Why won’t Allianz pay my expenses?

Travelers often have to cancel their trips – or their travel companies aren’t able to transport them to their final destinations, provide lodgings, or otherwise deliver prepaid goods and services.

That’s where having travel insurance is supposed to help them out, as many readers of our site like to point out when we publish stories of travelers who can’t get where they need to go.

But what if your travel insurance policy pays you only a partial reimbursement for expenses that are supposed to be covered as part of a valid claim? How valuable is having travel insurance in these circumstances? Catherine Detwiler wants to know the answer to this question, because she found herself in this situation when she tried to collect on her travel insurance policy with Allianz Global Assistance after a trip interruption.

Detwiler had scheduled a trip with a tour group going to Cuba, which required her to take several connecting flights from Oaxaca, Mexico, to Havana via Mexico City and Panama. But her flight from Oaxaca on Aeroméxico was delayed by four hours because of air traffic congestion at the Mexico City airport that prevented the flight from landing on time. She was forced to purchase a new full-fare ticket on Copa Airlines to continue her trip after a 14-hour wait in Mexico City because her original ticket from Mexico City had been resold.

Detwiler filed a claim for $683 on her Allianz travel insurance policy to cover the cost of the Copa Airlines ticket as well as meals and two Mexican telephone cards, which she purchased in order to make phone calls to rebook her flights from Mexico City.

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Unfortunately, there’s a lot of hype surrounding travel insurance, as well as a lot of fine print. The combination leads travelers to believe that they can expect reimbursements, only to find that because of fine print in policies, travel insurance companies set limits on the amounts they’ll pay on claims. The terms and conditions of many travel insurance policies include daily maximums and other limits on coverage for trip interruption losses. And travel insurance companies may delay processing a claim, even when they promise that claims will be processed within a specified period of time.

Three months after filing the claim, Allianz paid Detwiler a total of $400 — $200 of which she received only after contacting our advocates for help. When we reached out to our contacts at Allianz about Detwiler’s case, our advocates were told:

We provided Ms. Detwiler with an additional day of travel delay coverage as a consideration for her circumstances. It’s important to note that travel delay benefits have a per person/per day maximum. Unfortunately, her situation is not covered by missed connection coverage as that benefit applies only when you miss your connecting flight due to a traffic accident or severe weather.

Detwiler’s policy carries a limit of $800 for for travel delay coverage, so her claim falls inside that limit — except that the policy also carries a $200 daily limit. Allianz will only reimburse claims of up to that amount that were incurred in a single day. So the maximum Allianz would pay on the claim was $200 — with another $200 for the additional day “as a consideration for her circumstances.” Allianz won’t cover the remaining $283.

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When you purchase a travel insurance policy, always be sure to find out what is and isn’t covered before you start out on your trip — including any conditions that may reduce or eliminate the amount you may be reimbursed for a claim, such as a daily maximum payout that may be lower than a policy maximum.

If you purchase the policy through an agent, go over the policy with the agent with a fine-toothed comb.

And be aware of — and prepare for — possible delays in processing your claim. Allianz’s website promises that once it receives all the requested documentation for a claim, it will “immediately begin review” of the claim, and asks that claimants allow up to 10 business days for Allianz to complete the review. But its initial response to Detwiler’s claim didn’t take place until three months after the claim was filed.

Finally, no matter how valid your claim is, be aware that insurance companies rarely waive policy terms in favor of the insured. Despite Detwiler’s circumstances, she — and we — have concluded that “this claim is now completed and nothing more can be done.”

Do travel insurance companies make it too difficult to collect reimbursement for valid claims?

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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.

  • Harvey-6-3.5

    I’m waiting for the industry apologists to explain why this OP had it coming to her.

  • AAGK

    I didn’t even read the article yet, I am just replying to the headline. Allianz adopted an uncooperative and obstructive way of doing business. There should be an insurance company that covers Allianz denials.

  • MF

    Over promise & under deliver, stall & delay till the customer goes away is a good business model, if you are running a scam…

  • AJPeabody

    I notice that a certain travel insurance company is an underwriter for this site.

  • Éamon deValera

    It is not fine print. The law requires that it be at least 8 point type. No part can be smaller than any other except headings which are not part of the contract but for ease of reading.

    It really can’t be that hard to read a policy. You must be given the policy before you pay or be allowed to cancel after paying and reading the policy (one or the other) of course you can’t have started travel before you cancel.

    I’m no apologist for insurance companies, in fact the exact opposite, I regulate them. However read your policy and see what it covers. If you have a complaint contact the insurance regulator in your state. All insurance is regulated at the state level.

  • taxed2themax

    I tend to agree.. These kinds of transactions tend to be pretty well regulated in terms of what must be disclosed, where and how.. So, I think there is some onus on the buyer to know and ask questions before buying, about what is or is not covered. I think they could write perhaps a summary in layman’s language, but the risk there is that one may misunderstand the summary and expect that to overrule for policies formal wording.

