Travel insurance is a good idea if you are planning on spending thousands of dollars for a dream vacation. There are so many scenarios that could cause an interruption including weather, illness, late flights and more. Too often, those who travel overlook this important option for vacation. In fact, overall only 22 percent of travelers take out travel insurance.
What travel insurance offers
Travel insurance is designed to prevent you from losing money if your vacation plans are interrupted. For example, they can help cover payments you make in advance for a hotel, a cruise or tour that must be cancelled. Other coverage includes:
• Unexpected medical issues – if you are on vacation and you are injured, take ill and need medical care, your basic medical insurance may not cover your trip to the hospital or the care you receive. Travel insurance often offers reimbursement for both transportation and care.
• Accommodation coverage – some things are beyond our control. For example, few of us plan our vacation with the idea a hurricane will hit and destroy the hotel we are planning to stay in or interrupt our flights.
• Other coverage – when traveling none of us ever plan on needing medical or legal assistance. Most travel coverage policies include an option, whereas the company will help you identify the help you need while you are traveling.
When you need to file a claim
The last thing most of us want to think about is what happens if you need to file a claim on a travel policy. However, when you are covered for a specific event, you have the right to file a claim.
There is something you need to know, however, that is that insurance companies will do anything in their power to avoid paying a claim.
So, what happens when a travel insurance company either denies your claim or pays you less than you actually paid for the trip? You have to fight and in some instances, you will actually be able to not only recover the cost of your trip, but the insurer may be required to pay you interest from the date of your original complaint.
What you need to know about language
Interestingly enough most travel insurance policies include specific language that is intended to help them pay less money out in claims. For example, the typical language says “you will be reimbursed for unused portions”. However, after an interesting court hearing, unused has more than one meaning and the policy holder may be entitled to any portion that is actually used in spite of this language.
The specific legal case that points to this was Waters v. Travel Guard International which was heard in the Missouri Court of Appeals in May of 2004. The case was litigated for an amount of less than $500 which Ms. Waters had paid and in fact had used.
Specifically, she was told by the travel agent to take the first leg of her trip (via plane) to New Jersey and was told that if she did not she would lose her deposit. The problem was that Ms. Waters had already been made aware that she could not make the full trip because of weather delays which would cause her to miss connecting flights.
Travel Guard International refused to pay her the full amount of her claim because the first flight was taken and therefore they considered that portion of her trip to be “used” and therefore not eligible for reimbursement.
The appellate court judge stated: “Accordingly, because the words “used” and “unused” are both reasonably open to different constructions, Travel Guard’s policy is ambiguous and the language must be construed in favor of the insured, Mrs. Watters. Therefore, Mrs. Watters’s roundtrip airfare from St. Louis to Newark is covered by the policy. Travel Guard’s point is denied. Summary judgment granted in favor of Mrs. Watters on her breach-of-contract claim is affirmed.”
In effect, Ms. Waters’ argument was that while she did travel to New Jersey, which was part of her original trip itinerary, she would not have traveled to New Jersey unless she was taking the trip and therefore it could not be considered “used” for the purposes of her claim.
Keep in mind, oftentimes the only way to make sure that an insurance company pays you what you are due is to work with an attorney who can fight what is known as “bad faith” litigation.
An attorney can help you make sure that your insurer holds up their end of your contract and you get fully reimbursed for your vacation expenditures when you have been unable to make the trip for any covered reason.