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Trip Insurance FYI

Orlando, FL
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34 posts
21 reviews
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Trip Insurance FYI

My wife & I just recently booked a 10-day safari in March of next year and we thought it would be a good idea to also buy some trip insurance because there is so much money involved. We had two primary reasons for wanting insurance: Our parents are elderly and we’re concerned that one of them might kick the bucket right when we’re ready to depart, in which case we’d probably have to skip the trip, or face excommunication by the rest of the family. As well, we were also hoping that the insurance would offer some protection in case the TO stiffs us or goes out of business. In our case, we booked with a TO who is based out of TZ, but has an office in the U.S. It's not that we don't trust the TO, but it happens all the time where businesses get into trouble and well, one never knows…

During this past week I looked at a lot of insurance plans via InsureMyTrip and SquareMouth and most of the plans will cover trip cancellation due to financial default of a tour provider. However, they all had a clause that excluded this coverage if the trip was purchased directly from the tour provider. In other words, they would only cover financial default of the TO if the trip was purchased through a Travel Agency. Strange. I even called two insurers and also SquareMouth and they all confirmed my interpretation was correct. Since we purchased directly from the TO, our trip would not be covered if the TO goes belly-up.

On a whim, I decided to call AAA. It took several e-mail exchanges and multiple phone calls to get a straight and reliable answer, but sure enough, their policy does not have that sneaky little exclusion that all the other policies had.

I realize a lot TA followers are from Canada, Europe and elsewhere, and my FYI about AAA may be useless to many, but for my fellow Americans, this is your heads up to read the fine print!

South Riding VA
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619 posts
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1. Re: Trip Insurance FYI

Thanks for the info. We're you already a member of AAA?

chris

Ottawa, Canada
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10,061 posts
137 reviews
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2. Re: Trip Insurance FYI

Thanks for the tip. Canada has CAA as compariason. I'll have to check there.

Tha is quite a blow to the poor TZ TOs, as it means a number of American clients will pay extra dollars to a TA for surity, however, won't be getting the same kinds of trips.

Hmmm.

Orlando, FL
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34 posts
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3. Re: Trip Insurance FYI

@cbradley - yes, we were already AAA members.

The insurance is not provided by AAA...merely resold by them. The insurer is IMG (IMGlobal.com) and it may be possible to purchase directly from them, I'm not sure.

Nashville, Tennessee
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2,264 posts
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4. Re: Trip Insurance FYI

My policy has an extra provision (very cheap) for financial default of the TO, even if purchased directly. I had to include the name of the TO and they covered it.

Orlando, FL
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34 posts
21 reviews
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5. Re: Trip Insurance FYI

This is what I'm talking about:

6. Bankruptcy or Default of an airline or cruise line or tour operator or travel supplier (other than the tour operator or travel agency from whom You purchased Your travel arrangements) which stops service more than 14 days following Your Effective Date. Benefits will be paid due to Bankruptcy or Default of an airline only if...

The above text came from the certificate for Travel Insured.

Ottawa, Canada
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6. Re: Trip Insurance FYI

Is it how I am reading it? <other than the tour operator or travel agency from whom You purchased Your travel arrangements)> so doesn't this mean that if you DO book direct with a Tz TO then you are fine?

Nashville, Tennessee
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7. Re: Trip Insurance FYI

QM-

The statement is when they WILL pay (if purchased through other operator). As I said, mine includes the provision and is quite cheap. A few dollars extra.

Orlando, FL
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34 posts
21 reviews
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8. Re: Trip Insurance FYI

I called two of the insurance companies to ask for clarification and both said they will not cover TO financial default if I bought directly from them.

Yes, like Stehpen H says, the text in post #6 is what they will cover. So it says they will cover default, unless you purchased directly, in which case they will not cover.

And yes, per Stephen H, and my own experience with AAA, it is possible to find a policy that will cover financial default, regardless of where the trip was purchased. Since the exclusion (see post #6) is very common, anyone shopping for travel insurance should be on the lookout for it.

Edited: 26 July 2013, 13:22
Austin, Texas
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9. Re: Trip Insurance FYI

So, would you recommend a specific company to buy Travel Insurance from that would cover TO insolvency etc?

Orlando, FL
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34 posts
21 reviews
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10. Re: Trip Insurance FYI

When I was on the phone with SquareMouth the girl read thru about a dozen policies and they were all the same. So no, I don't really have any specific companies to recommend. I'm sure there are more providers other than the one AAA re-sells, but that is the only one I know of. (see post #3).

I will also tell you that if your TO accepts VISA or MasterCard you may want to give serious consideration to using your card, even if it costs you more money. If the TO leaves you standing at the alter then you will have chargeback rights via VISA/MasterCard for "failure to provide services". Of course, if the TO is no longer in business then you have no recourse, but if they are still in business you will likely receive a refund for at least the TO's portion of your trip. This won't refund your airline tickets, but at times like that, some is better than none.