If youâre a borrower who paid interest on a qualified student loan, itâs possible to deduct some or all of that interest on your federal income tax return with a special tax form for student loans. To do so, youâll need to acquire a student loan tax form commonly known as IRS Form 1098-E. You […]
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This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Mom-and-pop ethnic grocery stores are a common sight on big-city street corners, peddling exotic fruits and cuts of meat. These days, theyâre also increasingly found outside of major metro areas. Pan-Asian, Middle Eastern or Latin markets may be the most common, but youâll find markets dedicated to a single nationality, be it Indian, Korean, Serbian, [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
COVID-19 has made planning ahead a gamble, especially when it comes to travel. It seems every time the virus seems to be on the wane, a new variant and maybe even a sub-variant emerges to launch a renewed attack. News and even rumors can rattle nerves and scuttle travel plans.
How do you plan to travel in this environment? Would you lose your money if youâre forced to cancel a trip?
For more and more people, the solution is to buy travel insurance for their trips in the hopes of being reimbursed should they have to change or cancel. But not all travel insurance covers all pandemic-related cancellations.
Knowing possible pitfalls can help you decide whatâs best for your wallet, your ability to plan a trip and whether you should buy travel insurance.
In some instances, itâs not even a choice. Several countries, including Costa Rica and Egypt, as well as some travel providers, like cruise lines, are requiring travel insurance in one form or another. This can be especially true for unvaccinated travelers. This ensures you wonât become stranded, unable to pay for your medical care, extended stay or evacuation should you contract or be exposed to COVID.
The limitations of standard travel insurance have expanded the appeal of a previously obscure upgrade to standard travel insurance known as âcancel for any reasonâ (CFAR). This option, while significantly more expensive, is more likely to cover the sort of cancellations that COVID has made commonplace.Â
According to travel insurance aggregator Squaremouth, Inc., travel insurance policies with a CFAR add-on typically must be purchased within two to three weeks of the first payment towards the covered trip. An exception is that certain policies that cover only cruises offer CFAR at any time before a final payment is made for a trip.Â
Megan Moncrief, chief marketing officer for Squaremouth, said CFAR has become the go-to plan for more travelers, âWhen the pandemic hit, it became really the main piece that could offer any coverage.â
Traditional travel insurance, she explained, doesnât cover the majority of pandemic-related claims. Moncrief said in a review done by Squaremouth, only 30% of such claims were made by people who actually contracted COVID-19 and had to cancel their trips. This is the only type of pandemic claim that would be covered by most standard travel insurance policies. The remaining 70% of claims were for other reasons, including border closures and quarantines, and thus excluded — though generally would be covered by CFAR.Â
And COVID-19 continues to be a primary reason for travel insurance purchases. According to Squaremouth data, nearly 37% of all searches on its site for travel insurance cited the pandemic as reasons for coverage as recently as Jan. 28, 2022. The second most-popular search filter used on the site: Cancel for any reason at nearly 15%. In contrast, hurricane and weather were searched less than 3% of the time.
Overall demand for travel insurance has increased during the pandemic, according to AAA, which says a recent survey found that 31% of U.S. travelers saying theyâre more likely to purchase it for their trips planned between now and the end of 2022. A standard travel insurance policy typically adds 5% to 10% to the cost of the trip, according to Mark Friedlander, director of corporate communications for the Insurance Information Institute. Adding CFAR on top of that will raise the cost 40% to 60%. And, depending on the policy, the payout for a CFAR claim can be as low as 50% of the loss, experts said. This marks a decrease from policies before the pandemic, which could reimburse 75% to 90% of the loss.
Moncrief said that prior to the pandemic, her company was âslow to recommendâ cancel for any reason because of the expense. Then, it accounted for less than 4% of sales, she said. Now, itâs about 12% of sales, down from a high of 17% in January. AAA advises travelers to consider policies that include a CFAR component.
âAs a purchaser of travel insurance, make sure you understand what you are buying and what the policy covers and what the policy does not cover,â Friedlander cautioned. âNo policy has 100% of everything.â
Travel insurers have made a number of adjustments in response to the pandemic. At the beginning, Moncrief said, travel policies didnât cover medical care for pandemic illnesses. But that quickly changed, and now, if a traveler becomes ill with COVID, itâs covered.
By contrast, insurers now demand their customers first seek reimbursement from the travel service provider, such as an airline or cruise company, that cancelled before filing an insurance claim.
Sometimes, she said, an airline might want to give credit rather than reimbursement. She said insurers will encourage travelers to seek reimbursement before considering whether to provide coverage for such an event.
Friedlander noted that different insurance policies will contain different provisions, and âcancel for any reason,â doesnât necessarily mean âany reason.â He stressed the importance of reading and understanding the provisions of a policy before purchasing it.
Moncrief gave examples of some insurersâ exclusions on CFAR policies:
iTravelInsured Travel LX, TravelSafe Classic and Seven Corners RoundTrip Choice and RoundTrip Basic all have the following language: âThis Cancel for Any Reason benefit does not cover the failure of the travel supplier to provide the bargained-for travel arrangements due to cessation of operations for any reason.â
Charlie Leocha, president and cofounder of Travelers United, an advocacy group, said he typically doesnât buy standard travel insurance unless heâs planning a particularly expensive, all-inclusive trip. âIf youâve got an expensive product, it can be a good deal,â Leocha said. âAll insurance is a great deal if you get sick and canât go on the trip and thatâs why you buy it.â
Leocha said he buys travel medical insurance policies each year, which cover up to six trips and up to six weeks per trip. He said his annual policies cost about $260.
These policies cover his medical needs when he is overseas and also cover his return home. For the rest of his travel, he says he self-insures. What that means is he makes arrangements that are reversible. In other words, he mostly buys refundable airline tickets or hotel reservations that can be canceled at the last minute for any reason without paying a penalty.
This can be difficult, he said, because every airline has different rules, particularly when it comes to travel credits. Some airlines require they be used in 90 days, others might give you a year or six months.
Leocha said his organization is working with the Federal Department of Transportation to implement a pandemic rule requiring airlines to all have the same rule so it wonât be so confusing for travelers. âIâve been pusing like mad to have all the flight credits have the same expiration dates,â he said. âThe airlines have been fighting us tooth and nail.â
This paid off for him recently when he was scheduled to go to Spain. A few weeks before the trip, he took a COVID test in preparation for a get-together with friends. When the test came back positive, he needed to postpone his Spain trip.
Because he wasnât locked in by any of his arrangements, Leocha said, he was able to make the necessary changes and was only out about $50 when everything was said and done.
âSelf insurance is one way to do it,â Leocha said. âProbably the most expensive way to do it is get âcancel for any reasonâ insurance.â
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This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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