Difference between U.S. and EU insurance besides price

[CruisinGerman]

Dear friends:

 

I am trying to figure out the difference between the travel insurance system in the United States and the European Union.

 

I went to the U.S. Travelguard site (owned by Chartis/AIG). I typed in full protection for one cruise/tour trip for two people, lasting one month, for a price of $20,000 per person, or $40,000 total. The website came up with a quote of $1,800 per person for the insurance.

 

Here in the European Union, we have a product called AIG Travel Platinum (also owned by Chartis/AIG). It provides unlimited medical coverage, and provides for unlimited cancellation/interruption because the clause of the insurance states full amount up to the invoice price of your trip. This is an annual, multi-trip policy and costs 120 euros (about $160) per person per year.

 

So for all you insurance experts out there, can anybody tell me what the difference in coverage between $1,800 single trip, and $160 multi-trip, annual policy, would be?

 

Kind regards,

 

Gunther and Uta

[sirwired]

If you could post a link to the policy, that would be helpful. I wasn't able find it during a quick search.

 

If I had to guess, I would say that the cheaper policy likely excludes much more than the more expensive policy, but without access to the policy text, it's hard to be sure. For instance, a great many UK travelers have stated that their policies excluded the recent volcano as a covered reason not to get to their trip. (They stated that the policy excluded "Acts of God". Such an exclusion does not appear in any U.S. policies.)

 

In addition, some posters here have stated it is very difficult to book a trip in the UK without trip insurance. If everybody has insurance, the average risk is lower because otherwise the most heavily insured are those most likely to cancel.

 

SirWired

[cruiseco]

Dear friends:

 

I am trying to figure out the difference between the travel insurance system in the United States and the European Union.

 

I went to the U.S. Travelguard site (owned by Chartis/AIG). I typed in full protection for one cruise/tour trip for two people, lasting one month, for a price of $20,000 per person, or $40,000 total. The website came up with a quote of $1,800 per person for the insurance.

 

Here in the European Union, we have a product called AIG Travel Platinum (also owned by Chartis/AIG). It provides unlimited medical coverage, and provides for unlimited cancellation/interruption because the clause of the insurance states full amount up to the invoice price of your trip. This is an annual, multi-trip policy and costs 120 euros (about $160) per person per year.

 

So for all you insurance experts out there, can anybody tell me what the difference in coverage between $1,800 single trip, and $160 multi-trip, annual policy, would be?

 

Kind regards,

 

Gunther and Uta

 

A link to the UK plan would be hlkpful. But in general you'll find that the UK annual plans have:

 

Low coverage limits for trip cancellation/interruption. I doubt the annual plan you're looking at will cover a $20K trip cost. Most are limited to about 5K pounds.

 

The trip cancellation amount is usually per year, not per trip. If you cancel the first trip of the year and use up the policy maximum benefit you have no coverage left for later trips.

 

You can be denied coverage for pre-existing medical conditions or forced to pay a higher premium and many exclude those over a certain age from coverage. And if all pre-ex conditions are not disclosed in advance and approved you will have no coverage. US based insurers do not require that you divulge your health history to a third party unless a claim arises. And, if you meet the requirements to get coverage for pre-ex coverage (buy in a certain time frame, etc) you're covered at no additional cost.

 

Making pre-ex coverage available to all at no additional premium obviously adds to the insurer's risk of loss.The ability to pick only the low-risk travelers as clients keeps the costs for the UK insurers low. Since in many cases UK travelers are forced to buy coverage, the insurers also have a larger pool of younger, healthier clients to cherry-pick.

[CruisinGerman]

Dear friends:

 

Here is a link to the pdf which contains the entire policy. The schedule of benefits is at the end, and the policy we purchased is the PLATINUM policy.

 

http://www.insurancebookers.es/export/sites/ES/polizas/PDF/post/multirisk-policy-wording.pdf

 

This is not a UK policy, but rather a continental European policy. The Gold version seems to limit trip cancellation to 7,000 euros. The Platinum version does not seem to have a limit. (There is also a UK version of this policy which appears to have more limits.)

 

We are not interested in the medical coverage, since we are already covered on an unlimited basis and worldwide. We purchased this insurance solely for the travel-related aspects not having anything to do with medical coverage.

