Taking a Trip? Information About Travel Insurance You Should Know Before You Hit the Road

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Arizona Department of Insurance
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Starting July 1, 2020, we became the
Department of Insurance and Financial Institutions (DIFI).


Whether it's a mini-break or an international tour, taking a trip requires planning and can cost a lot of money. Unexpected circumstances like injury, illness, flight delays or natural disasters could cut a trip short, leaving you with unforeseen costs. There are insurance options to help keep you financially protected

TOP CONSIDERATIONS
Cost of travel insurance: Travel insurance usually costs between 4-10% of a trip's price. For example, for a trip that costs $5,000, travel insurance could range from $200 to $500 depending on the coverage.

Types of travel insurance: There are several types of categories of travel insurance including:

  • Trip cancellation. Reimburses pre-paid travel expenses if you are prevented from taking your trip for a reason covered by your policy. It is typically included in every comprehensive policy. You will usually receive reimbursement if your trip is cancelled for: unexpected illness or injury of you or a traveling companion that deems you unfit to travel; hospitalization or death of non-traveling family member; weather or common carrier issues; unforeseen natural disaster at home or the destination; a legal obligation such as being called for jury duty or serving as a witness in court.
  • Travel medical and major medical. Provides protection if you become ill or injured while traveling. Travel medical insurance provides short-term medical coverage.
  • Emergency medical evacuation. Provides coverage for services such as air evacuation and medical transportation to the nearest adequate medical facility then home if warranted. This type of coverage is useful if you're traveling to a rural area without easy access to medical facilities.  In the event a person passes away during travel, repatriation coverage will cover for the insurer to handle the necessary transportation.
  • Accidental death and dismemberment. Provides coverage to beneficiaries if you die in an accident on the trip or pays a sum to you if you lose a hand, foot, limb or eyesight from an accident. Some plans only apply to an accident that occurs on an aircraft.
  • Baggage loss. Reimburses for loss of baggage or personal items.
  • Cancel For Any Reason (CFAR) policies. These policies are more expensive and typically only reimburse you a percentage of your travel costs. The reason for cancellation is not relevant. There is usually a time frame for when cancellations are allowed, and you must insure all of your pre-paid and non-refundable expenses. CFAR policies are usually added as an extra option in addition to trip cancellation coverage.

EPIDEMICS AND PANDEMICS
Travel insurance policies typically exclude epidemics and pandemics. According to Allianz Global Assistance, a travel insurance provider, "Trip cancellations and trip interruptions due to known, foreseeable, or expected events, epidemics, or fear of travel are generally not covered."

Coronavirus (COVID-19) is a known event, meaning it is not likely that travel insurance policies will cover changes in plans or cancellations for that reason. Review your travel policy to find out which exclusions apply.

There may be coverage if a specific country imposes travel restrictions. Some airlines and tour companies will allow cancellations outside of an insurance policy. Additionally, travel policies with medical coverage may cover any illnesses or hospitalizations that occur during a trip, but you need to review your policy to see if your policy is one of them.

Check the language in your policy to find out what is and is not covered.

HOW TO PROTECT YOURSELF

Determine if travel insurance is right for you. Ask yourself:

  • What are the chances you'll be impacted by severe weather or another event?
  • How willing are you to take risks?
  • How much are you willing to pay for a back-up plan?
  • Do you have questionable health or is a loved one ill?

If you cannot afford to cancel and rebook your trip or your health insurance doesn't cover you abroad, you should consider travel insurance. You typically don't need travel insurance for short trips close to home.

Know the coverage limitations, exclusions, and fine print: Each type of insurance has its coverage limitations and exclusions.

