Kay Schroll says she lost $6,820 — the price of two cruises — when she bought travel insurance through Legendary Journeys, but then had to cancel her vacations for health reasons. Her case is just one of many that have landed on my desk since the bankruptcy of Prime Travel Protection, the Colorado company that offered these unlicensed policies.
Florida authorities are now investigating travel agents who sold or gave Prime Travel Protection to their clients.
Schroll had booked a 14-day Spain and Western Mediterranean cruise and a 17-day Panama Canal itinerary.
For the first cruise, our agent sold us what she claimed to be travel insurance through a company called Traveler Protection Services, later called Prime Travel Protection. For the second cruise, our agent sold us travel insurance through Prime Travel Protection.
We had to cancel both cruises for health reasons. My husband was diagnosed with bladder cancer and was undergoing weekly treatments during the time of the first scheduled trip. Shortly before time for our second trip, I experienced severe abdominal pains and was going through various tests and was on antibiotics, with additional tests scheduled. It was necessary to cancel trip number two for medical reasons, also. Travel insurance should have covered both of these cancellations.
It turns out Prime Travel Protection wasn’t travel insurance. In fact, a few months after we paid Legendary Journeys $602 for our “policies,” Prime Travel Protection went bankrupt, and we lost our entire vacation.
We have tried to contact Prime Travel Protection. Whenever we called, we were initially told they can’t answer because of “heavy volume,” and now we’re told they are in the process of liquidating. We’re upset at our agency for selling us what appears to be bad insurance.
According to Florida regulators, Prime Travel Protection wasn’t authorized to sell insurance, and neither were travel agents.
I asked Legendary Journeys to look into her claim. I heard back from Stew Carrier, a customer service specialist and group tour coordinator, almost immediately.
I’m impressed with the company’s response. Instead of sending me a cease-and-desist letter, which seems to be the preferred method of dealing with unhappy customers and the bloggers who write about them, Carrier took the time to carefully answer Schroll’s question:
As you may be aware, Prime Travel Protection/Universal Assurance group worked with about 150 Travel Agencies across the state of Florida. At the time of their bankruptcy we estimate there were several thousand policies and claims that have been affected.
Since the notification, Legendary Journeys has sent communication to all of our guests whom have yet to travel and had a policy affected by this claim. We offered all of our guests an alternative policy, because their Prime Travel Protection policy is no longer valid, and we also offered all guests a future travel credit in the same amount as their new policy purchase. Legendary Journeys is the only travel company in the state of Florida, to the best of our knowledge, doing anything on this scale currently.
In reviewing the two bookings below I discovered that one of the canceled bookings, Panama Canal, was in fact in 100 percent penalty with the cruise line at the time of booking. The other cancellation received the due reimbursement from Legendary Journeys based on the penalties assessed by the cruiseline.
Unfortunately, Jerry Watson [Prime Travel Protection’s president] decided to file bankruptcy and/or liquidate all assets on Monday, January 26, 2009. This is when Legendary Journeys received notification from Mr. Watson via e-mail that he was receiving legal council and would be liquidating all of his assets. He goes on to state:
“Based on the information that I have received from legal counsel, claims adjudication will be handled either through the courts or the Trust. Funds for claims settlements will be derived from asset liquidation.”
Mr. Watson will be administering Chapter 7 Bankruptcy or self liquidation via a Trust Receivership.
While Legendary Journeys is very sympathetic towards the frustrations being suffered by all of our clients, and the many other non-Legendary Journeys clients, because of this bankruptcy we are not responsible for the legal ramifications. Legendary Journeys is not a travel insurer, Legendary Journeys acts as an intermediary, or refer, to our guests for travel Insurance only.
Legendary Journeys will, however, analyze the cancellations of the bookings outlined by our client and see if it is possible to move some of the funds paid to another travel booking.
In the meantime, I recommend contacting the Attorney General’s Offices in the states of Colorado or Tennessee to see if they can assist in the administration of the bankruptcy.
Soon after that, apparently in response to some of the questions that were being raised on this blog, Carrier sent another note:
In following up with this situation I want to add a few points about what Legendary Journeys is and has done:
• VPS Travel Protection Services was (as far as we were told by them) licensed to sell travel in Florida and all 50 states through their underwriter United National Underwriters and Maxbermuda.
• Legendary Journeys is not in the insurance business and we only act as the intermediary for the insurance provider.
• We have no way of validating the insurance provider’s claims and certainly if they commit any fraud to Legendary Journeys or the traveling public.
• VPS Travel Protection Services provided travel protection to our clients for nearly 3 years and claims where paid, emergency medical was provided.
• In approximately September 2008 the State of Florida asked about VPS Travel Protection Services and for us to provide information to them about their licensing in Florida. Legendary Journeys provided all the information requested and documents available to us.
• In approximately September 2008 we discontinued our association with VPS Travel Protection Services and established a business relationship with TRAVELEX Insurance who has registration rights to sell insurance in all 50 states.
• The vast majority of all Legendary Journeys guests with travel in 2009 have insurance in force with Travelex Insurance and Travelex participates in whatever regulatory requirements the State of Florida and all other states require.
• Hundreds of travel agencies in Florida and thousands of travel agencies in the United States provided VPS Travel Protection Services travel insurance coverage. Legendary Journeys acted quickly when issues were raised on their ability to sell (or their underwriters) in the state of Florida.
• In late January 2009 Legendary Journeys received a fax (and a message was placed on their phones) saying VPS Travel Protection Services travel insurance was filing Chapter 7 Bankruptcy liquidation. We had no notice of this action until it was done.
• Legendary Journeys immediately purchased insurance policies to immediate clients traveling within short notice a re-insurance policy through Travelex to ensure our clients protection. This out of pocket expenditure was approximately $50,000.
• Legendary Journeys sent a letter, email and phone call to all other pending clients that had a VPS Travel Protection Services insurance policy to advise them of bankruptcy and they would have to process claims through the bankruptcy proceeding. Additionally, we offered those clients a Future Travel Certificate in the exact amount of insurance cost to re-insure through Travelex (in effect offsetting the expense of new insurance.) The vast majority of our guests exercised this option and can file through the bankruptcy proceeding AND take Legendary Journeys offer for future credit.
• Legendary Journeys is researching all clients that have already traveled and filed a claim with VPS Travel Protection Services and evaluating each discovery on a case by case basis. These clients also have a case through bankruptcy proceedings.
What does all of this mean?
For people like Schroll, it may be difficult — if not impossible — to get a claim paid.
Travel agents who sold Prime Travel Protection and similar policies have a hard decision to make. If they don’t find a way of making clients like Schroll happy, Florida authorities are almost certain to hear about it, and that could have repercussions for any agency that offered Prime Travel Protection insurance.
Something tells me this won’t be the last post about Prime Travel Protection.