Jeff Rutledge CEO, AIG Travel
Jeff Rutledge serves as the President and CEO of AIG Travel, which provides travel insurance and global assistance services, to millions of travelers around the globe through a network of assistance centers located in Asia, Europe and the Americas. Jeff joined AIG in 1999 where he played an integral role in the development of the company’s global travel e-commerce and operational infrastructure. He later served as Regional Vice President for Asia-Pacific travel, based in Hong Kong and was then promoted to President of the Global Travel Division in 2006.
Travel Insurance 101: Your guide to travel insurance
What impact do travel warnings have on insurance?
The U.S. State Department issues warnings specific to events occurring in countries around the world, such as political uprisings, terrorism and pandemics. While warnings do not typically preclude a traveler from purchasing travel insurance, they should be reviewed as part of the decision process when a traveler is determining whether to travel to these destinations. Travelers should always check with their travel insurance provider to make certain they will be able to purchase a policy to these countries.
In addition, for “U.S. persons” (citizens, permanent resident aliens, U.S.-organized companies and often, their branches), it is important to keep in mind that the U.S. has imposed economic sanctions on certain countries. These sanctions are typically enforced and administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC), and they can impact the conditions under which U.S. persons may travel to certain countries – and even in some limited cases whether U.S. persons may travel there at all. Travelers should ensure their planned trips are permissible under OFAC regulations and should also check with their travel insurance carriers to determine what coverage may be available.
Increasingly, the State Department is also issuing warnings and alerts for traditionally “safe” destinations, and they’re not always in response to traditional security threats. In early September, for example, the government suddenly issued travel alerts for many popular Caribbean destinations in advance of Hurricane Irma. Naturally, events like this lead to a surge in travel insurance inquiries, and unfortunately, in this case, a lot of travelers were surprised to learn that once the storm had already been named (and a travel alert issued), it was too late to purchase a new travel insurance policy. Instead, they needed to have had an existing policy at that point to be covered for eligible losses related to the storm. Travel is unpredictable, so the best way for travelers to ensure they’ll be eligible for coverage is to purchase travel insurance at the time of, or as soon as possible after booking travel.
What are endorsements?
Endorsements are enhancements or clarifications which allow a carrier to tailor an insurance policy to its customers’ needs. In the U.S., where most travel insurance policies are designed to be comprehensive, they rarely apply to individual travel insurance policies. That said, insurance providers like AIG Travel do offer supplemental products – such as collision damage, cancel for any reason and accidental death and dismemberment coverage – for many of their individual travel insurance policies, allowing customers to purchase additional coverage to their base policies.
In commercial settings, endorsements are very common because – traditionally – there’s a greater need for customization with those plans. For example, some Business Travel Accident (BTA) policies offered to corporate clients include a base accidental death and dismemberment benefit to which clients may add other benefits or conditions of coverage (hazards) to build a policy that fits their specific needs. Some endorsements, also known as riders, to a BTA policy include coverage for security evacuation, repatriation of remains, coma and paralysis.
I have an annual policy that is coming up for renewal and the trip I’ve just booked is due to start a month after the renewal date. Will the renewal impact on my coverage?
If you have an annual travel insurance policy, the best way to ensure you don’t experience a gap in coverage is to review your policy before your renewal date. In the given scenario, in which your policy is current when you booked, but not when you will take your trip, insurance policy terms can differ. Some travel insurance providers wouldn’t cover your trip at all, while others might grandfather it in as long as it took place a certain number of days from when your policy expired. Every situation is different, so it’s a good idea to review your policy language well in advance of that final trip and plan accordingly.
What sort of insurance should an employee have in place for international travel?
U.S.-based companies often provide Business Travel Accident (BTA) insurance for their employees who are traveling or working internationally. BTA insurance policies differ from standard travel insurance policies as they enable employers to help provide employees insurance protection in the event of major adverse events (most commonly, accidental death and dismemberment) while they’re traveling overseas. In addition to BTA coverage, employees traveling or working internationally who expect to travel for leisure while abroad may also consider purchasing their own travel insurance policy to protect themselves and their families from personal travel-related risks, trip cancellation, baggage loss and more.
If you need to travel to a high risk area, how do you go about buying insurance? How does this vary between individual/private insurance and buying insurance for your company?
