The travel insurance question

By | January 13th, 2008

Even with Hurricane Dean taking aim at Cancun, Mexico, last August, Miguel Guillen wasn’t worried. After all, he had insured his vacation.

A quick call to his insurance company, Access America, left him with the impression that he’d get a full refund in less than two weeks. So as the Category 5 storm threatened to blow away his hard-earned getaway, “I was told to cancel my flight and file a claim,” he said.

Then the hurricane changed course, leaving Cancun unharmed. Guillen’s flight took off as scheduled, and his claim was denied. “It was unfair and it was inappropriate,” said Guillen, a computer engineer from Seattle.

Guillen’s story isn’t that unusual. More travelers are buying insurance, and more are encountering the difficulties that sometimes ensue.

Before Sept. 11, about one in 10 Americans insured their vacations. Now, about one-third of all trips are insured, according to industry estimates. That’s translated into big profits for insurers. The U.S. Travel Insurance Association, a trade group, estimates that the industry rakes in about $1 billion in annual revenues. In the past year alone, the association’s membership rose nearly 40 percent, to 56 member companies.

It may be a good time to be in the travel insurance business, but is it a good time to buy travel insurance?

Depends. Before taking out a policy, it’s important to determine whether you need protection at all. Experts say that with so many travel insurance products available, thorough research is critical — and that means reading the policy in its entirety, not just the brochure.

If it ever comes to a claim, a little insider knowledge of the process won’t hurt, either.

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For example, Guillen’s denial was completely preventable, if he had only reviewed the policy before canceling his vacation, according to Access America ( His policy would have covered him if his airline had canceled the flight because of a hurricane, according to company spokeswoman Caroline Platt. “His claim was denied because there was no disruption in service by the airline,” she said. “His plane took off as planned.”

But Access America, one of the largest travel insurance companies in the world, is concerned that Guillen and others like him may be left with the feeling that they are covered when they aren’t.

The company has started simplifying the language of its policies through a campaign called “Plain English.” Platt described it as “taking the pen back from the underwriter’s hand,” and using charts, tables and policies written in easy-to-understand language to clearly communicate what a policy does and doesn’t cover.

Would that have helped Guillen and travelers in a similar situation?

Maybe. Maybe not. It was a phone agent who assured him that he could cancel the vacation, not his reading of the policy.

What do you need?

He might have had the wrong policy. At least that’s the assessment of travel insurance expert Zain Jeewanjee, chief executive of (, an aggregator of travel insurance products based in San Jose, Calif. A “cancel anytime” policy might have saved the day for Guillen. That type of policy would cost two to three percentage points more than the average policy, which usually runs about 6 to 8 percent of the cost of the trip.

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  • Thank you for sharing! I think you have summed all up in one great sentence ‘Persistence pays off’