With flight cancellations and travel disruptions at unprecedented levels this summer, travelers are understandably concerned about the financial risks of spending money on travel.
What happens if you miss the departure date of your $20,000 Antarctica cruise because your airline rescheduled your flight at the last minute? Or, if your baggage gets lost or sent to the wrong continent while you’re en route to the Alps for a one-week outdoor adventure, who will pay for your much-needed replacement hiking gear?
Given how much can go wrong, particularly this summer, travelers are increasingly turning to travel insurance for added peace of mind. But to what extent do these policies deliver on their promises? Do they really cover the cost of flights, tours, car rentals and more when you face unexpected cancellations or disruptions? If so, how do you decide which travel insurance policy is the right one for you?
TPG reached out to a number of travel experts, insurance companies and frequent travelers to bring you this list of three key tips about travel insurance to remember as you venture out this summer. Keep these suggestions top of mind, as they’ll help you protect your wallet — and possibly save you a few headaches — as you travel.
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Do your homework before picking a plan
Travel insurance forms. (Photo by Sujata Jana/Getty Images)
Travel insurance policies and coverage areas can vary considerably. TPG’s comprehensive travel insurance guide is a good place to go as you begin researching different options.
Some policies focus specifically on trip cancellation, while others have coverage designed to address challenges related to COVID-19. Some may include trip disruptions in addition to cancellations, while others are customized policies for particular kinds of trips, such as cruises and domestic road trips.
Then there are incredibly flexible (albeit pricey) “cancel for any reason” policies, which cover just about every reason you’d need to cancel so long as you abide by your chosen plan’s purchase and cancel stipulations.
Choosing the right travel insurance plan for you is ultimately dependent on a few factors, including your budget, your trip type and your risk profile. For example, World Nomads designs policies specifically for those interested in adventure travel.
The insurance company’s “Explorer” package covers injuries sustained during activities like bull riding, cliff diving and flying a stunt airplane. For those concerned about getting injured while playing croquet, gaming online or salsa dancing while traveling, the “Standard” product should suffice.
Rental car coverage is one of the more complicated areas of travel insurance, as there are many overlapping options available. You can choose a plan that bundles rental car coverage into a policy for homes and personal vehicles, opt for a plan provided by the rental car company, go with coverage that comes with a credit card or pick a travel insurance plan that includes coverage for rental cars.
Out of the many credit card-based rental car insurance options available, options like American Express’ Premium Car Rental Protection program receive high praise from TPG readers. This Amex-specific insurance program covers damage to and theft of your rental car (with no deductible) for a price of $12 to $25, depending on coverage and state.
Upon enrolling in the program, you’ll automatically be billed this rate once for the full rental period — not per day, as most car rental companies charge for their supplemental coverage — every time you reserve a car with your Amex card.
TPG reader Matthew Vincent is particularly fond of this Amex policy. After his recent rental car fender bender, Vincent shared that Amex directly reimbursed the rental car company more than $1,100 for repairs (including a $100 rental company “administrative fee”), all of which would have otherwise been his responsibility if he didn’t have his card’s supplemental insurance.
A baggage pileup at Hamburg Airport (HAM). (Photo by Jonas Walzberg/Getty Images)
Ongoing staffing shortages at airports and on flights are causing a spike in lost baggage and itinerary changes at a time when more and more people are keen to travel.
As a result, flight cancellations and delays are becoming increasingly common both in the U.S. and abroad, meaning travelers need to do all they can to safeguard their travel purchases. That’s where travel insurance has proven incredibly helpful.
“Our customers tell us that they’re eager to travel this summer and explore the destinations that they’ve waited so long to visit,” Daniel Durazo, director of external communications at insurance provider Allianz Partners, told TPG in a statement.
“But they’re also taking precautions to protect their travel investment against unforeseen covered circumstances that may derail their trip. While COVID continues to be a top concern, travel insurance can also provide coverage for medical emergencies … as well as other unexpected covered cancellations, trip interruptions, travel delays and baggage issues.”
In fact, 90% of Allianz customers said they were planning to purchase travel insurance for their next trip, according to a survey conducted by the firm.
Many TPG readers have found travel insurance policies worth the added expense when they found themselves faced with challenges while traveling. For example, when TPG reader Julie Batholomew had luggage that was delayed for more than a day during her honeymoon, she was able to buy items for herself and her husband (totaling $600) to replace necessities in the missing suitcase thanks to her Allianz travel insurance policy she purchased through AAA. While she says the actual reimbursement process has been slow, she’s been happy with how the company has handled everything so far.