  • Travel cancellation: Exclusions might include canceling your trip due to being detained by customs or having to cancel due to a work obligation. If your flight is delayed, you may or may not be covered. Some policies only cover trip cancellation claim if you lose more than 50% of your scheduled trip length due to a covered delay. You also must make a good faith effort to continue your travels using alternative means. A "Cancel for Any Reason" policy is an option for broader coverage but reimbursement is usually for less than the full cost of the trip.
  • Travel medical and major medical insurance. Find out if your policy requires you to obtain prior approval before seeking medical care. Also check if any pre-existing medical conditions will exclude you from coverage.
  • Emergency medical evacuation/repatriation: Coverage may not cover you if you're participating in an activity your insurer considers dangerous such as sky diving. There are specialty insurance products for some activities, such as SCUBA diving.

Be sure to ask about coverage limitations or exclusions before you commit to buying an insurance product.

Don't wait until the last minute: Travel insurance is intended to protect travelers against sudden and unforeseen events. If, for example, you are heading to Florida in two days amid hurricane predictions, purchasing travel insurance at the last moment isn't likely to help you. Typically, if you buy travel insurance after a winter or tropical storm is named, your plan won't provide coverage for claims related to that event.

Homeowners will cover your possessions during a trip: Most homeowners insurance policies cover personal property lost or stolen during a trip. Check with your home insurer to see what they cover while you are traveling. If you have expensive items, you might want to purchase a to add to your current homeowners policy to cover those items.

TOP THREE THINGS TO REMEMBER

  • Read your policy to determine if travel insurance covers the types of events that you want to cover.
  • Review the policy thoroughly. Ask about any coverage limitations or exclusions.
  • Remember, your homeowners policy should protect your possessions while traveling. But if you have expensive items, consider purchasing additional coverage.
Insurers Offering Individual Health Insurance in Arizona

Lists insurance companies that are offering health insurance to individuals and families in Arizona in 2020.  Open enrollment starts November 1st and now runs through December 17th, 2019.  Individuals can start shopping for coverage now at healthcare.gov or cuidadodesalud.gov (Spanish)

Notice of Proposed Rulemaking - Corporate Governance Annual Disclosure Model Regulation In 2019, the Arizona Legislature adopted the NAIC Corporate Governance Annual Disclosure Model Act at Arizona Revised Statutes (“ARS”) by enacting the Corporate Governance Act at Title 20, Chapter 2, Article 16 (Laws 2019, 1st Reg. Sess., Ch. 180, § 1).   The Department of Insurance (“Department”) seeks to adopt the correlate Corporate Governance Annual Disclosure Model Regulation.  ARS § 20-492.02 allows the Department to adopt rules to carry out the Act upon notice and an opportunity to be heard.  The Legislature has exempted the Department from Title 41, Chapter 6 for one year after the effective date of the Act.  (Laws 2019, 1st Reg. Sess., Ch. 180, § 2.)
Arizona's Surprise Bill Resolution Report for 2019

As shown in the attached report prepared pursuant to A.R.S. § 20-3118(A), the Department of Insurance received 91 requests for dispute resolution in Calendar Year 2019.  Of those, 53 have been resolved or closed, and health plan enrollees saved $41,538 by submitting their surprise bills for resolution.  

Not all health care bills qualify for the surprise bill resolution process.  The Department's Suprise Out-of-network Billing Dispute Resolution website (https://insurance.az.gov/soonbdr, and especially the section entitled, "I got a surprise bill. Can I submit a request for arbitration?") lists conditions when a health care bill may not qualify under Arizona law for the dispute resolution process.  But for those that do, the enrollee will only be responsible for paying the enrollee's cost-sharing amounts (copay, coinsurance and deductible) if the enrollee provides information the Department needs, and participates in an informal settlement teleconference with the health care insurer and the health care provider.

Fire Readiness and Your Insurance Coverage

Complete three steps to be prepared

STEP ONE: Inventory your contents. 
Making a record of what you have provides two major benefits.  First, it could help you estimate the cost of replacing your contents, which you could use to make sure you have enough insurance coverage.  Second, it will help you identify missing or destroyed items if you need to file an insurance claim. Keep your inventory records in a safe place outside your home, such as a safe deposit box at a bank, or in a secure online location. 

