The Prime Travel Protection Services mystery is solved

By | August 27th, 2008

So who is Prime Travel Protection Services?

I asked that question yesterday after one reader lost two cruise vacations when his insurance claim wasn’t honored by the company. Specifically, he alleged that Prime Travel Protection Services, Travelers Protection Services, Vacation Protection Services and Trip Assured, are one and the same. This morning I got a call from Jerry Watson, the president of Prime Travel Protection, with the answer.

The four businesses appear to have at least one thing in common: him. “I was involved with all those companies,” he said.

Watson sold policies for Trip Assured and was a partner with Vacation Protection Services. After that company closed, he was a partner in Travelers Protection Services, but when he discovered what he calls  “irregularities” with payouts, he quit to start a new business, Prime Travel Protection Services.

Earlier this year, when Travelers Protection Services ran into what he describes as “financial problems,” he acquired its assets.

“What I’m doing now, I think, is right,” he adds.

And what is Watson doing? The reason he acquired Travelers Protection Services was to protect the agents who had sold his former company’s travel protection products and, ultimately, to process the claims that had been made against it, he says.

He estimates there are currently 250 outstanding claims out of 60,000 policies underwritten by Travelers Protection Services. They could cost his company anywhere from $300,000 to $600,000.

I asked Watson if the products sold by his company as well as its predecessors, were insurance. “It’s not an insurance product,” he told me. For that reason, he said, it does not need to be registered as a licensed seller of insurance in Colorado. Technically, Prime Travel Protection Services insures itself, although it has business insurance that would take care of some of its outstanding claims if it were to go belly-up.

Related story:   What are the most common "special" circumstances and how does insurance handle them?

All of which brings us to the case of Paul Donahue. Here’s what he had to say about his grievances.

There were two claims from Mr. Donahue — one in February and one in April. We reviewed the medical records with a physician, and determined that he would have been able to travel. The conditions weren’t disabling. That’s what we based our denial on.

It would have been nice to tell Donahue of the formal denial. He’s still under the impression that his claims weren’t processed at all. But Watson says both the travel agent and the customer bear some responsibility for this misunderstanding.

People often don’t read the contract. We try to do everything we can to let them look at the policies, including giving them a free 10-day look. They can get a refund anytime before that 10 days. In a lot of cases, the agencies don’t understand what we’re selling.

Maybe this is one of those times. A traveler who though he was insured, but wasn’t. A travel agent who sold travel protection without fully understanding what it could — and couldn’t — do. And a travel protection company that, by its own admission, could have been clearer about its product.

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