As mentioned earlier, the line between low and high risk destinations has blurred as global events, such as terror attacks and political unrest, have occurred in areas that have previously been considered very stable. Regardless of a traveler’s itinerary, unexpected events may happen, and travel insurance is a way to potentially mitigate that risk and gain access to 24/7 services that may assist the traveler.
For all destinations, no matter the perceived risk, the purchase path is the same: Individual travelers may conduct a simple search online to educate themselves (for example, for U.S. citizens, via www.state.gov) on travel risks and restrictions specific to their destination, and if travel to their destination is advisable, seek information and reviews about leading travel insurance providers. Travelers may visit aggregator websites to compare popular plans, and often, reach out to providers directly to purchase a policy or gather more information. While some credit card companies may advertise free travel insurance for card holders, travelers should remember that this coverage may be very limited, and often excludes critical benefits.
While they may prove valuable anywhere in the world, security benefits are essential for known high-risk destinations. When evaluating providers, travelers should be sure to ask about any special considerations for the destinations they’re planning to visit (many providers have their own version of the State Department’s security alerts) and consider their ability to sufficiently address them. For example, do they have an alert system that can update travelers in real time with events that may impact itineraries? Do they have 24/7/365 support provided over a variety of channels so that travelers can get in touch with them anytime, anywhere? Do they have an in-house customer service and assistance team, so they’re not delayed by coordination with third parties? Policy features such as these can help travelers feel more confident, and make all the difference in an emergency.
Companies that are evaluating coverage options for their traveling employees have many of these same considerations, but may find security benefits to be even more critical as part of their “duty of care” to protect those who’ve left the comfort of their homes to work for them around the world. These companies should work closely with their brokers to find a solution that meets their unique needs based on various factors, some of which include the number of employees they have traveling, the nature of their business and the specific countries they operate in. Generally, for clients with employees traveling to known high-risk areas, AIG Travel recommends – at a minimum – adding security evacuation coverage (which provides coverage for the cost of transportation to bring an insured to the nearest secure location in the event one or multiple of five covered circumstances, such as political unrest, occurs) and war risk coverage (which overrides the standard exclusion that a policy is not payable if the loss is the result of an act of war).
When buying travel insurance, what pre-existing conditions do I need to mention?
When purchasing a travel insurance policy, you’d be wise to flag any condition you’ve been diagnosed with and are being treated for to your provider. Not doing so may jeopardize your coverage if you have an incident while traveling. The good news is that some travel insurance providers waive pre-existing medical condition exclusions if you purchase a policy around the time (as an example, for AIG Travel, it’s within 15 or 21 days, depending on the product) of your initial trip deposit. As with many facets of travel insurance, insurance policy terms will vary for pre-existing conditions. Every provider handles them differently, so you should review potential policies closely to ensure you qualify for coverage.
If I have an annual policy but something changes in my health, do I need to inform the insurer? What sorts of medical incidents would I need to notify them about?
Typically, no. Once you have an annual policy, most providers are not going to require ongoing updates on your health status. That said, you are expected to be judicious when it comes to your health and safety.
What should people look out for when buying insurance? What are the hallmarks of a good quality policy?
Travelers are as diverse as the trips they plan, and the very policy that might be a great fit for you could be a poor fit for another traveler. However, there are a few universal qualities that all good travel insurance plans should have:
- Assistance services: Many people narrowly view travel insurance as a service that can help them work through a travel delay or stolen luggage, but not much else. While these are common travel insurance offerings, a good travel insurance plan will also provide assistance services to help you navigate stressful travel situations – for example connecting you with quality medical care in a foreign country, partnering with credit card companies and local authorities to address identity theft, helping you quickly replace a lost passport, and so much more. If you can’t count on your provider to help you through situations such as these, you’re missing out on one of the most important features of a good travel insurance plan. Make sure your provider excels in this area.
- Comprehensive coverage: When evaluating travel insurance policies, you should be crystal clear on exactly what and how much each one covers. For example, most policies will reimburse travelers for nonrefundable deposits if their trip is canceled or interrupted for a covered reason, but even in this case, may vary on how much they’ll pay out. And while trip cancellation or interruption may be the most common scenario a traveler may experience, it’s far from the costliest. Many people don’t realize their domestic health coverage is unlikely to travel overseas with them. If they need to see a doctor, or in the worst case, require a medical evacuation (which, depending on the destination, could cost as much as $150,000), those expenses are likely coming out of their pocket. As travel can be unpredictable, even travelers in perfect health would be wise to purchase a policy that provides at least some coverage in this situation.
