Travelers often have to cancel their trips – or their travel companies aren’t able to transport them to their final destinations, provide lodgings, or otherwise deliver prepaid goods and services.
That’s where having travel insurance is supposed to help them out, as many readers of our site like to point out when we publish stories of travelers who can’t get where they need to go.
But what if your travel insurance policy pays you only a partial reimbursement for expenses that are supposed to be covered as part of a valid claim? How valuable is having travel insurance in these circumstances? Catherine Detwiler wants to know the answer to this question, because she found herself in this situation when she tried to collect on her travel insurance policy with Allianz Global Assistance after a trip interruption.
Detwiler had scheduled a trip with a tour group going to Cuba, which required her to take several connecting flights from Oaxaca, Mexico, to Havana via Mexico City and Panama. But her flight from Oaxaca on Aeroméxico was delayed by four hours because of air traffic congestion at the Mexico City airport that prevented the flight from landing on time. She was forced to purchase a new full-fare ticket on Copa Airlines to continue her trip after a 14-hour wait in Mexico City because her original ticket from Mexico City had been resold.
Detwiler filed a claim for $683 on her Allianz travel insurance policy to cover the cost of the Copa Airlines ticket as well as meals and two Mexican telephone cards, which she purchased in order to make phone calls to rebook her flights from Mexico City.
Unfortunately, there’s a lot of hype surrounding travel insurance, as well as a lot of fine print. The combination leads travelers to believe that they can expect reimbursements, only to find that because of fine print in policies, travel insurance companies set limits on the amounts they’ll pay on claims. The terms and conditions of many travel insurance policies include daily maximums and other limits on coverage for trip interruption losses. And travel insurance companies may delay processing a claim, even when they promise that claims will be processed within a specified period of time.
Three months after filing the claim, Allianz paid Detwiler a total of $400 — $200 of which she received only after contacting our advocates for help. When we reached out to our contacts at Allianz about Detwiler’s case, our advocates were told:
We provided Ms. Detwiler with an additional day of travel delay coverage as a consideration for her circumstances. It’s important to note that travel delay benefits have a per person/per day maximum. Unfortunately, her situation is not covered by missed connection coverage as that benefit applies only when you miss your connecting flight due to a traffic accident or severe weather.
Detwiler’s policy carries a limit of $800 for for travel delay coverage, so her claim falls inside that limit — except that the policy also carries a $200 daily limit. Allianz will only reimburse claims of up to that amount that were incurred in a single day. So the maximum Allianz would pay on the claim was $200 — with another $200 for the additional day “as a consideration for her circumstances.” Allianz won’t cover the remaining $283.
When you purchase a travel insurance policy, always be sure to find out what is and isn’t covered before you start out on your trip — including any conditions that may reduce or eliminate the amount you may be reimbursed for a claim, such as a daily maximum payout that may be lower than a policy maximum.
If you purchase the policy through an agent, go over the policy with the agent with a fine-toothed comb.
And be aware of — and prepare for — possible delays in processing your claim. Allianz’s website promises that once it receives all the requested documentation for a claim, it will “immediately begin review” of the claim, and asks that claimants allow up to 10 business days for Allianz to complete the review. But its initial response to Detwiler’s claim didn’t take place until three months after the claim was filed.
Finally, no matter how valid your claim is, be aware that insurance companies rarely waive policy terms in favor of the insured. Despite Detwiler’s circumstances, she — and we — have concluded that “this claim is now completed and nothing more can be done.”