I bought travel insurance — so why isn’t it helping me?

Lance Delfino and his wife booked a cruise through Windstar Cruises to celebrate their fiftieth anniversary. But a month before they were scheduled to depart on the cruise, Delfino’s mother-in-law, who lives with them, was diagnosed with Stage 4 lung cancer. Delfino and his wife were forced to cancel their cruise to tend to his mother-in-law, who needed in-home hospice care and was not expected to survive longer than two months.

I can hear you now: “They should have bought travel insurance.”

This refrain, which comes up almost every time we get asked for help in securing a travel refund, made me curious. I wanted to know whether being covered by a travel insurance policy actually benefits travelers in sudden need of refunds. My colleagues told me about Delfino’s case.

The Delfinos did purchase travel insurance through Travel Guard, a division of American International Group (AIG). They filed a claim with Travel Guard for the cost of their cruise, filling out the requisite paperwork, and were told that it would take one month for Travel Guard to receive the documents and process the claim.

More than one month later, a claims adjuster at AIG emailed Delfino stating that she was requesting his mother-in-law’s medical records. Delfino responded to thank her and to ask that she contact him with any further questions. But two weeks went by with no further contact from the adjuster or anyone else at AIG.

Delfino then called AIG’s customer service. The customer service representative informed him that AIG had received his mother-in-law’s medical records and to call back “if need be” in another two weeks. Two weeks later, having heard nothing, he called AIG again and was told to call back in one more week.

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One week later, Delfino called again:

I called the person who requested the medical records at the number listed on her original email. Her voicemail message was that she was on extended leave until mid-April 2016. I called customer service — that fellow told me to not worry; my claim would be handled. I waited a week and called again. Another fellow told me that the person I had talked to before had not reassigned the claim to someone else, but that he would do that and expedite the claim. I called my travel agent, who referred me to her salesperson. I called her and left a message.

Then I got a telephone message from another person at AIG that the doctor’s office was charging for records she needed to see, so she would be mailing a check to them the following Monday and would wait for the records. I called her back several times and left message after message asking her to call and let me know the status of the claim. I have received no return calls, no email, no documentation of any kind.

So over three months passed while Delfino waited for someone to call him back, hearing only crickets chirping and “call back in a week or two” — each time from a different person — in response to his requests for updates.

No matter how extensive travel insurance coverage might be, it’s only good if the insured can collect on the policy — which is possible only if the insurer’s claims department is responsive to the insured. When it isn’t, as in Delfino’s case, the “insured” is in a worse position than he or she would be in had he or she never purchased travel insurance in the first place, because of the money wasted on premiums.

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And unresponsiveness from insurance companies isn’t the only problem with travel insurance. Travel insurance policyholders often find that their situations aren’t covered because of exclusions for pre-existing medical conditions and elective surgery or medical treatment. War and acts of terrorism, such as the recent attacks in Brussels and Paris, are also frequently either completely excluded or have to fall within a travel insurer’s very narrowly defined criteria for coverage in order for a policyholder to collect reimbursement from the insurer.

So having travel insurance isn’t the cure-all that chanters of “shoulda bought travel insurance” would believe.

Delfino did finally hear back from AIG — after our advocates got involved. AIG apologized and agreed to issue a check to Delfino for the correct amount, “less the original charge for the insurance.” Now he’s waiting to receive the check. Who knows how long that will take?

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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