Here’s why it’s important to read the terms of your trip insurance policy

When John Joseph and his wife planned a trip to Universal Studios, they thought it might be a good idea to purchase travel insurance. After all, they were paying a great deal of money for their trip, and they wanted to make sure they could get it back if they weren’t able to go. They bought a “cancel-for-any-reason” policy through AAA Travel for their Universal Vacation Package.

It was a good idea.

Several months later, Joseph was in a car accident and required surgery. After his doctor ordered him not to travel, his wife canceled the trip and made a claim on the policy, assuming that they would be reimbursed for their entire costs. But they weren’t.

The Josephs’ story illustrates the importance of carefully going over the terms of any insurance policy to make sure that you know exactly what the policy covers.

Unfortunately, purchasers of “cancel-for-any-reason” travel insurance, like the Josephs, often assume that their carriers will reimburse 100 percent of their costs when they cancel their trips. But although this type of travel insurance allows policyholders to cancel for any reason, just as its name suggests, it often doesn’t provide full reimbursement of all costs incurred by the policyholders for the trip. Had the Josephs read their policy terms, they would have learned that their airfares, a significant portion of their travel costs, weren’t covered — and they might not have lost $700.

Here’s Joseph:

I had the car accident Memorial Day weekend, 2016, right after we had just paid off the trip in full to Universal Studios through AAA Travel. I told them in advance that I might have to get refunded if the doctors would not release me. I ended up having to go to an orthopedic surgeon and have an MRI done which … led me to having necessary neck surgery. I am not released yet to fly. We had to cancel the trip when I found out I had to have surgery.

[We] started [the] cancellation process in October/November 2016 and my surgery was at the end of November 2016. At this point [April 2017] I am still not cleared for travel just yet. When they started to fight me on the refund I had to fight very hard to get back what I have [paid]. It’s the principle of the matter and them basically stealing this remaining money from me. … We did receive a refund for the Universal parks, hotel, meal plans, etc., all but the airfare. The agent at AAA told us that the travel insurance covers it all. But in reality, the travel insurance that was … sold to us does not.

The Josephs are understandably upset that AAA Travel won’t reimburse their airfares. However, their policy indicates that should they cancel their trip, they would receive a credit for future air travel, which must be used within one year of purchase of the tickets. It also indicates that airfares are nonrefundable. And the Josephs’ requests for help contain aggressive language, including accusations of theft, which would not move AAA Travel or Universal to offer them additional reimbursements for their costs.

Although the Josephs might have escalated their complaint to AAA using the executive contacts on our website, they contacted our advocates instead.

We reached out to AAA Travel but were told that because airfares are not covered under the Josephs’ policy, Universal will not issue a refund for them. We were also told that Joseph’s wife called AAA Travel in May 2016, two months before making the final payment for the trip, to ask what costs were covered by the policy in the event of cancellation.

As a gesture of goodwill, Universal offered to waive the change fees for the Josephs for use of their credit toward a future trip, but the Josephs were not happy with this resolution. Unfortunately, because of their hostile attitudes toward Universal and AAA Travel, we are unable to do anything further for the Josephs and declare their story a Case Dismissed.

Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for

  • cscasi

    It is a shame to lose money because one has to cancel for sickness or injury when one can purchase a travel insurance policy that covers those reasons (as well as others), plus can have a waiver that includes Cancel For Any Reason (usually only refunds about 75% of the costs covered).
    As was brought out, people need to read and understand their travel insurance policies, what is covered and not covered, whether the policy will cover the full cost of the amounts paid for the trip, including tours, flights, hotels, etc; if they are not cancelable or if , as in the case of air fares, can be canceled and the value used within a year of the purchase date for a change fee, etc.
    There is a lot to know and learn and one has to read through all the details, but taking the time and effort can pay off when something happens.

  • Charles Owen

    Let’s be absolutely clear about this: A lot of this problem could have been prevented had the Joseph’s purchased travel insurance. They did NOT! They purchased “travel protection”, specifically a Cancel for Any Reason “waiver”! Nowhere in any of the material does it use the term “insurance”, nor is a real insurance company listed at all. AAA should not have sold them this nonsense and should have made it clear to them that they were not buying travel insurance at all.

