Most comprehensive travel insurance policies cover
necessary medical and surgical expenses while traveling, usually as primary
coverage. Primary coverage means that the
travel insurance company will pay the traveler first, rather than supplementing
any payment by the traveler's health plan or HMO. Domestic medical plans generally
provide some coverage outside of the United States, but a traveler must carefully
review the fine print to understand conditions and exclusions, since some
plans only cover emergency care. Travelers with Medicare are not covered outside
of the U.S.
- Medical Evacuation - Emergency medical evacuation and transportation
to the nearest adequate medical facilities is a standard benefit of most comprehensive
travel insurance plans. While some credit cards will arrange emergency medical
transportation, it is always at the cardholder's expense. The more compete
travel insurance plans will also pay airfare for a special medical escort
if recommended by the attending doctor.
- Baggage Protection - A comprehensive travel insurance policy that
covers lost or damaged baggage will often provide coverage above and beyond
the standard reimbursement by the airlines. A travel insurance policy that
offers comprehensive baggage protection will not only pay for damage to or
loss of baggage, but may also take over baggage tracking by liaising with
airlines to find and return lost luggage to insured travelers. Homeowner's
insurance, conversely, may not cover bags that are stolen, and may only cover
bags that are damaged by "fire and water."
- Car Rental Accident Insurance - A dedicated car rental collision
damage policy that pays "primary coverage" will pay for damage to
a rental car, regardless of the insured renter's personal auto insurance coverage,
and will protect a traveler against the threat of higher future premiums.
Personal auto insurance, when used to insure a rental car, is subject to premium
increases and insurance surcharges in the event of an accident. Some credit
cards also offer car rental protection when the card is used to pay for the
rental, but most coverage is secondary, and will only cover expenses that
are not covered by personal auto insurance.
About Chadwick Martin Bailey
Chadwick Martin Bailey (chadwickmartinbailey.com) is a Boston-based research
and consulting firm that uses primary and secondary research and measurement
to help its clients identify and penetrate markets, develop products, improve
service delivery and build brand value. Tour and travel clients include Hilton
Hotels, Saga Holidays, Harrah's Entertainment and AAA.
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