- Customer service: Ideally, travelers will spend very little time talking with their travel insurance provider, but in an emergency, customer service suddenly becomes very important. Travelers may be reasonably confident a provider excels in customer service if it: is helpful and responsive when a traveler is purchasing a policy; provides 24/7/365 support over a range of communications channels; employs its customer service employees directly (rather than outsourcing them, which can cause delayed responses and frustrating red tape); and has received recent awards and recognition in this area. Relatedly, it’s very important to look for companies that are well-established and have the scale to develop and maintain relationships with local resources around the world, which they can leverage to better serve customers.
- Integrated solution: It’s very important for individuals and companies to know the difference between insurance and assistance, and select a provider that does both. Insurance financially indemnifies customers from covered travel losses, while assistance provides logistical support for an unexpected travel needs, such as evacuation, medical attention and other services. Insurance and assistance are separate products, so in a crisis, it’s invaluable to have a provider that offers a single solution and has the capacity to offer a quicker and more nimble response.
How does corporate travel insurance work?
Typically, companies with employees who travel domestically or internationally will offer them some form of coverage, recognizing that these employees are taking on risk in service to their jobs. Interestingly, providers generally define “travel” as any means of transport that is taken by an employee on behalf of or at the direction of a policyholder – so, a policy would provide coverage for walking across the street to meet with a client counts just as it would for traveling by plane to the other side of the world for a conference. Because companies are typically purchasing coverage for a group of people, they have more complex considerations, and thus, a need for more customization than an individual traveler. There are many types of plans available to these types of corporate customers, but the most common is Business Travel Accident (BTA) insurance, which primarily covers accidental death and dismemberment, but can also provide out-of-country accident, emergency sickness medical, emergency medical and security evacuation, repatriation of remains, on-premises coverage and much more. Companies may work internally and with their providers to determine the exact scope of the policies – including who can be covered, when they are covered and for what benefits they’ll be covered. Not only is BTA a great addition to employee benefit packages, supporting talent acquisition and retention, but it also helps employers to meet their “duty of care” obligations to their employees and enhance their risk management procedures. Some companies may also offer traditional travel insurance – no different than what would be offered to an individual, and including medical, travel and security services – for free or at a discount to employees.
If I am sent overseas by my company, do I need to take out personal travel insurance?
The need to take out personal travel insurance wholly depends on the company you work for and the nature of your travel. Individuals should closely review the policies provided by their companies, and if they’re not comfortable with the level of coverage, consider supplementing it with their own travel insurance policy. Those who plan to travel for leisure while abroad, in particular, may consider purchasing their own plan as the one offered through their company may not be comprehensive, valid with an altered itinerary or inclusive of family who may be traveling with them.
Does my annual travel insurance policy cover me for work trips?
While we recommend that you review your specific policy’s terms, most travel insurance providers do not distinguish between a trip for business or for leisure, so if you have an annual travel insurance policy you’ll likely be covered for both trip types. The only caveat to this is that, sometimes, for travel insurance, the annual policy holder must typically travel 100 or more miles away from home to receive coverage.
With corporate travel insurance, under what circumstances do I need to inform the insurer about changes in my employee’s health? What liability do I hold as an employer if my employee fails to disclose something?
For most corporate clients, it would be unrealistic for travel insurance providers to require perfectly up-to-date information on the health of their employees. Again, typically, employers purchase Business Travel Accident (BTA) coverage, which covers all employees and is purchased at such as scale that providers are rarely concerned about a change in health status for any individual employee.
Does drinking really invalidate travel insurance?
No. Drinking, in and of itself, shouldn’t invalidate travel insurance. Providers realize that whether you’re traveling for business or pleasure, drinks may enter the picture. However, travel insurance generally excludes a loss for, caused by, or resulting from intoxication as demonstrated by a blood alcohol level above the legal limit. Always, but especially when traveling, travelers are encouraged to drink responsibly to help protect themselves and others from unnecessary harm.
If an employee is on a business trip and is injured after having a single alcoholic drink, what impact does this have on their corporate coverage?
Generally, none, as long as their blood alcohol level is below the legal limit.
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