  • They usually don’t post on these types of articles, for some reason. ;)

  • Pegtoo

    I can’t believe travelers still click the “purchase policy” button and don’t look at the details first. The coverage amount for travel delay (as well as the length of time required before it kicks in) is important to know… just like medical coverage and baggage coverage, and all the other coverage you are purchasing. There are two websites (that I know of) that display all this important info for a consumer to compare, and select the best policy for their specific circumstance.

  • James

    If she had bought travel insurance insurance, she’d have been covered for the fine print of the first company.

  • Lindabator

    Its not a matter of “coming to her” – she had a limit, which they paid. She could easily have chosen a better policy with higher limits (never sell these cheapie coverage policies to my clients, and have had $1650 per person for delay paid out)

  • Lindabator

    Exactly – she got what the coverage allowed – if she had a policy with a higher payout, she would have gotten more

  • Michael__K

    The law requires that it be at least 8 point type.

    Can you cite this law (you keep asserting this and I’ve asked before for a citation)?

    The only federal laws on this topic I could find pertain to prospectuses distributed by banks and publicly traded companies.

    For insurance policies, I believe the rules vary substantially by state, and not every state has such a requirement.

  • jae1

    The problem was with her travel insurance. Are you suggesting she should have bought secondary insurance to cover the deficits in her initial policy? Is that even possible?

  • Annie M

    She needed to buy a policy that had higher coverage.

  • joycexyz

    Amen, Eamon!

  • joycexyz

    You can’t believe travelers don’t look at the details? Most of the complaints on this website are a result of exactly that!

  • Lee

    Every policy I’ve purchased has those limits listed even before I get to the down and dirty terms and conditions. For example, just to confirm my memory is still alive – I did a dummy search on Squaremouth putting in a random amount for the trip cost – when you click on policy details (which is just the basic info, not the full terms and conditions), this appears:
    “$500 per person
    $150 daily limit
    Covered after 6 hour delay”

    I’m not an apologist but I have seen this for every policy I have ever researched and/or purchased. It is just the first page that comes up after clicking “Policy Detail” which one absolutely must do in order to have any idea at all what is even included in the selected policy.

    I’m glad she was eventually given additional monies; these cos do whatever they can to find ways to avoid paying but the key, to me, is carefully reading the terms/conditions and then contacting them with any questions for clarification. If it exists, I use the chat feature so I then have a record of the chat and responses.

    Anytime I see the word “may” (as in “may cover ABC” – I grill the rep for specifics and in some cases, have not chosen a certain policy because of responses.
    It’s tricky stuff with these companies because it is all about them keeping as much money as possible.

    If there is a buyer beware industry it is the insurance industry whether for health, home, car, travel – whatever.

  • Éamon deValera

    Insurance is regulated at the state level as I noted previously. There would be no federal law.
    For Florida it is codified in Statue, the Florida Administrative Code and in case law such as QBE Insurance Corp. v. Chalfonte Condominium Apartment Association, No. SC09-441 (May 31, 2012).

    If you would like it for your particular state consult an attorney who practices in your state.

  • Éamon deValera

    You can buy two policies that will share a loss. For example policy A pays $500 when X happens. Policy B pays $500 as well when X happens. Policy A costs $10 and Policy B costs $10. Policy C pays $1000 when X happens.

    If X happens you’re paid $1000 for your loss either way.

    It is more cost effective to buy policy A and Policy B than policy C alone. If the coverage in A and B are different they pay pro-rata.

    This is unlikely, but it is possible. Commercial property insurance is more likely to have this sort of arrangement, when insurance a port or stadium or skyscraper. But you can do it with travel insurance if you find it saves you money.

  • Éamon deValera

    I don’t agree with the buyer beware assertion you make regarding insurance. Other than securities and banking no other industry is as regulated as insurance. If your insurance agent willfully misleads you he will lose his licence AND be prosecuted criminally.

    I’ve never heard of a car salesman losing his car salesman license or a barber going to jail for cutting your hair differently than you asked for. Insurance regulators in every state can revoke a license, institute civil actions to recover money damages and arrest and prosecute criminally for violations of insurance laws.

    Your state insurance regulator has educational materials about many different kinds of insurance, avail yourself of them and be an educated consumer. Not knowing what you need can indeed be the cause of a consumers over or under insuring or omitting a needed coverage completely.

    Compare your insurance needs and consult an independent agent (one not tied to only one insurance company). You will surely find a better deal and more proper coverage than buying blindly. As an example I am covered for car crash liability up to $5MM everywhere in the world 365 days a year for $283 because I know what questions to ask of my agent.

  • Michael__K

    Ok, so without knowing the state, territory, or foreign country where this customer resides, we really can’t say how small the fine print could have been.

  • Michael__K

    In most states this is not accurate in the case of travel insurance…

    [As of Oct 2014] 31 states have adopted a standardized law that for the most part enables agents to sell travel insurance without a license
    The model law allows travel agents to “offer and disseminate” travel insurance. It’s a semantic subtlety that means agents can offer general information, process the application and collect the premiums, for insurance.
    “Travel agents are not in the business of acting like a professional insurance agent,” Zemp said


    When a travel agent offers travel insurance, they aren’t—nor should they be—claiming to be an expert on travel insurance. If you are making those claims, giving advice, or specifics of the plans, stop now. Henceforth, it’s in everyone’s best interest that travel agents are simply offering/recommending a product that would be helpful to their clients.

