Thinking about travel insurance? First know what you’re getting. More than one type of insurance exists. You can cover trip cancellation and/or health problems while en route and/or baggage loss and/or some combination of thing.
But very few policies cover “cancellation for any reason.” In a strange leap of logic, some insurers don’t fully explain their coverage until they have your money. It’s not uncommon to cover, say, baggage loss, only to find the policy has a section that starts with “except under the following conditions…” – and that section runs for three paragraphs.
Second and just as important: “Taking out insurance” is not the same as “collecting insurance money.” The nice people who sold you the policy are not the same not-so-nice people that reimburse you later. Also note that “reimburse you later” could be a lot later so they have time to think about it. In the meantime, you must foot the full bill and wait (hope?) for a reimbursement check.
I have a theory: Travel insurers look closely at a claim to see if it can be denied using the fine print, and they many times find a reason. They know that most people won’t fight for the money, preferring, instead, to say to each other “we’re screwed.” To the insurers, it’s a numbers game. Maybe 10 percent of the turned-down people complain, and maybe only 5 percent of those people successfully tackle the system and get reimbursed. Overall, the insurer wins by paying only 5 percent of all denied claims. (I’m sure the insurers have an exact percentage for this.)
When working as a travel agent, I had a client who had overcome breast cancer 15 years earlier but, within the trip cancellation period, discovered liver cancer. The insurer denied her claim saying that cancer was a pre-existing condition, but she successfully fought for reimbursement based on the argument that it was a “new” cancer. (Insurers love the “pre-existing condition” clause.) If you had a heart attack 20 years ago and a second one the day before travel, was it a pre-existing condition?
Insurers have no policy checkbox for “compassion.”
One thing works in travelers’ favor: As number crunchers, insurers analyze the possible cost of paying a claim versus the cost of defending themselves in court. For most claims, it’s cheaper to pay. If you have a niece or nephew with a law degree, ask them to write a letter on official stationary and include a veiled threat of legal action. If the insurer believes you’re serious, it will pay the claim just to make you go away.