You might be surprised who buys travel insurance and who doesn’t. Especially if you have a team going overseas.
You also might be shocked to find out how many short-term teams go on projects overseas or to participate in sports camps, etc…without basic protection against injury or sickness (Or maybe just hoping someone else will pay for it if something bad happens).
Half of Americans don’t even know what travel insurance covers, according to a new Princeton Survey conducted on behalf of the Points Guy, the popular credit card rewards site. The survey found that only 37% of Americans say travel insurance is worth the cost and only 21% purchase travel insurance (7% always purchase travel insurance and 14% sometimes do).
Of course, many of these travelers are confused over flight insurance (basically a life insurance policy for the flight only) and trip cancellation insurance since those can also rightly be called “travel insurance.” And depending on non-refundable up-front trip costs, trip cancellation insurance might be necessary, but understand that trip cancellation is to help you get back some of your money if you can’t go on a trip, not usually protect your health or offer emergency evacuation in an emergency when on a short-term trip. These consumers say that trip cancellation protection is the main reason they purchase travel insurance, usually at the encouragement of their travel agent. Fifty-two percent gave this as the main reason for their purchase, followed by medical coverage (27%). But that is a huge mistake. And the travel industry is not doing a good job explaining things or protecting travelers.
“A refundable plane ticket is a better bet if you might change your mind,” The Points Guy advises. “Travel insurance is intended more for unforeseen circumstances such as medical emergencies and natural disasters.”
So why do up to 75% of short-term travelers and teams risk going overseas without international health insurance? They don’t realize that domestic health insurance won’t pay or reimburse them unless they are in-network or they are at risk of dying. And it definitely won’t cover emergency evacuation. A secondary policy with evacuation is worth it for that feature alone. Otherwise, if a team member got hurt or injured in a car accident, they would have to pay upfront for medical treatment (even in countries with nationalized health care). What some travelers fail to realize is that nationalized health care is not “free.” Workers in other nations pay extraordinary amounts in federal taxes to cover their healthcare. And foreigners are usually charged for services rendered up front.
A credit card may pay to replace a missed flight, but good luck at getting them to pay to set a broken arm or the hospital fees if someone has a kidney stone attack while volunteering overseas.
“Travel insurance (meaning “trip cancellation”) can be extraordinarily helpful in certain situations, such as expensive trips to international destinations…,” said Brian Kelly, founder of ThePointsGuy.com. “However, people need to know that even trip cancellation doesn’t protect against all types of trip cancellations. It usually won’t reimburse you if you simply change your mind and decide not to go on a trip.” And coverage for “cancellation for any reason” usually ranges from 50-70%.
All this confusion is one reason many teams work with Good Neighbor Insurance to help recommend the right policy to their teammates or group members. That way, for around a $1-2 a day depending on age, they can rest assured that their members are protected and that they are not putting anyone at risk if something terrible were to happen. Some teams will build the cost of short term travel medical insurance into their overall trip costs. That is also a wise decision. Either way, Good Neighbor has been helping thousands of teams and volunteer organizations as well as non-profits, every year for over 17 years now. Along with serving social good businesses, and other expatriate travel, volunteer team travel insurance is one of our areas of expertise.