Check Your Cancellation
Trip insurance is more popular than ever. But it doesn't always deliver
On a seemingly perfect honeymoon, Robyn and Matthew Quist set sail on a western Caribbean cruise on the Grand Princess. The newlyweds snorkeled in Grand Cayman's tropical lagoons, four-wheeled in the hills of Belize, and caught wahoo in Cozumel, Mexico.
But it all came to an unceremonious end after a week at sea. The St. Michael, Minn., couple boarded a bus provided by the cruise line to get them to the Houston airport. But they arrived too late for their charter flight home and had to shell out an extra $959.50 for new tickets.
"Good thing we have insurance," thought Robyn Quist, an assembly plant worker who purchased a $99 trip cancellation policy through her travel agent. "We'll get reimbursed." More than a month later, she hasn't seen so much as a peso.
Popular. Trip cancellation insurance is a hot add-onto summer vacations. Before 9/11, fewer than 10 percent of travelers bought insurance, according to Insuremytrip.com, an East Greenwich, R.I., insurance site. But since the terrorist attacks (and the tsunami disaster), about 1 in 5 travelers does. At the same time, more firms are peddling policies, including travel websites and agencies.
Unfortunately, "the policies don't always do what people think they will," says Dan Drennen, sales and marketing director for Travelinsurancecenter.com, where users can compare policies online. He says travelers often assume they can cancel for any reason, including "not feeling like going," and they'll be covered. In fact, policies apply only to a specific set of events, like a documented illness or death (yours or a family member's).
Consider the Quists. Hobbit Travel in Minneapolis sold them a trip-cancellation policy, and Robyn thought it would take care of any problem. But George Wozniak, the agency's owner, said he believed the policy did not cover a late bus (his company is investigating the missed connection, even though the insurance company denied the claim). Tim Gallagher, a spokesman for Carnival Corp., which owns Princess, says cancellation policies typically won't cover a missed charter flight. "You have to read the fine print," he adds.
By checking out the policy beforehand (box), you can avoid the unpleasantness of a rejected claim. (For example, many cancellation policies don't apply in countries under a State Department travel warning.) But don't rely on your travel agent for the answers. If you have concerns about what's covered--and what isn't--ask the insurance company directly.
Fortunately, most travelers won't ever make a claim. But in case you do, experts say you should be prepared. You'll need a doctor's note if you never go--and receipts for money spent if you hope to get reimbursed after an early return.
This story appears in the May 9, 2005 print edition of U.S. News & World Report.