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DO YOU SKIM OVER the fine print? Two recent incidents involving insurance coverage made me rethink my tendency to do just that. One incident alerted me to a major problem. The other saved me money.
Let’s start with the problem. It was time to renew our homeowner’s insurance. In looking over the policy, something didn’t look right. In the section for dwelling, which is defined in our policy as alterations and other improvements, we had $5,000 worth of coverage. That sum would potentially need to cover the replacement of appliances, flooring, fixtures and so on. Meanwhile, for personal property, we had $250,000 of coverage. This is defined in our policy as furniture and clothing.
I think you know where this is going.
When I called our insurance agency to ask if I understood the designated amounts correctly, an employee acknowledged there was a problem. I was told to call the insurance company directly.
What we discovered was that our coverage had been flipped. Even though we all have the impression that our personal items are valuable, it’s far more important to be able to replace the essentials in our homes, such as appliances and flooring. The $5,000 would barely cover the price of one or two appliances.
What about the happier incident? We have some trips planned, and there’s the issue of travel insurance. Since the pandemic, travel has gotten dicier, so finding the right policy is important.
In my research, I discovered something positive: We already have significant coverage through our credit cards. For example, according to the American Express literature, I’m covered for $3,000 of lost or stolen baggage. Not bad.
The amount for trip cancellation also looked good to me. I was skeptical, so I called American Express. The fine print said it provides secondary coverage. A rep confirmed that if I didn’t have primary coverage, its secondary policy would indeed cover me.
Still wanting to see this in writing, I went to the website to confirm what I had been told. That’s where I came across the “noncontribution clause.” That means the coverage won’t apply if any other insurance is in place. Since I plan to use only American Express’s coverage, that won’t be a problem. I discovered that other credit cards have similar features.
There are still restrictions, such as the coverage not being available in all states. The coverage could also change or be eliminated at any time. I’ll have to check if there are any changes when the card renews and pay attention to emails from American Express.
Will I read all the fine print from now on? Probably not. I let my husband do that.
Are you traveling abroad? If so, will your medical insurance cover you (Medicare does not, some Medigap plans do, but with limits). If so, do you have medical evacuation and repatriation coverage? Will your AmEx coverage pay for an extended stay if you test positive and have to quarantine before you can fly home?
We will be mainly in the states with a side trip to Canada. Yes, our Medigap covers some of our medical expenses. For major ones, we have a Medjet Plan that takes care of repatriation and will get us home for medical attention if we’re more than 150 miles from home. If we have to deal with Covid, Amex won’t cover us, but we’re taking our chances on that and will have to pay for quarantine. The Covid Policies are as outrageous as a hotel stay.
I was focused on reimbursement of travel expenses, versus medical. You pose good questions and maybe a follow-up blog/article.
Might be a good idea, now people are traveling again. You rather left the impression that credit card insurance was all you needed. I certainly wouldn’t rely on it for international travel. I also wonder whether someone with PPO/HMO type medical coverage needs more than that for domestic travel, never been an issue for me. Even the young and healthy can have an accident.
BTW, your home owner’s/renter’s insurance should cover your belongings when traveling. Rental car coverage is also an issue for some people and there are a couple of countries where credit card coverage doesn’t work for that. Reimbursement of travel expenses has seldom been an issue for me, since most of them have been refundable, mainly a concern if you book an expensive tour or cruise.
Nice reminder to periodically check our policies and pay attention to the details. In a similar vein, while visiting Germany recently I spoke with my niece who’s an officer in the USAF. She’s a smart person who just didn’t happen to know that you can have different deductibles on your car insurance. So when she had to replace a cracked windshield in Germany on an American car she ended up paying a $500 deductible because she didn’t know that the comprehensive deductible could have been set to zero (for a relatively small additional premium) versus her higher deductible on collision. Ugh.
After reading your article I think I’ll go double check my house policy today.