Aside from weather and logistical problems, the latest worry for travelers is the potential for airlines, cruise lines and other travel companies to go bankrupt. If a travel company’s operations cease due to financial or legal reasons, customers could be stranded or at risk of losing thousands of dollars of pre-booked travel. Not to mention, they may struggle to find new flights and hotels to book given the increase in fares and lack of last-minute availability.
When Crystal Cruises abruptly suspended all cruises in January 2022, customer Maria Russoniello found herself out $4,000 in deposits for her upcoming trip. In such cases, individual passengers will probably find themselves far, far down the list of creditors when a cruise company develops a court-ordered repayment plan. Fortunately, Russoniello had luck getting reimbursed through her credit card.
“It only took one call to Chase” to get the amount refunded on her credit card statement, she said.
However, many credit card companies, including Chase, have changed the language in their trip cancellation and interruption coverage to exclude operator insolvency as a covered item, as TPG has reported. Because of this, travelers should pay careful attention to the fine print in their credit card coverage areas and purchase travel insurance to cover the gap, should it exist.
Related: Scandinavia’s biggest airline, SAS, has just filed for bankruptcy protection
Overprepare in case you need to file a claim
Insurance reimbursement can be dependent on a number of factors, so make sure you’re prepared.
While insurance companies want to maintain good brand and customer service reputations, it’s important to remember that these are for-profit enterprises that can maximize these profits by minimizing their payouts. This means it’s not always easy to get reimbursed, sometimes intentionally so.
Insurance marketplace Squaremouth reported that travel insurance claims have increased 235% in 2022 when compared to 2019 data. With more than double the number of claims to process, even the most customer-focused travel insurance company may consequently face challenges when dealing with claims.
You can improve your chance for reimbursement from even the most stubborn of companies by staying organized and on top of everything you could need to file a claim. Document everything, read the fine print and don’t be afraid to be persistent.
“The biggest mistake travelers are making when filing a COVID-related travel insurance claim is not having acceptable proof of contracting COVID-19 or a required quarantine,” according to Squaremouth.
“In most cases, at-home tests, or quarantining from exposure, do not trigger travel insurance benefits. If a traveler believes they have contracted COVID-19 or have been exposed, Squaremouth recommends contacting their insurance provider to understand what documentation is required to confirm the diagnosis, prior to filing a claim.”
With the right documentation, processing a claim can go relatively smoothly, as TPG reader Anna Potier Harrison learned. When her husband tested positive for COVID-19 two days before leaving for Mexico on an expensive, nonrefundable trip, Harrison filed a claim with Travel Insured International (via a USAA policy).
Included with her claim were her husband’s positive test results and a physician’s statement confirming the diagnosis. Within 30 days, she received a direct deposit of all the trip costs in her bank account.
But even after documenting an illness, getting full reimbursement may be a challenge. After contracting malaria in 2021 during a trip to Africa, TPG writer Ryan Smith found himself spending days in a hospital, leaving him no choice but to reschedule flights.
His biggest challenge — beyond dealing with the illness itself — was trying to convince the adjuster for his Allianz AllTrips Premier Plan that his flights did not originate from or go to the U.S. Smith’s request for reimbursement was rejected twice due to the lack of documentation … for a nonexistent flight.
“The adjuster simply couldn’t get past it, even when I emailed him a document of our full itinerary,” Smith said. “It took about two months to get them to understand our trip and process the claim. They were also difficult to contact, since you can’t directly contact the adjuster when there are issues.”
Trying to get one insurance claim paid by iTravelInsured (an IMG product) was “like pulling teeth,” TPG reader Sherryl Buchler said. When she needed to cancel a trip because her husband had a heart attack, she ran into issues getting reimbursed.
“I do not recommend them. They made me jump through hoops and paperwork up the wazoo,” she said.
Fortunately, after three months of follow-up, Buchler’s persistence paid off. She finally received the refund she had requested months prior.
To avoid delays or rejections when you file a claim, keep your paperwork in order. The better you document your situation, the better your odds are of getting covered should any potential mishaps come up.
Related: 4 times your credit card’s travel insurance can help with summer travel woes, and 7 times it won’t
Bottom line
Now, more than ever, travel insurance is proving to be an essential travel resource to use. With continuing risks related to COVID-19, plus airport and airline struggles, having travel insurance can keep you from unnecessarily losing thousands of dollars. Additionally, purchasing the right travel insurance policy can help you minimize stress as you travel this summer.
Know, though, that each plan varies, so you’ll need to carefully read the fine print before selecting your policy. In case an incident occurs where you’ll need to invoke the policy’s benefits, diligently document every aspect of your trip’s costs and the impact of the event — if needed. Make sure you are persistent when pursuing reimbursement, too, as some insurance companies require a bit more convincing to dole out reimbursements.
Note- The information provided on this page is for general purposes only and should not be taken as professional advice. All the content provided on this page is my own creativity.
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