How to Buy Flight Cancellation Insurance

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As American Airlines canceled hundreds of flights through October, passengers were left scrambling for alternate flights or airlines to handle their travel plans. Those actually flying experienced more flight delays than normal too. Savvy passengers with travel insurance came out on top though, thanks to a normally unused feature common to many policies.

Blame it on American Airlines bankruptcy issues, labor problems, maintenance problems or layoffs, in a week’s time the troubled airline had canceled about 300 flights, mostly in and out of Dallas/Fort Worth International (DFW) airport.

“Prior to the recent issues, American had been running a good operation, with on-time performance and reliability measures at their best levels in many years,” American Airlines spokesman Bruce Hicks said in an LA Times story. “The recent disruptions are primarily due to the significant increase in maintenance write-ups by our pilots, many right at the time of departure.”

It’s a situation totally out of the control of passengers but one that can be made a bit easier to swallow with some basic travel insurance that covers flight delays or cancellations and, most importantly right now, offers traveler assistance.Travel Guard, for example, has a single trip plan and an annual plan for frequent travelers.

Their Savvy Traveler plan covers trip cancellation, interruption and delay, emergency medical treatment or evacuation, lost, stolen or damaged baggage or personal effects and baggage delay on any one given trip. The cost? About $25 for a $500 flight in October.

Frequent fliers can get Annual Travel Insurance for personal or business travel that covers trips or vacations throughout the year. This one includes everything from trip cancellation and interruption to unannounced strikes, weather delays and more – plus it comes with coverage for medical expenses that might be incurred away from home. That’s especially important when traveling internationally.

I bought one of their annual plans last year for about $200. It paid off when some medical expenses I incurred sailing on a cruise in international waters added up to over $2000, little of which was paid by my primary health insurance. The travel insurance paid the rest.

canceled flightSay a flight booked on American Airlines was cancelled. The airline would do its best to reschedule. Frequent flyers know the drill too: flight canceled, stand in long line at airline customer service counter and hope to get to destination at a reasonable time.

But what would my travel insurance have done for me? We asked Travel Guard to find out.

“In addition to the 24-hour assistance Travel Guard provides customers in rebooking their flights, accommodations and other pre-planned travel arrangements, in the event that their trip is delayed five or more hours, travel insurance can reimburse for expenses incurred until travel becomes possible,” Carol Mueller, VP of Travel Guard North America told Gadling.

That could come in handy when a late, weather-delayed flight causes a missed connection and the next flight out is tomorrow. Weather-related flight delays? Technically, not the airline’s problem. The travel insurance company, much like a travel agent, is on your side and ready to help when needed.

“Cancellation would be covered when due to mechanical/equipment failure of the carrier, or when inclement weather causes delay or cancellation of travel,” added Mueller. “We recommend customers contact us at our toll-free number as soon as they know their trip is going to be delayed, interrupted or cancelled and we can help with alternate solutions to their travel plans.”

Regardless of which travel insurance company we choose, having that protection along for the ride when traveling can pay off. Liability-limiting reasons for airlines to cancel or delay flights due to weather events and “maintenance” issues seem to be on the rise. That takes travel insurance from an optional extra not likely to be used to something that may be seriously considered.

 

When Do You Really Need Travel Insurance
[Flickr photos by Scott Ableman]

Travel insurance is about to get more expensive

Travel insurance rates are poised to spike – increases of more than 20 percent might even happen. According to travel insurance company P J Hayman, look for other changes, too, like restrictions on age and details around medical conditions. Says Peter Hayman, of the company that bears his name:

“With the summer holidays now over, travel insurers are now revising and renewing their schemes. This is likely to impact consumers as a combination of currency disadvantages on claims costs and accumulated large losses have ensured that insurers are pushing up costs for scheme holders and brokers.”

This follows three years of travel insurance rate declines, because of comparison websites, tougher negotiations and “prices and age limits that do not make underwriting sense.”
Prices are set to jump, according to Hayman, because of low interest rates, claims accumulation and pressure on travel insurance companies to meet financial objectives.

Hayman tells Postonline:

“These changes will take some time to filter through to the public. Many will coincide with the increase in insurance premium tax on travel insurance from 17.5% to 20% on the 4th January 2011; a rate that will be 14% higher than for other types of insurance such as motor and household.”

[photo by Tracy O via Flickr]

Dutch insurance firm offers world cup finals travel insurance

Unlike, say 98% of Americans, the Dutch are completely in love with football- so much in fact, that many of them would rather cancel their summer vacation than risk being stuck at a foreign camping site without a TV.

So, for those travelers, Dutch insurance firm “Europeesche” has introduced the World Cup Finals Cancellation Insurance. For a fee of 1% of the price of the vacation, plus the cost of a regular trip insurance package, Dutch footie fans can cancel their trip if their team makes the World Cup finals.

The insurance even covers the cancellation of partial trips – so if you are on vacation in Turkey, and the Dutch team reaches the finals, the coverage will pay for any days you missed and any expenses for getting you back home as soon as possible to watch the match. Yes – football is that important to them.

[Image from: AFP/Getty Images]

Travel insurance fraud means jail time

So, is there such a thing as harmless travel insurance claim that isn’t exactly accurate? Well, that’s a good question for Shaun Taylor.

The Leeds resident was accused of making a whopping £40,000 in claims that affected eight insurance companies over five years. He got caught. Taylor received a suspended six-month prison sentence for 19 travel insurance fraud offenses … in addition to some community service.

According to Cath Williams, claims company Cunningham Lindsey’s complex technical services director, “Our operation was about collating a multitude of data covering 38 separate travel claims and unearthing the common elements between them, which enabled us to assist the police in building the case for a criminal prosecution.” Williams continued, “It’s important for would-be fraudsters to understand that while they may believe insurance companies to be a soft target, there are ways and means of spotting and proving their activities which can land them in court.”