  • The National Association of Insurance Commissioners (NAIC) has a free app called, “MyHome Scr.APP.book,” available from Google Play and from the Apple App Store, which can help you keep track of your personal property. 
  • The Insurance Information Institute provides advice that can make creating a home inventory easier (https://www.iii.org/article/how-create-home-inventory).

STEP TWO: Understand what your homeowners’ insurance policy covers.
If you do not have your policy on hand, get a copy from your insurance company or insurance agent. Then, make sure your policy provides enough coverage for your dwelling, contents and additional living expenses.

  • Dwelling Coverage:  This pays to reconstruct your home, from ground up if necessary.  It does not include the cost of the land on which your home sits because you will still have that, but it should include the cost to remove a destroyed structure and replace it a home that is similar to what you had prior to the fire.
  • Contents Coverage:  This pays to repair or replace your personal belongings. Your policy may provide contents coverage based on a set percentage of your dwelling coverage, but you can pay for more contents coverage if you think you need it. 
    • Check to see if your coverage will pay “actual cash value” or “replacement cost.”  Actual cash value (ACV) means what an item was worth when it was destroyed based on its initial cost minus depreciation or loss in value due to its age, condition and wear-and-tear.  Replacement cost (RC) means the cost to replace or repair damaged or destroyed property with materials of “like kind and quality”. Claims for damaged or destroyed items will initially be paid based on the ACV of the item.  When the item is replaced, a copy of the receipt must be provided to the insurance company to obtain payment of the balance owed.  Many policies require the damaged items to be replaced within six (6) months.
    • If you have expensive items, such as artwork, jewelry or computers, you can purchase or increase “scheduled” property coverage to make sure you have sufficient coverage for those items.
  • Additional Living Expense (a.k.a. Loss of Use) Coverage. This pays additional costs you may resulting from the property damage.  For example, if you are not able to live in your home, your policy may cover the costs of lodging and food, boarding your pets, etc.

Importantly, insurance policies are often lengthy, detailed documents.  Do not hesitate to contact your agent or insurance company representative if you have any questions. 

STEP THREE: Minimize your fire risk.
Periodically inspect your home for overloaded power strips, damaged electrical cords or other potential fire hazards.  Keep vegetation and combustible materials away from your home.  If you are in an area that is at higher risk for wildfire, follow “Avoiding Wildfire Damage” guidelines published by the Federal Emergency Management Agency (https://www.fema.gov/pdf/hazard/wildfire/wdfrdam.pdf). 

Remain organized and keep good records

If you are the victim of a fire, remaining organized after an event can be difficult, but it is essential so that you can receive the benefits that your insurance coverage provides.

  • Keep all receipts for living expenses (housing, food, etc.) and for all items that you replace or repair.  Insurance companies may require that you submit original receipts. You should either copy, scan or take clear photos of receipts to provide yourself a backup. 
  • Take photos of your property and the damage.
  • Keep records of all your conversations, emails and letters about your claim with your insurance company and agent.  Take notes of conversations, documenting who you talked to, when you talked to them and what you were told. When possible, send an e-mail message to the person with whom you had the conversation to confirm your understanding of what you were told.
  • Do not throw away or destroy damaged property until your insurer inspects the property and tells you in writing/e-mail that you can do so.
  • Take an inventory of the damaged contents.  If you have an inventory from before the fire, use it to help identify items that were damaged/destroyed. 
  • When the insurer inspects the damage, do a complete walkthrough of your property and point out any issues or concerns you have.
  • When beginning the repair process, get multiple repair estimates from licensed contractors (look up records on the Arizona Registrar of Contractors “Contractor Search” page at https://roc.az.gov/contractor-search) with good reputations (look up records on the Better Business Bureau website at https://www.bbb.org).
  • Don’t delay.  Insurance policies generally have restrictions on how long after a fire you can file claims.

Persons with disabilities may request materials in an alternative format by contacting our Americans with Disabilities Act Coordinator at (602) 364-0108. 

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