    Travel agents offering travel insurance is a gray area.

    Travel Agencies That Offer Insurance Raises Questions:

    Are travel agents acting as an insurance agent or simply as someone recommending a product?

    Does a travel agent need their own license to sell travel insurance or is an agent under the travel insurance company’s license?

    Do travel agents need an agency license, an individual license, or both?

    If an agency needs their own travel insurance license, what about hosted agents? Can they be under their host agency’s travel insurance license?

  • cscasi

    Concerning your liability coverage, is that a rider you have on your auto insurance policy or is it an umbrella policy? My umbrella policy picks up when the auto policy limits are maxed out in the case of being sued for a at fault wreck I cause. Just curious.

  • jae1

    Thanks for that clarification. I wouldn’t have thought that buying two policies would be cheaper than one, or that two policies would both pay out on the same claim.

  • Éamon deValera

    You could tell me and I could find the information. You could even look it up yourself. A link to the contract could be posted – which of course negates any fine print argument at text online can be enlarged to one’s heart’s content.

  • Éamon deValera

    What does that mean? It is like saying cars from different companies don’t offer different comforts for different drivers.

  • Éamon deValera

    Check the map for your state. http://www.naic.org/state_web_map.htm
    Yes, some states have allowed travel agents to sell only travel insurance policies. Some of those states also license travel agents.
    However all of the travel insurance policies are sold by licensed insurance companies that are regulated by the state offices of insurance regulation.

  • Éamon deValera

    Umbrella policy. While it covers above X in the US (for example if I had 500K combined single limit liability on the car, it would cover five million dollars above that 500K, in effect $5.5)

    Umbrella policies are almost without fail (ask your agent to point it out in the contract) applicable worldwide. So while my personal car insurance may not cover liability when I am in Peru or Poland my Umbrella policy will cover five million dollars and drop down to dollar one as I am not required to have insurance in those other jurisdictions.

    This is only liability, not damage to a rental car or your own property or person.

    In general, some strange policies may differ.

  • Michael__K

    We don’t know what Allianz policy in what state this customer purchased, so it’s premature to declare what the law requires in her case (if anything).

    For the Allianz policies I’m familiar with, the font size of the contract is not the issue from my perspective. However, they know very well how to emphasize and make sure you read the [large print] content which they want you to read. And they know very well how to de-emphasize the caveats. The “small print” contract is not even available to read until the last possible moment in the checkout process, after you’ve already been asked for every piece of information including your credit card number.

    And you’ve fallen for the large print hype over the small print details yourself, asserting that a policy covers something which you would expect to be covered, but which the small print provides no terms that cover it. For example here: https://disqus.com/home/discussion/elliott/the_control_center_was_on_fire_but_travel_guard_still_won8217t_pay/#comment-2515708677

    Which illustrates the “fine print” problem….

  • Michael__K

    The point is, it is “buyer beware” and it’s bad advice to suggest otherwise when the travel agent is not required to have any special insurance expertise, has no fiduciary duty to the customer, and stands to earn large commissions . And the products they are selling are not necessarily insurance products — sometimes they are vacation waivers, which are entirely beyond the reach of regulators.

    That’s not to say that there aren’t terrific travel agents out there. But we also see, in this very space, contributors who represent themselves as agents who assert misleading information about the scope of coverage and make unsupportable claims, contradicting what the fine print says.

  • Éamon deValera

    If it doesn’t say insurance it isn’t insurance. If someone is so dense as to not be able to understand an insurance contract perhaps they shouldn’t travel alone.

    I’ve yet to see anyone represent themselves as an insurance agent and make misleading statements. If anyone wants me to validate someone’s insurance licensure in any state I can.

    We get it you don’t like travel insurance. Don’t buy it. However it is simply wrong to try to dissuade others from buying proper coverage by trotting out your tired arguments about being mislead.

  • Michael__K

    If it doesn’t say insurance it isn’t insurance.

    Not necessarily. Sometimes it says “insurance” but part of the offering includes a waiver which is not insurance. Sometimes those who sell insurance tout a CFAR waiver as part of a discussion about insurance, but don’t mention that some of what they reference is not insurance.

    If someone is so dense…

    Here you demonstrate my point. You’ve gone from asserting that it’s not ‘buyer beware’ because we can trust these heavily regulated ‘agents,’ to insulting customers because of course they need to tune out the sales pitch and scrutinize the contracts for themselves (buyer beware!)

    And you insult others even though you’ve fallen for the sales pitch and failed to understand what insurance contracts cover yourself:

    I don’t dislike travel insurance per se and I’m not here to dissuade others from buying proper coverage. I do dislike when salespeople and laissez-faire ideologues paint an irresponsibly one-sided rosy picture and tout travel insurance as a panacea. And I will rebut them whenever I can.

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