Think you can game the system? Consider how a pair of tight handcuffs can change your perpective!

Adventure travel insurance: a cautionary tale

Awhile back we posted a story on the importance of travel insurance for adventure travelers. In that article, we discussed the value of carrying travel insurance, which can safeguard someone from trip interruptions or even cancellations, and the loss of baggage that can result in very important, sometimes specialized, gear going MIA. But we also talked about how adventure travelers are often visiting remote places, which can be dangerous if they need emergency medical attention or have to be evacuated from that location. On a recent trip that I took to the Himalaya, I saw that scenario play out in a very real and potentially dangerous way, and I was reminded that it is not enough to just have purchased insurance, you also need to remember to bring the actual policy along with you as well.

A few weeks back I had the opportunity to go on a truly epic trip when I made the trek to Everest Base Camp. This is one of those journeys that is high on the “life list” for a lot of travelers, as you spend 2+ weeks hiking through the Himalaya, staying in rustic teahouses and soaking up the local mountain culture while surrounded by some of the most beautiful and dramatic scenery that you’ll find anywhere on the planet. It is a hiker’s dream come true in a lot of ways, but, as you can probably imagine, it is also a physically demanding experience that many would hardly classify as a “vacation”.

For my trek to Base Camp I signed on with a guide service in Nepal, and one of the prerequisites for joining the trek was that you had to have travel insurance to cover any potential medical needs that might arise. The policy was also suppose to cover an emergency evacuation should the need arise. I was cautioned before my arrival in Kathmandu that I would need to show proof of insurance when I joined the group, and anyone that couldn’t provide that proof would not be allowed to begin the trek. With that in mind, I purchased my insurance, which included special coverage for activities that were deemed dangerous, such as high altitude trekking, and printed off my policy to include with my various other travel documents.

True to their word, proof of insurance was requested in our initial meeting in Kathmandu. There were a dozen of us on the trip, and when we first gathered for that pre-trek meeting the night before we were to set out, our guide handed us a form to fill out. That form included a number of standard questions, including passport information, emergency contact person, and of course, the policy number and insurance company that we had purchased our insurance from. I dutifully filled out the form and handed it back in, not really thinking much about it afterward.

Fast forward a few days and we’ve all settled into the trek to one degree or another. Some members of the group are clearly more comfortable on the trail than others, and the level of suffering ranges from “barely breaking a sweat” to “dear God how much further?” By now, we know that there are a number of potential dangers on the trip, including fatigue, the dreaded “Khumbu Cough”, and other usual suspects such as contaminated water or food related issues that are the bane of any traveler’s existence the world over. But the most obvious danger was from the altitude, which was having an effect on all of us to one degree or another. For most, that meant shortness of breath or headaches. For others, it included loss of appetite or an inability to sleep. But for one of us, it was having a much more dangerous effect. One that could have proven life threatening.

One of the members of our group was a young lady who was traveling by herself, and had decided at the last minute to join the trek to Everest. She loved the thought of an adventure in the Himalaya, and had always dreamed of seeing Base Camp. Unfortunately, thanks to the effects of altitude, she would never reach that point.

The initial signs that something was wrong first appeared a couple of days into the trek. Whenever we would stop for an extended break from hiking, this young lady would invariably fall asleep. Whether we stopped for a short tea break or for an extended lunch, she would quickly nod off in her chair, and at the end of the day, when we’d reach our teahouse, she would be asleep within minutes. At first, these little naps were a point of good natured ribbing, but when they continued, a few of us began to worry.

After about five days on the trail we reached the village of Dingboche, which is located at about 14,468 feet. While there, our intrepid young lady’s altitude sickness became very serious. Her little cat naps turned into her not being able to stay awake at all, and when we spent an extra day there as part of our acclimatization process, she ended up in bed the whole day. When, our guide checked in on her late in the afternoon, he found that she was delirious, slurring her words, and cold barely identify her whereabouts. Soon there after, she became physically sick, and it was abundantly clear that she needed to be evacuated from the mountain, and quickly. Thank goodness we all had travel insurance! After all, it was required to be on the trek, right?

Turns out, it wasn’t really a hard and fast rule that it was required. It seems that while we were all filling out those forms back in Kathmandu, our now very sick young lady didn’t have her policy printed out, and wasn’t unable to complete the form. In her defense, she did try to access her policy via the Internet, but web access was spotty at best, in Kathmandu, and rolling blackouts, an all too common occurrence in that city, didn’t make that process any easier. As a result, she was allowed to go on the trek, even though she hadn’t filled out all the paperwork, and when she was truly in need of a helicopter evacuation, one couldn’t be called because she didn’t have her insurance paperwork in order.

Fortunately, the guides and porters of the Himalaya are an incredibly strong and hearty lot. Knowing that our girl’s life could very well be in danger, a group of porters put her on their backs, and physically carried her down the mountain to a hospital located in another village. Under the watchful eye of the doctors there, and after spending a night in a hypobaric chamber, she was feeling much better the next day. But the trek was over for her. She would descend to a lower altitude, and wait for the rest of us to eventually come down and join her.

The moral of the story is an obvious one of course. Make sure you have all of your travel papers in order before leaving the country, and if you purchased travel insurance, print it and bring it along as well. After all, it doesn’t do you any good to buy that policy, and then not have it readily available on the off chance that you’ll need it. That may seem like common sense, but it wasn’t obvious to that young lady on my trek, who was a very experienced traveler, and had spent time in dozens of countries all over the planet.