Travel Insurance: Are You Covered?

Five Common Myths & Misconceptions

A number of misconceptions and myths abound about the need for travel insurance that could end up potentially costing consumers thousands of dollars, advises the US Travel Insurance Association. With the summer vacation season nearly here, UStiA is advising that consumers may incorrectly believe they are already covered for a variety of situations when in reality they are not.

A major misconception is that a consumer’s medical, homeowners insurance or credit card programs will cover all types of travel problems. “Before deciding to purchase travel insurance, we urge consumers to check the details of their current policies and credit cards. Consumers may be surprised to learn what is and what isn’t covered,” says Brad Finkle, president, UStiA.

Myth #1: I’m covered in case I have to cancel or Interrupt my trip

The vast majority (over 70%) of travel insurance claims are for trip cancellation, interruption and travel delay, reports UStiA. This can be due to accident, illness or death of either the covered traveler or a family member; or due to weather such as hurricanes and snow storms. “Consumers will find there is very little protection, other than travel insurance, that will reimburse them in case they have to cancel or interrupt a trip if they or a close family member become ill. What protection may be available through a limited number of credit cards is highly restrictive. Some travel insurance policies also cover travelers in case a trip has to be interrupted or cancelled because of work-related reasons, or because their home is made uninhabitable.

Myth #2: In case of force majeure circumstances, I will likely receive refunds on cancelled trips anyway

Airlines, cruise lines, hotels and tour operators are under no legal obligation to refund consumers, and most contain statements in their literature exempting or limiting refunds. A growing trend among hotels has been to charge nonrefundable deposits ranging from one night to the entire stay, no matter the reason for cancellation. Most travel insurance policies will reimburse travelers for the unused portion of a trip due to cancellation or interruption because of weather-related and other catastrophes such as snow storms, earthquakes, and more.

Myth #3: Airlines will reimburse for delays

While “airlines are required to reimburse you for lost bags,” airlines are not required to reimburse for baggage delay, overnight delays, or to put you up in case of weather-related overnight delays, all situations covered by travel insurance.

Myth #4: Don’t buy travel insurance through a travel agent

Travel agents represent one channel through which consumers can purchase travel insurance. Other avenues are through travel suppliers, from individual companies selling travel insurance, and over the Internet. A good travel agent has experience with insurance companies and can advise on product reliability. Travel agents sell both supplier provided plans and plans from travel insurance providers, and offer the same coverages and pricing as those the consumer can get independently.

Myth #5: Only unsophisticated travelers buy travel insurance

UStiA research reveals that those who buy travel insurance tend to be better educated, take longer and more expensive trips, and are more likely to travel abroad, usually the hallmarks of sophisticated travelers. “Sophisticated travelers have often experienced the value of travel insurance. They have been in situations where they may have paid $5,000 or more in nonrefundable deposits for a trip, and had to cancel at the last minute because they were sick; became ill or had an accident during their vacation; had to interrupt their trip because a family member was seriously ill, requiring that they pay for an additional return airline ticket; or had to spend a night at an airport hotel because their flight was delayed due to weather, and the airline wouldn’t pay for the hotel stay. These are all situations covered by travel insurance, and many sophisticated travelers won’t travel without it”

Finkle also points out that peace of mind and the ability to recoup non-refundable expenditures are among the top five reasons for purchasing travel insurance. For more information on travel insurance, along with questions to ask and what to look for, visit www.ustia.org.

About UStiA

UStiA promotes fairness, integrity and a commitment to excellence in the travel insurance industry. With a mission to educate the public on travel insurance while maintaining high industry standards, the UStiA is a non-profit association of insurance carriers and allied businesses involved in the development, administration and marketing of travel insurance and assistance. In 2004, UStiA member companies provided travel insurance policies to more than 17 million people.

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