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.

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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 Elliott.org. Read more of Jennifer's articles here.

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