By Carlos Werneck | Asteroid Assistance Translated versions: EN + ES pending

There's a reason your travel insurance card has a phone number in fine print and a different company name on the back. The industry has a secret it doesn't advertise: the company that sold you the policy probably has no idea what to do when you actually need it.

Here's what they don't tell you at checkout.

1. Most Insurers Outsource the Hard Part to Someone Else

When you buy a travel insurance policy, you're buying a promise. What you may not know is that the company making that promise often has no capability to keep it themselves.

The dirty secret of travel insurance is the TPA — Third Party Administrator. When you call that emergency line at 2am from a hospital in Miami or Munich, you're not talking to your insurer. You're talking to a TPA: a separate company hired to handle the actual work of finding you care, authorizing treatment, coordinating with hospitals, and managing your case.

Why does this matter? Because insurers are in the business of selling policies, not managing emergencies. Statistically, only about 5% of policyholders ever use the service. So the calculus is simple: outsource the messy part, keep the premium. The TPA market is full of companies servicing dozens of travel brands simultaneously, with no loyalty to your specific insurer — or to you.

The incentive structure is worth understanding clearly: many TPAs are paid to contain costs. That means steering you toward cheaper care, questioning authorizations, delaying approvals, and finding reasons to deny claims. They're not evil — they're optimizing for the wrong metric.

Why Asteroid is different: Asteroid was founded by the people who run the TPA. MDabroad, Asteroid's operational backbone, has spent years as the TPA that other insurers hire. We know exactly how this system works because we built and ran it for them. When you call Asteroid, you're calling the company that does the work — not a middleman hired to minimize the cost of doing it.

2. Reimbursement-First Is a Trap

Here's how most travel insurance actually works in practice: you get sick or injured abroad, you pay the hospital bill out of pocket, you keep every receipt, you fill out claim forms when you get home, you wait 30 to 90 days, and then you find out whether you'll be reimbursed — and for how much.

This is the reimbursement model. It is, politely, a disaster for travelers.

A three-day hospital stay in the United States can cost R$80,000 to R$200,000. An ambulance ride alone runs R$7,000 to R$25,000. Very few travelers can front that kind of money and wait months to get it back. And reimbursement claims are where insurers have the most leverage: they can dispute the necessity of treatment, question the reasonableness of charges, apply deductibles and co-pays you forgot were in your policy, and — most frustratingly — take their time.

The standard to look for is direct payment and direct coordination. A real travel insurer should be able to call the hospital, establish a guarantee of payment, and get you into treatment without you having to swipe a card you can't afford.

What Asteroid does: In most cases, we pay providers directly. Our MDabroad team contacts the hospital or clinic, verifies your coverage, issues a guarantee of payment, and coordinates your care. You focus on getting better. We handle the paperwork.

This isn't always possible — some providers, particularly in smaller cities or remote areas, require upfront payment. But in most major destinations and with our network of credentialed providers across 162 countries, direct coordination is the default, not the exception.

3. They Don't Actually Want You to Use the Service

This is the one nobody says out loud.

Travel insurance is sold on the premise of protection. But the business model only works if most people don't claim. The industry average claims ratio — the percentage of premiums paid out in claims — hovers between 30% and 50% for most travel insurers. That means for every R$100 in premium collected, only R$30 to R$50 goes back to policyholders who actually need it.

The other R$50 to R$70? Operations, commissions, marketing — and profit.

This isn't a conspiracy. It's math. And it shapes every decision an insurer makes about how to handle a claim.

When you call a travel insurance emergency line at midnight from a hospital in Lisbon, you're entering a system that was optimized — however unconsciously — to reduce payouts. The questions you're asked, the documentation you're required to provide, the timeframes you're given, the definitions buried in your policy — all of it creates friction. Some of that friction is legitimate process. Some of it is attrition strategy.

The claims that get denied most often aren't fraudulent. They're legitimate claims from travelers who didn't know they needed pre-authorization, or who sought treatment at a non-network provider, or who described their condition using the wrong words on a form.

The industry term for this is "claims leakage prevention." Your term for it is probably something less polite.

Why Asteroid is different: We were built by the people who pay the claims. MDabroad's entire business model depends on getting policyholders into care quickly and resolving cases efficiently — because that's what our insurer partners pay us to do. When Asteroid customers have a medical emergency, our MDabroad team proactively contacts the hospital, authorizes treatment, and manages the case. We're not waiting for you to file paperwork. We're not looking for reasons to deny.

We want you to use the service. Every resolved case is proof that the model works. Every claim paid on time is a broker referral and a renewal.

Aligned incentives are rare in insurance. Ours point in the right direction.

The Bottom Line

The travel insurance industry built itself around a low-claims probability and high-premium volume. That math works great for shareholders. It works less well for the Brazilian family in a hospital in Orlando at midnight, trying to figure out who to call.

Ask your insurer three questions before you buy: 1. Who actually handles my emergency — you, or a TPA? 2. Do you pay providers directly, or do I pay and claim later? 3. What's your average claims resolution time, and where is that documented?

If they can't answer all three clearly, keep looking.

Asteroid was built by the people who answer those questions for a living. We know what good looks like. We built the product around it.

The Coverage Limits That Actually Protect You

Beyond the business model, there's the coverage itself. Most travelers underinsure because they don't understand the costs:

Watch for sublimits: many policies advertise "up to R$300,000 coverage" but cap individual procedures — surgery at R$20,000, ICU at R$5,000/day, evacuation at R$30,000. Read the fine print.

Ready to see the difference? Get a quote in 60 seconds and experience what travel insurance should have always been.

Carlos Werneck is Asteroid Assistance's data and investigative writer. He spent 8 years covering insurance and consumer protection for major Brazilian financial publications before joining the Asteroid editorial team.

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