 

Thanks for taking a few minutes on my behalf.

 

Kind regards,

 

Gunther and Uta

[cruiseco]

Thanks for the link. I assume you're living in Spain.

 

You're right about no upper limit on the trip cost. But they do impose a 10% deductible on any trip cancellation losses over 2000 pounds. So in the case of a cancellation you'd be out of pocket roughly the same amount as you would pay with the US Travel Guard policy, however, if you don't cancel you haven't spent that money. That's a good deal as long as you are willing to lose that 10% amount at the back end if you do cancel. If it was me, I'd go that route -- better to only have to lose the money in the case I do have to cancel.

 

"A claim under this contract of general insurance is covered for 100% of the first £2,000 and 90% of the rest of the claim without any upper limit."

 

As I suspected they do not cover pre-existing medical conditions and they will not offer coverage to those over 65 which obviously keeps their losses and premiums down.

 

"This cover is not available for persons aged over 65 years."

 

"In particular we do not cover medical problems which you or they had before the cover started"

 

They really are strict about disclosing anything that might result in a claim and can deny coverage based on your disclosure:

 

"You must tell AIG UK Limited if you know about anything which may affect their decision to accept your insurance (for example, dangerous activities or a health condition). If you are not sure whether to tell AIG UK Limited, tell them anyway."

 

And not only do you have to disclose any health situations you might have but you also have to disclose any health situations your close family members may have or else:

 

"We will not cover the following:

1. Claims will not be covered if they arise from or result from, a trip that you take or, any person whose ill health would force you to cancel or cut short your trip:

 

(a) If the claim relates to a medical condition or illness related to a medical condition which you or they knew about before you bought this insurance."

 

So even if you didn't know about the medical condition of the relative, as long as the relative knew about it you're out of luck. That's brutal.

[CruisinGerman]

Dear friend:

 

You may be reading the UK version of the policy. The euro version of the policy for Spanish residents, in its Platinum mode, has NO deductible.

 

Thankfully, as of the date we purchased the policy, neither my wife nor I have, and none of our friends, relatives, or business associates, have, any KNOWN pre-existing medical conditions that would purport to trigger the exclusions of the policy.

 

I think it is a good deal, unless I am reading something wrong .......

 

Kind regards,

 

Gunther and Uta

[cruiseco]

Dear friend:

 

You may be reading the UK version of the policy. The euro version of the policy for Spanish residents, in its Platinum mode, has NO deductible.

 

Thankfully, as of the date we purchased the policy, neither my wife nor I have, and none of our friends, relatives, or business associates, have, any KNOWN pre-existing medical conditions that would purport to trigger the exclusions of the policy.

 

I think it is a good deal, unless I am reading something wrong .......

 

Kind regards,

 

Gunther and Uta

 

I think you're correct -- the quoted part of the plan wording

 

"A claim under this contract of general insurance is covered for 100% of the first £2,000 and 90% of the rest of the claim without any upper limit.""

 

seems to only apply if the underwriter (AIG UK) is financially unable to pay the claim then the financial services restitution fund would compensate you according to the schedule shown. That's even better for you if there is no upper limit.

[CruisinGerman]

Thank you for your time. I really appreciate it.

 

Well, we have purchased the policy -- I think it is worth the money and is very inexpensive if it indeed works.

 

I believe that, as you mention, it is subject to the UK Financial Services scheme, because that division of AIG is based in the UK, but markets throughout all EU countries through the EU open passport provisions for financial services (banking, insurance, investment).

 

Interestingly enough, if you go to the website http://www.insurancebookers.com and select the UK policy, I believe the coverage is less and more restricted than in the euro versions (or at least the Spanish version we have purchased). For example, the UK version has a cap of ten million pounds medical cover. The Spanish euro version has unlimited medical cover. The UK version has a maximum trip cancellation benefit of 5,000 pounds -- the Spanish platinum version appears to be unlimited. It is surprising how the benefits are different even throughout the EU. Spain is not a very insurance-savvy country and I assume the companies have to up the benefits to make the policies more attractive, so that people will buy them.

 

Kind regards,

 

Gunther and Uta