Travel insurance scams

Here’s a travel tip you can take with you this summer: don’t buy travel insurance from the first person to offer it to you. You might be signing up for something totally useless.

That’s the conclusion of a new British study of travel insurance policies purchased through travel agencies. The travel counselors, it found, often failed to ask the right questions and persuaded their clients to take out insurance that didn’t cover their trips.

Travel insurance is a hot topic this summer. The US Travel Insurance Association, a new trade association for travel insurers, claims that demand for travel insurance has tripled. (But there is no historical data to prove it.)

During the last week, I’ve received several calls from reporters asking about travel insurance. (Here’s one of the resulting articles.) It is evident to me that someone is busy promoting travel insurance but that there is precious little information that shows how useful — or useless — travel insurance can be.

Of course, in certain situations, the right travel insurance policy can save your vacation. No doubt about that.

But in other instances, you might as well burn your hard-earned money. For example, travel insurance sold as add-ons to airline tickets that cover you in the event of death or dismemberment are practically useless. The odds of your plane crashing are remote (we haven’t had a major airline disaster in the United States in years). And when’s the last time you met someone who lost a limb on a plane?

My take? Don’t even consider travel insurance unless it’s a big-ticket vacation (more than $10,000) and be especially careful when you’re dealing with an agent or buying directly from a travel company. Do some comparison shopping online and pick the best policy only after reading the terms and conditions. Not the brochures.

Update: Seems this post has stirred things up on the travel agent forums. Several readers have inferred that I’m suggesting no one should buy insurance from an agent. That’s just wrong. What I am saying is that you should shop around and verify what your policy covers by reading the actual contract. Brochures are imprecise representations of a policy and an agent’s word — as well-informed as it might be — isn’t going to matter much when you make a claim.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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