Insurance Concerns When Traveling Outside the United States
Most aircraft owners who fly outside the U.S. check to make sure their aircraft insurance will cover them. But, aircraft insurance may be the least of your worries. If you become sick or injured while abroad, for example, will your medical insurance cover you? Will foreign medical intitutions accept insurance reimbursement? If you're travelling on business, are you covered by worker's comp while abroad? Tom Chappell CS&A Aviation Insurance examines these and other issues you should think about before going overseas.
Many of our clients travel outside the U.S. on both business and pleasure. Some utilize their privately-owned aircraft and others take the friendly skies of the commercial airlines. Many plan their trips without a thought for the consequences if a disaster occurs. American travelers are so accustomed to the way we do business in the United States, our protection under the law, and our excellent medical insurance system that we leave our country without a thought of our vulnerability while abroad. Customs, laws, socialized medical systems, no medical system, insurance requirements, and repatriation costs can become more than just an inconvenience. They may become life-threatening.
- What happens if you are injured or become ill while out of the country?
Does your medical insurance pay for medical expenses incurred outside the U.S.?
If on business, does your workers compensation insurance pay for work-related medical expenses?
If your insurance is valid, does it respond on a reimbursement basis or does it pay the medical facility directly?
If you are injured or sick, does your medical or worker's compensation insurance pay your repatriation costs? Repatriation costs are those expenses incurred in moving a sick or injured patient to better medical facilities or back to your home country.
If you travel by personal or corporate aircraft, does your aircraft insurance policy include a territory definition that will accommodate your area of travel?
Do you have the necessary insurance documents for the countries through which you will travel?
Will you enter countries that are high-risk areas? We are speaking of high-risk from the standpoint of property seizure.
These are just a few concerns you may want to research before you take that next trip. The following are generic answers to many of these topics. You must check your specific insurance policies to make certain how your particular situation will be handled.
Reimbursement or Direct Pay?
Your group or individual health insurance usually will pay for medical costs incurred while abroad provided your stay is less than 90 days. The problem many run into is most health policies only pay on a reimbursement basis. In other words, you will pay the medical facility and submit your claim to your insurance company for reimbursement. With this in mind, you should be absolutely certain you have adequate credit limits on your Visa, American Express, or Master Card to allow for payment of expensive medical treatment. It is difficult to anticipate such an occurrence and unwise to carry that much cash. (Note: We are told by travel agents that the Visa card is more universally accepted than other cards. We personally have had no problem with Master Card or American Express.)
What About Pre-Approval?
There is no standard policy wording in health insurance. As a result, we would advise some advance planning and a bit of research before you take your next trip outside the U.S. For example, most HMO plans require pre-approval prior to treatment. (Emergencies are an exception.) It is virtually impossible to achieve this when outside the country. To make things more difficult, you probably don't feel well, you are on a significant time difference between foreign business hours and those in the U.S., and you are probably dealing with a language barrier. Foreign medical facilities may not be familiar with our insurance requirements and may not be much help in the pre-approval of your treatment.
"Foreign Voluntary Compensation" Endorsement
Does your worker's compensation insurance extend benefits for work-related injury or disease if traveling on business outside the U.S.? Many workers' compensation underwriters will add to your current compensation policy a "foreign voluntary compensation" endorsement. This endorsement extends your statutory benefits to include work-related injury and disease occurring outside the United States. In addition to the normal statutory coverage that is extended under this endorsement, a specified limit of repatriation coverage can be added. As mentioned above, repatriation costs are those expenses incurred in moving a patient home from a foreign location or to a medical facility that can better meet the patient's needs.
A Recent Example
Repatriation is usually not included in basic medical insurance policies. Recently, a friend's daughter spent a college quarter studying in Europe. Realizing medical coverage may be questionable for a stay in excess of 90 days; we were asked to provide a short-term foreign medical policy for the student including repatriation expense. As with any other type of insurance, medical coverage for individuals traveling outside their home country varies in price depending upon the deductible, the coverage limit, the coverage period, the age of the insured, the amount of the repatriation limit, and the amount of the medical benefit. In this situation, a broad policy costs less than $60 per month of coverage. For this premium, the policy included a $1,000,000 limit of medical coverage and a $20,000 limit for repatriation expense. This is a small price to pay for such protection.
Territorial Extension on Your Aircraft Policy
As we have discussed in prior articles, every aviation insurance policy defines the approved territory of operation. For coverage to apply, the aircraft must be operated within the policy's stated territory. The standard policy usually includes the United States, Canada, Mexico and the Islands of the Bahamas. Usually the territorial limit can be amended by endorsement to include the Islands of the Caribbean. Although more closely underwritten, most underwriters will endorse the policy to include the Western Hemisphere and many will extend the territory to include worldwide coverage. Keep in mind, as the coverage area increases, the pilot qualifications may become more stringent. The underwriter may make a small premium charge for these extensions.
Although an underwriter may extend coverage to "worldwide," he may impose areas of limitation such as areas of war or conflict.
Mexican Liability Policy
A Mexican aircraft liability policy issued through a Mexican insurance company is mandatory while flying in Mexico. This policy or a certified original certificate must be kept with the aircraft at all times. In the event of a loss or a ramp check, the aircraft is subject to seizure if all paperwork and documentation is not in order.
War Risk Coverage
War risk hull insurance: It is recommended that the "war, hijacking and other perils" exclusion found in most policies be eliminated if planning to operate your aircraft outside the United States. This standard aircraft policy wording eliminates coverage for war, invasion, acts of foreign enemies, hostilities, strikes, riots, civil commotion, labor disturbances, acts of political terrorists, malicious acts or acts of sabotage, confiscation, nationalization seizure, restraint, detention, appropriation by or under the order of any government, hijacking or any unlawful seizure. Although this is just a partial list, you get the idea. This exclusion can be partially written back into the policy by endorsement with some companies or removed in its entirety with others. Depending upon the purpose of use, the insurance company, and the territory involved, the cost of war-risk insurance is 3 to 5 cents per $100 of aircraft hull value. War-risk coverage for a $1,000,000 aircraft would cost $300 to $500 per year.