Jason and Sandi Naiman booked a rock ‘n’ roll themed cruise earlier this year. It was their third one.
“This is one of the best weeks of my life, going on the rock and roll cruises, music on the water, it’s great,” said Mr. Naiman said.
The couple also paid $1,000 for travel insurance, worried that something might go wrong. And sure enough, it did. Their flight to Florida, where the cruise departed, was repeatedly delayed, pushed to the next day, and eventually canceled.
The couple couldn’t make it to Florida in time for the cruise, so they had no choice but to cancel. They later filed a claim with their travel insurance company, Travel Insured International, to recover the cost of the cruise.
“You don’t get to your cruise on time because the plane doesn’t take off, that should definitely be covered by a travel insurance policy,” said Mr. Naiman said.
But that was not the case.
Travel Insured International reimbursed the Naimans approximately $2,500 for a cruise that cost them $7,200. The couple learned that their “trip cancellation” policy did not cover a cancellation caused by a canceled flight. Travel Insured didn’t even have to pay the Naimans what it did, but told the I-Team it did so because it wanted to give the claim every consideration.
“I bought this policy in good faith that if something happened that caused us to miss our vacation, which was out of our control, we would be reimbursed for the cost of the vacation. It was apparently an unreasonable expectation,” said Mr. Naiman said.
Kevin Brasler, the executive editor at the consumer advocacy website checkbook.org, believes travel insurance is often a waste of money.
“I hear a lot of advice these days because there are so many problems at the moment, especially with airlines, that people need to buy insurance. And I think that’s often bad advice,” he said.
Brasler says most policies are too difficult to understand and have too many limitations and exclusions.
“A big problem with these insurance plans, and something most consumers don’t realize, is that they’re built to cover unexpected problems, not expected problems,” he said.
For example, the Naimans’ policy did not fully cover their trip due to a canceled flight, which is to be expected these days. But their trip would have been fully covered if they were hijacked, their passports stolen, or if there was a terrorist incident in the city where they live.
Before buying travel insurance, Brasler suggests that consumers research how much they stand to lose if their trip is canceled. He points out that airlines will give you a flight credit, hotels often have friendly cancellation policies, and many tour operators will allow you to reschedule.
“You have to evaluate: ‘What is the financial risk here? If I can’t take this trip, what am I missing out on?’” Brasler said.
Travel Insured International told the I-Team in part: “Consumers are always given the option to shop around to select the plan they prefer and are also given time after purchase to review the plan and return it for a full refund if they are not satisfied with the terms…”
The Naimans said they will read their policy carefully next time, and they hope others learn from their costly mistake.
“I can survive the loss of $5,000. I just don’t want to see it happen to someone else again,” said Mr. Naiman said.