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.

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.

  • Annie M

    This is a freak occurance. This never should have taken so long.

    And folks, if you receive a denial for a claim that should have been paid, you can appeal the denial and have it looked at again. The insurance companies make mistakes too and sometimes just going back at them and telling them where they were wrong results in getting the claim overturned.

  • Alan

    Why the “less the original charge for the insurance”? From that writing it seems they charged for the insurance and then used the premium amount as a deductible. Is that correct?

  • sirwired

    Huh; it’s been a while, but the last time I filed a claim with TravelGuard, it was less than three weeks from the original phone call to receiving a check.

    Certainly, I could support the idea of insurance regulators specifying some maximum amount of time insurers are allowed to “sit” on a claim.

  • sirwired

    I’m guessing from this statement that they tried to claim the insurance premium itself as part of their “trip cost”, even though it is not a coverable expense.

  • LDVinVA

    I hope that’s the case. You pay for the insurance up front.

  • Rinacres

    “it’s only good if the insured can collect on the policy” A few years ago my husband and I took a cruise on Holland America to Alaska. We bought travel insurance thru TravelGuard and got the Gold policy. When my luggage didn’t arrive at the cabin, I went looking for it. Turns out they had dropped my bag in the ocean when loading it and were currently washing and drying everything. They never intended to tell me of the mishap. Well, their laundry service ruined 4 articles of clothing that were dry-clean only, and they completely ruined my down pillow. The cruise line said they have no responsible for damaged luggage/goods, so I filed a claim with the insurance. They kept asking for more details, more receipts, more questions. After 6 mths, I gave up and ate the cost (about $500).

  • Lindabator

    True – and ensuring your doctor KNOWS they will require information from him is a good head’s up as well, as THEY can take up time. Frankly, never takes more than 2 weeks for any claims I put in for my clients, but then I always ensure all documents are received, and nothing is left out of those needed.

  • Lindabator

    You need to ensure they have ALL paperwork — if they do not get it, you do not get it.

  • SierraRose 49

    The above story almost sounds like our recent experience with Travel Guard – for a $200 claim. Multiple phone calls – always with a different rep and the usual response of “we received so many claims in recent weeks” to “we’re reviewing your claim”, followed by “we’re undergoing a major computer change,” followed by “your claim has been assigned to another reviewer.” So I posted a polite query on Travel Guard’s FB page and lo and behold, a check was issued. Whole process took about 2 months.

  • Alan Gore

    Travel Guard – isn’t that the travel insurance that we keep finding doesn’t work?

  • Stuart Falk

    If the travel insurance is sold by a travel agent, as is often the case due to the commission paid by the insurance company, it should be the responsibility of the travel agent to fully and clearly explain the policy’s coverage and exclusions. The great majority of travel agents don’t do this and just refer their clients to the insurance company’s legal document.

  • Rebecca

    It bothers me that the OP’s travel agent didn’t help. Mr Delfino states he “called my travel agent, who referred me to her salesperson. I called her and left a message.” The agent certainly should have done more; I’m sure a good agent would not only call herself, but follow up until Mr Delfino had a check in hand. He shouldn’t have to contact a consumer advocate, although I’m glad Jennifer was able to help.

  • JewelEyed

    Yeah, this article missed an opportunity by not noting that “Shoulda used a travel agent” doesn’t fix everything either.

  • Bob Davis

    I’ve had excellent service in the past with Travel Guard. Spoke to someone on the phone, sent the requested records (including medical) and had a check in about 2-3 weeks.

  • Pegtoo

    So the OP sat waiting for the insurance company to respond while the trip departure time came and went. What if they were denied, and the OP could have taken advantage of other options? (reschedule, join the trip late, etc. ) If the insurance company sits around eating bon bons while the days go by, your options lessen. I asked advice from our insurance once, and they couldn’t give me “real” answers until all the paperwork was submitted. If you’re trying to salvage a trip in real time… quick response is key.

  • cscasi

    “So having travel insurance isn’t the cure-all that chanters of “shoulda bought travel insurance” would believe”. This is “one” case that points to that. However, I have never had an issue with my travel insurance company that I use when we take trips. I have had to use it three times over the years and it has always been prompt in processing my claims and in getting the amount due me within ten days of processing the claim (processing time normally took about a week to ten days). Of course, I can only speak as to my experiences. I feel generally speaking, having travel insurance does help when the need arises; provided you comply with the rules called out in the policy and provide the required documentation.

  • Tricia K

    And the detail that was left out is that he dealt with this bs while tending to his mother in law who was so sick that they had to cancel their trip. I buy trip insurance for the big expenses that I can’t afford to eat. But when you read the fine print, they have a lot of ways out of it. I don’t think it’s fair to represent the insurance as protection for your trip and then make you do handstands after you broke your arm to get paid.

  • Tricia K

    When I was looking for trip insurance a few weeks ago, I found their rates to be much higher than the others as well.

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