Your expensive vacation is already paid for and now you have to cancel — good thing you bought that travel insurance, right? Well, maybe.
One Bay Area couple did buy travel insurance and still couldn't get a refund when they had to cancel their trip. A week before their Alaskan cruise, Peggy and Clifford Williams had to cancel their trip because Peggy had an attack of vertigo, leaving her dizzy, unbalanced and nauseous for several days.
"I knew if we went on the trip, they'd have to send us home or some other thing," she said.
So they canceled the trip, but figured at least they'd get their money back. They had purchased a vacation protection plan that was supposed to cover cancellations due to illness — except the travel insurance provider refused to pay.
The travel insurance company said the claim was rejected because Peggy didn't go to a doctor right away. In a letter the company said they "were unable to verify treatment for an illness."
She went to a doctor later, but in the policy it says, "The sickness must be verified by a physician before you terminate the cruise, not after." The travel insurance provider still refused to pay and the couple was out nearly $5,000.
So, like any good consumer who feels justice has not been served, they contacted the local TV station’s “On Your Side” division for some help.
At the TV station’s request, the travel insurance provider reviewed Peggy’s case again. The company said insurance requires a doctor to verify illness at the time of cancelation to prove a claim is valid. However, she was able to supply documents showing she was ill and missed work the day she canceled, so the travel insurance company did reverse their decision and paid the claim after all. Days later the couple received two checks for $2,399 each.
I’m really glad this worked out for the couple, but at the same time, I don’t blame the insurance company for rejecting the claim. Being in the insurance business, we know that people really should read their insurance policies so they understand the rules and exclusions. We also know that the majority of the time they do not. As an agent, you can avoid angry clients and bad publicity later on by disclosing rules and exclusions like this one yourself — rather than letting the client finding out when their claim is denied.