What do we mean by ‘trip cost of $0?’ It means purchasing a comprehensive package travel insurance plan and choosing to cover none (zero) of the pre-paid non refundable trip costs.
You may have heard or read that this is the way to get full travel insurance protection, all the medical, dental, evacuation, etc., without paying the higher premium related to trip cancellation.
Travelers who are confident that nothing will go wrong and they won’t have to cancel are more likely to try this option because they believe it is less expensive. And it’s too risky.
As with all insurance plans, the devil is in the details and in this case, the detail is the travel plan’s effective date. When you purchase a trip cancellation travel insurance plan – a package plan, that is – and select to cover $0 of your trip costs, the policy’s effective date becomes the later of 12:01 a.m. on your scheduled departure date or 12:01 a.m. the day after your purchase date.
This means the effective date of the policy becomes, in effect, the day of your departure because you can’t buy a travel insurance policy after your scheduled departure.
When you understand that the’ look-back’ period is the amount of time (60, 90, or 180 days) prior to your policy’s effective date that the insurance company will study for pre-existing conditions, you start to understand.
Even though you purchase your travel insurance plan well ahead of your scheduled departure, if you experience a medical condition within the look-back period prior to your scheduled departure date (which is now your policy’s effective date), then any recurrence of that condition during your trip will not be covered.
Let’s say that in March, you plan and pay for a summer vacation to start on July 1st. You purchase your travel insurance plan and enter 0$ trip cost, because you are confident you won’t have to cancel.
Let’s also say you experience a medical condition in April and you recover. You are medically stable and ready to travel but during your trip, you become ill with a medical condition related to your previous illness. Your medical care will not be covered because the pre-existing condition occurred during the look-back period prior to your scheduled departure date.
Damian Tysdal is the founder of CoverTrip, and is a licensed agent for travel insurance (MA 1883287). He believes travel insurance should be easier to understand, and started the first travel insurance blog in 2006.