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Save/ShareThe largest travel insurance company, AIG Travel Guard, has revamped some of its policies, shaking up the industry.
I'll give a rundown on the biggest of these changes in a sec. But first, let's quickly recap Budget Travel's stance on travel insurance:
If all you have reserved are flights and hotels, insurance generally isn't worth it: You can rebook a flight and only suffer a $100-per-ticket (or so) fee, and hotels rarely have strict cancellation policies. But if you're headed on a cruise or a once-in-a-lifetime adventure, such as a safari, insurance looks better and better, because tour operators and cruise lines (which are less likely to get any last-minute bookings) tend to penalize those people who cancel. You should also consider buying travel insurance when you think the odds are decent that you won't be able to take the trip for one reason or another. Just make sure you understand up front exactly what is and isn't covered, which situations allow you to cancel, and what the cancellation time frame is.
Traditionally, travel insurance policies have limited the reasons for paying out claims. The most common permissible excuses for canceling a trip were a medical emergency or a death in the family. That was about it.
Say you had a boss who is the kind of a jerk who makes his staff cancel their trips to finish a project. You'd be out of luck--and out of your trip expenses--if your boss forced you to scratch your vacaton. Most policies did not cover such situations.
Then, a year ago, the insurer Access America began to allow travelers to insure against trip cancellation due to unreasonable bosses, corporate mergers, and business disasters (such as fires). The cost of this BizPak option is $19 per person, per trip, on top of a standard travel insurance policy.
Thus began a trend in the industry toward offering broader trip insurance options.
A couple of weeks ago, the largest travel insurance company, AIG Travel Guard, rolled out the same "cancel for work reasons" clause, charging $24 a person.
The company also introduced "cancel for any reason"
For a fee, it will add a "cancel for any reason up to 48 hours before departure" clause to select policies. You can be reimbursed for between 50 percent and 75 percent of your trip's expenses. Previously, you could only cancel for a limited set of extreme circumstances.
A tip: When shopping for travel insurance, know that you'll generally receive the best rate and most comprehensive coverage if you buy a policy from an independent insurance agency. You'll save by cutting out the middleman, whether the middleman is a travel agency, tour operator, or cruise company. To compare policies and rates, visit InsureMyTrip.com.
What about insuring against disasters?
Here's Budget Travel's official view: Recent history has shown that travel companies are incredibly sensitive when a terrorist attack or natural disaster occurs, and they almost always drop their usual restrictions and allow their customers to rebook or cancel without penalty. Of course, there's no guarantee that this will always be the case.
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Thanks for the information. I was under the assumption that travel insurace would give you your money back for any reason.
Posted By Justin on September 26, 2007, 9:36 AM
I always take travel insurance and in the past 5 years have used it twice. Once when my mother became ill and once when my flight was cancelled for engine trouble.
I had no problem getting my money back from the insurer. I won't go anywhere without it.
Posted By Nikki on October 1, 2007, 12:17 PM
A timely reminder, and additional advice. If you cancel for medical reasons, be sure you obtain a definitive statement of the medical problem from your Doctor.
Posted By George Brock on October 1, 2007, 1:21 PM
We wasted money on Travel Guard last summer. Our flight out of Nashville was delayed because of an airplane brake problem. We missed our connecting flight to Paris. One and a half days later we finally got to Paris. Not only did Delta not reimburse us for a day and a half of meals, hotel stay and tours, but Travel Guard refused to pay any claim. Then our travel agency, Cultural Heritage Alliance refused to remit anything for our losses. Naturally I have nothing good to say about Delta, Travel Guard or CHA. We are canceling a planned trip to Greece with the same three vendors. Several others in our group have also cancelled.
Posted By Charlotte Dean on October 1, 2007, 1:24 PM
Please tell us what travel insurance covers in terms of illness during trip. Thank you.
Posted By Elaine Abrams on October 1, 2007, 3:23 PM
i battled for MONTHS with USAir and an above mentioned travel insurance vendor before my claim was finally settled. stranded in philadelphia, a call to my travel insurance company promised i would be covered for the car rental i procured to travel from PHL to north jersey. i got copies of all info from USAir, submitted them with my claim, only to be denied. my claim was finally settled (after being rejected twice!) after contacting the president of the company and threatening to report them for fraud. make sure you know your vendor before purchasing insurance. and, make sure you understand CONMPLETELY what you are, and are not, covered for. lastly, don't believe the phone rep when you call in your moment of crisis and she says "don't worry, you're covered."
Posted By Erin on October 1, 2007, 4:13 PM
I apparently had the same type experience as Charlotte Dean had except the insurance company was Access America and the airline was Northwest.
Posted By A. Roberts on October 1, 2007, 4:28 PM
I have a policy from American Express. This is not cancellation insurance but it covers you when you are over 150 miles from home secondary to any medical insurance you might carry. It does provide medical evacuation insurance and other medical benefits. I believe it costs around 200. for my entire family. Since I travel to third world countries I find this to be much cheaper than other similar policys.
Posted By john roberts on October 1, 2007, 9:06 PM
We had the complete opposite experience with Travel Guard. Due to bad weather and missing connections on a trip from San Diego to Rome (on American Airlines), we arrived in Rome 2 days late. Travel Guard told us we would get Trip Interruption for $100/per person per day, (so $400). And when we filed the claim they actually reimbursed us the full cost of 2 nights of hotels and a one way rental from Logan to JFK, about $750 total. We never fly without insurance now. Don't know if it matters, but we bought our Ins through a travel agent, but we didn't go through the agent for the claim.
Posted By Susmita on October 5, 2007, 11:58 AM
By way of disclosure I am P.r. Counsel for the US Travel Insurance Association. In response to Ms. Abrams' question, travel insurance typically will cover medical expenses not covered by your medical insurance as well as medical evacuation, should that be required. If a trip needs to be interrupted or cancelled because of illness, most travel insurance policies will typically reimburse you for the unused portion of your trip, including transportation. It will also coordinate with your doctor, family, etc. to be certain that you receive appropriate treatment and prescriptions.
The UStiA web site provides consumer information on what travel insurance includes and what questions to ask ato determine whether it is right for you: http://www.ustia.org/travelers/index.htm
Posted By Linda kundell on October 29, 2007, 9:47 AM