Travel Insurance For The USA: A Guide

The Australian Government’s Smartraveller website recommends that travellers purchase travel insurance before any overseas trip. According to Southern Cross Travel Insurance, that advice is particularly relevant for the US, which ranks as the 9th most visited destination among its customers.

Medical care in the US is notoriously expensive, prohibitively so in many cases if you don’t have travel insurance.

“It’s not uncommon for travellers to be refused treatment for minor injuries if they can’t show proof of travel insurance. That’s why insurance is so important if you’re visiting America,” an SCTI spokesperson said.

In addition, given the massive geography of the country covering a variety of destinations from beaches to mountains to deserts, it is wise to hold insurance cover for a multitude of events and a variety of potential risks including natural disasters, crime or other types of emergencies.

Health Costs in the US

While the standard of hospital and healthcare facilities in the US is similar to Australia, medical costs are significantly higher.

A visit to a doctor for even a minor issue can cost hundreds or thousands of dollars, and you may be asked to show proof of insurance or your ability to pay before receiving treatment.

The Australian government won’t cover these costs, and there is no reciprocal healthcare agreement between Australia and the US, so you aren’t covered by Australian Medicare in America.

Travel insurance to the US is so expensive because medical care costs are much higher than average for the rest of the world. Since medical claims account for 31% of travel insurance claims in the US, the medical aspect of cover is nothing to be sneezed at.

As with any other international travel insurance, cover for travel to the US is generally available in two main tiers:

Basic travel insurance. The basic tier is broadly focused on medical cover, but includes insurance for unlimited overseas emergency medical expenses, luggage, personal liability and other essential benefits. It is usually the cheapest option available and is suitable for those traveling on a budget or for single trips.

Comprehensive travel insurance. This type of insurance typically includes higher amounts of cover for the essentials benefits such as medical expenses, luggage, personal liability, etc. In addition, it includes cover for travel delays, rental vehicle excess, loss of passports and credit cards, hijacking, disability, accidental death, and so on. Some insurers offer variations of the comprehensive policy that are suitable for multiple trips to the US within a 12-month period.

Optional add-on policies. Given the growing number of Australians heading to the US for cruises, road trips or to the ski slopes, most insurers have come up with add-on policies specifically tailored for the variety of adventure sports and transport options available. These include cruise packs, winter sports packs and even higher cover for rental vehicles.

Most travel insurance policies to the US will not provide cover in the following cases:

1. Illegal activities. Insurers will reject any claims arising if you knowingly act illegally or dangerously.
2. Drunken/drug fuelled behaviour. Insurance cover is specifically void if you cause a disturbance through drunken behaviour or under the influence of drugs.
3. Unattended luggage. Insurers will ignore any claim for loss if your luggage is stolen while it was left unattended in public.
4. Pre-existing medical conditions. Insurers can avoid claims for any major medical conditions, if they have not been made aware of these before taking out a policy.
5. Extreme sports. International travel insurance policies generally don’t provide automatic coverage for things like extreme sports, snowboarding or surfing. An optional add-on cover is required for these activities.

Generally, travel insurance for the US can be purchased from Australia ahead of the trip with almost every major insurer offering basic, comprehensive and add-on covers for the destination.

Typically, such travel insurance can be purchased online, either directly from the insurer’s website, or via an airline booking site. Travel insurance is also easily available over the phone.

Some people prefer to buy cover directly from providers from the US because they perceive this to have wider acceptability during their trip.

In any case, travellers should always consider the following points before buying the policy:

1. The different levels of cover available
2. Their eligibility for the cover
3. How frequently they will travel to the country
4. Any optional add-on cover they might need
5. The level of excess that they will have to pay in case of a claim
6. The cost of the policy
7. The terms on canceling the policy

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When purchasing travel insurance for the US, keep the following in mind:

1. Know your cover limits. International travel insurance is typically designed to meet the needs of travellers visiting more than one specific country. Travellers to the US should, however, pay specific attention to the level of cover they’re purchasing.

“Medical treatment in the US is incredibly expensive, so understanding any limits of your cover is vital,” an SCTI spokesperson said. “If you do unfortunately experience a medical event, you may want to make sure that the limits available to you are sufficient enough to cover healthcare costs in the US.”

This includes making sure you are adequately covered for any pre-existing medical conditions (PECs). Insurers may have differing definitions of what they consider a PEC, and they may or may not be able to provide cover for all of them. Under many travel insurance policies, you won’t be covered for a PEC unless you tell the provider about the PEC and pay the additional premium.

If you don’t make sure you have cover for a PEC, and suffer from a medical event in the US that is directly or indirectly linked to that condition, then you may find yourself without the necessary cover. Southern Cross says so far this year, it has already received multiple claims from travellers to the US of more than $5,000, including several for more than $10,000.

2. Get the right cover. Insurers also recommend that travellers to the US upgrade from an ‘Essentials’ or ‘Medical Only’ policy to a ‘Comprehensive’ policy. “If you’re visiting the US, you may want to consider paying a little more upfront for comprehensive cover, so you’re not caught out later,” SCTI says.

For example, if you are taking internal US flights state-to-state, you may gain peace of mind from having cover for unexpected flight cancellations. Or from having rental vehicle excess if you’re hiring a car for a road trip.

The United States is also known for its cruise trips. So if, for example, you’re taking a New York to Niagara cruise, you may want an add-on cover for the cruise portion of your trip. Similarly, add-on covers are available for winter sports in the mountains or traveling by motorbike down Route 66.

3. Plan for the unexpected with cancellation cover. If you have already spent money booking a trip to the US, insurers recommend you buy your travel insurance well ahead of the trip dates, in case something unexpected happens before you leave that requires you to cancel your trip.

You will need to make sure your cancellation cover is adequate to cover the total cost of the trip including the costs for the flights, accommodation, as well as any pre-paid excursions you have booked and all activities you intend to undertake.