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.
For example, Guillen's denial was completely preventable, if he had only reviewed the policy before canceling his vacation, according to Access America (www.accessamerica.com). 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 g1g.com (www.g1g.com), 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.
For example, TravelSafe Insurance (www.travelsafe.com ), based in Wyomissing, Pa., has what it calls a "Cancel For Any Reason" policy that offers up to 100 percent of a traveler's nonrefundable trip costs in cash, depending upon the amount of penalty assessed by the trip or tour provider.
So who needs insurance? The general rule is that a major vacation purchase -- anything over $10,000 -- should be insured. But the insurance industry prefers to use another measure: If you can't afford to lose it, you should insure it.
This isn't to say you should buy the first policy you find. "The most basic advice I would give to someone looking to purchase travel insurance would be to ask questions," said Rob Jordan, a regional sales manager for Travel Insured International (travelinsured.com) of East Hartford, Conn. And don't wait. He says getting insured the day you book your trip ensures that you have the widest range of coverage.
Sounds simple, but in practice, it can be tricky. There are so many types of coverage, from trip interruption policies to products that include multiple components, such as medical evacuation, baggage coverage and collision damage insurance. How do you determine what you need? How do you know what you can afford to lose?
The only way is to actually read and research the policies, including the fine print.
Do your own research
Jim Crutcher, a retail sales trainer in Charlotte, N.C., carefully assessed the options before buying a policy for a cruise. He was disappointed with what he found. Like Guillen, he had a probable weather problem -- specifically, he wanted to make sure a weather delay didn't mean he would miss his cruise from Miami. A close look at one of the policies under consideration revealed that the weather would have to "cause complete cessation of services of your [airline] for at least 24 consecutive hours."
"With the policy's wording," he griped, "I'm not sure we're even covered."
The services of a competent travel agent can help, but don't rely on one exclusively. Agents can't take the time to read every policy, and even though they take a commission of between 5 and 30 percent for the insurance they sell, they shouldn't be expected to do your homework.
"Here in the United States, when we buy insurance, we throw the policy in the drawer and wait for something to go wrong," said Dan McGinnity, a spokesman for AIG Travel Guard (www.travelguard.com) in Stevens Point, Wis. "And then when something goes wrong, we pull it out and ask, 'Am I covered?'"
Instead, it's vital to know you're covered before buying the policy, according to experts. If you don't, you could end up like Faith Frank, a loan administrator from Horsham, Pa. She thought she was covered by the insurance recommended by her travel agent when she missed her connecting flight after disembarking from a recent Princess cruise in Vancouver, British Columbia.
She had followed the cruise line's instructions, leaving at 9:45 a.m. for a 1 p.m. flight. But there was a series of unforeseen delays. She missed her flight home and had to pay $1,900 for two new plane tickets. Frank said she filled out the paperwork, but the company rejected the claim and directed her to Princess for compensation. The cruise line also turned her down.
"Princess said they could not control what conditions would be like once we left the ship," she said. "They apologized and said they considered the matter closed."
Persistence pays off
Frank might have had her claim honored if she'd known a little about the inner workings of travel insurance, said Jeewanjee of g1g.com. For starters, most travel insurance companies have a formal appeals process for grievances. When a claim is rejected, that isn't necessarily the final answer.
Sometimes the company doesn't have enough information to make the right call. Sometimes it needs a little nudge. Once, Jeewanjee phoned an insurance company that had rejected a customer based on a preexisting medical condition, which is one of the most common reasons an insurance company denies a claim.
"I got on the phone with them and said, 'Look, here are the real facts,'" he said. "And it worked. They honored the claim, which just goes to show you ... the importance of the human touch."
Nor should you underestimate the importance of being persistent when arguing your case to a travel insurance company. The industry's claim denial rate is about 5 percent, meaning that the odds of being successful your first time around are pretty decent. If you get a "no," don't be afraid to ask again.
Better yet, buy the right policy to begin with, and you'll get a prompt refund for your missed vacation the first time around.
Christopher Elliott writes the Travel Troubleshooter column that appears weekly in Travel and is ombudsman at National Geographic Traveler.