  • greg watson

    Confusion is the name of the game. As I understand it, if you see your doctor before your trip, & forgot or didn’t think to say that you had antibiotics for bronchitis (for example) on your travel insurance form, you could be denied a claim for something completely unrelated to a chest infection. Are there statistics that show the number of claims made & fully paid out ??

  • michael anthony

    The OP bought the cancel for any reason because there was a possibility down the road of surgery.
    It doesn’t say what the TA said, but rather saying the entire onus is on him to read the policy, I would think a reputable TA should also point out that this policy doesn’t cover return of airfare. Its a simple thing to say, followed by “You’ll find all the terms in this document”. That also gives the opportunity for the OP to say, do you have a policy that does?
    I don’t blame him for getting angry, although he did burn his bridges. Insurance documents can be confusing and so full of $@^$, that you almost need a PHD to understand them fully.

  • Charles Owen

    1++] Never buy “travel protection” plans. Always buy actual travel insurance.

  • Charles Owen

    Nonsense. Most reputable travel insurance policies offer a preexisting condition waiver if you purchase with some reasonable time of the first trip deposit. Buying a policy that does not include that waiver is not advised. I’ve bought trip insurance for years from two different companies. Never once have they asked me any medical details. There’s not “form”. They ask birthdays and basic travel details and that’s it.

  • Lindabator

    probably purchased as a package thru Universal Vacations – we sell such packages with various vendors as well – but offer 3rd party insurance if coverage of the airline tix are a concern (Frankjly – much prefer TravelGuard overall)

  • Lindabator

    not necessarily true — I sell these with Delta Vacations in certain cases, especially if they travel often, as they can just apply the voucher to another trip of their choice, just because the gals got in a fight before the trip and did not want to go. But knowing what you are buying, is vitally important.

  • Lindabator

    I have only had one client in over 20 years of selling travel have a compliant denied – because he LIED and the physician would not back him up. Otherwise, my clients have always gotten their refunds, as I take the time to ensure the insurance vendor has ALL the info they need on my client’s behalf, and go over what they need to get their doctor to specify for a quick resolution

  • Carol Molloy

    I have been wondering about that exact data set. I used to specialize in the insurance industry as a banker. The claims payout by premiums collected is an important ratio. I haven’t been able to find it for this segment. It should factor into selecting a provider.

  • Annie M

    This is where 3rd party insurance is the better way to go. You insure the entire trip, not just the land portion.

  • The Original Joe S

    I was unaware of the fact that there is a difference. Can you elaborate?

  • Charles Owen

    As soon as they say “insurance”, they are subject to regulations and oversight. They have to have an underwriting insurance company and maintain minimum requirements of funds to pay claims. You can appeal issues with insurance to the regulatory agencies.

    To get around this, some companies offer “travel protection”. It’s usually self-funded, meaning there is no outside company guaranteeing that claims will be paid. There is no regulation or anywhere you can appeal other than the courts. Companies do this because they want to keep the premiums themselves rather than allowing an insurance company to earn the money.

    Often plans called “travel protection” really are insurance. Delta Vacations travel protection is underwritten by Trip Mate. Carnval Cruise Vacation Protection is underwritten by Transamerica. But, that Universal Vacations plan is a “waiver”. No insurance company is mentioned. Normal things like preexisting condition waivers are not available. The only thing really covered is the hotel, so they are really making you pay to be able to cancel a room, something lots of hotels offer for free. Even though they sell you the airfare, that language includes only change fees and is cagey at best: “For a published air ticket, credit _may_ be issued…”

  • The Original Joe S

    Everybody is a prevaricator, it seems.

    Thanks for the explanation. Forewarned is forearmed, said Lalita Tripurasundari, the Red Goddess..

  • wilcoxon

    I agree. I was surprised when I read that AAA doesn’t cover air. If they’d had TravelGuard, they would have had zero issues getting a full refund (including air).

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