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Claim denied on a terrorism technicality

October 24, 2009

delhiQuestion: My travel insurance claim has been denied, and so have my appeals. I hope you can help us.

My husband and I were scheduled to visit India last Thanksgiving, the day after the horrific terrorist event began. British and Americans were being singled out and murdered, hotels were being burned, and threats were made of hijacking and attacks on airports and train stations in the country.

We were terrified of the unfolding events, and canceled our travel plans. We had purchased a travel insurance policy through Access America. One of the named perils is a terrorist event.

Access America has denied our claim because we were scheduled to travel to New Delhi, and the hotel that was under siege was in Mumbai. I believe that the definition of destination — according to their policy and the online dictionary — includes the entire country. Plus, as part of the terrorist activity, impending threats were made to airports, train stations and other places throughout India.

We’ve lost about $7,300. Is there anything you can do? — Diane Gandara, Napa, Calif.

Answer: I agree with your definition of a destination. Access America should have refunded the money you spent on your vacation.

Why didn’t it? I asked the company, and a representative told me that in order to make a successful claim, the terrorist event would have to occur in the city you were traveling to. Since you were on your way to Delhi, not Mumbai, the claims examiner was technically correct to deny your request.


That clause should have been clearly spelled out in your contract. If you didn’t read it before you bought your policy, you should have reviewed it before making your claim. That way, you could have saved yourself months of pointless back-and-forth between you and the insurance company.

Of course, Access America could have been clearer with you. A quick look at your policy and its definition of “destination” would have shown any capable phone agent that your claim would have gone nowhere. Why didn’t someone tell you that your trip to Delhi wouldn’t be covered if you canceled?

I read contracts every day, but none are as confusing as the ones for travel insurance. Now that I think of it, I’m not entirely convinced that you would have been able to understand your contract, even if you’d studied it. Do you need a law degree to make sense of the paperwork? Maybe.

You were correct to appeal your case to Access America. More than 90 percent of insurance appeals are decided in a traveler’s favor. After that, you could have gone to arbitration, which means you allow a neutral, third party to decide your case. Or you could have taken Access America to court.

Copying the insurance commissioner in your state might also motivate your insurance company to see things your way.

As it turns out, none of that would be necessary. Access America recently switched to a new underwriter with a more inclusive definition of “destination.” It reviewed your claim again. “In this case,” said spokesman Mark Cipolletti, “the entire country of India should be considered the destination.”

Access America agreed to process your $7,300 claim.

(Photo: Panoramas/Flickr Creative Commons)

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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9 comments

  • Robert

    I hate to say it, but I have to come down on the insurer’s side here. New Delhi is a long way from Mumbai. People tend to think that when there’s some kind of uprising or disaster at one particular point, that the entire country turns into one big flaming spot on the map (stopping precisely at the border, no less). In fact, the size of the trouble zone is often measured in terms of a few square blocks or at most a few square miles.

    Watching CNN from thousands of miles away is always the wrong way to get information. Usually a simple phone call to the hotel you’re planning to stay at is a better way of getting information. You might find out (taking real examples that I’ve experienced) that yes, the river has flooded and there are three feet of water downtown, but where you’re staying is up in the hills, high and dry; or that yes, the war in the south has heated up again and there was shooting yesterday, but up here in the north of the country, many miles away, everything is just like normal. But if they don’t answer the phone, well, then something probably IS wrong.

    I am familiiar with the customer’s state of mind here, but they could well have taken a more critical approach. The insurance company was justified to take the position that people need to have a realistic appreciation of risk when they try to file an insurance claim on the basis of disasters or unrest. It’s honest business practice and reflects a level-headed view of the world.

  • http://mlbx@hawaii.rr.com Mort B

    I disagree with Robert’s comment. Sure, if the problem is a natural disaster such as flooding, it would be reasonable to assume that there are geographic limitations to the danger zone, and that a problem several hundred miles away may not be a reason to cancel one’s travel. Terrorist activities are another ball of wax, and the Gandara’s were being reasonably prudent in canceling their travel plans. It should be noted that when the State Department issues a travel advisory, it is normally for an entire country and not a single city or province. In short, these folks were entirely reasonable in requesting a refund and it should have been issued without the need for intervention by Chris Elliott.

  • Ronda

    where I agree with the 2 posts ahead, why would anyone want to take that chance? if they are targeting planes and other transportation then being on the side of caution is a good thing.

  • http://nodebtworldtravel.com brian

    The letter of the contract probably stipulated narrowing it to a city. The true meaning for travelers should include the whole country.

    On 9/11, New York AND DC were targets. It was safe to assume in the first hours of the attack that other major American cities were also targeted. Major skyscrapers and office building emptied out that day.

    I would not have blamed anyone for cancelling a trip anywhere in the US in the immediate aftermath of 9/11. Weather incidents, flooding are local phenomenon. A group of terrorists can split themselves up to be anywhere.

  • Ames

    Robert – would you being saying the opposite if the Gandara’s ignored the warnings and had to be rescued at great expense by the US Embassy? They have taken personal responsibility for their own safety and even purchased insurance although they should have read it more closely and not relied upon the website.

    There are a few hundred miles between New Delhi and Mumbai but New Delhi is NORTH towards Pakistan and into an area which is more likely to be unstable if there is a terrorist problem. Have you traveled in India to understand how much an American or Brit stands out on the street? As it turns out, this all quieted down quickly and I hope the Gandara’s reschedule their trip. India is a beautiful country and the people are generally friendly.

  • Brian C

    The whole point of terror attacks is that they are designed to instill fear, rational or irrational, into innocent bystanders. That includes not only the fear of what has happened, but what COULD happen. The people who perpetrated the Mumbai attacks seemed to have come out of nowhere, raising the possibility that there could be other pods positioned elsewhere in the country waiting to strike.

    I agree with the Gandaras. Continuing with their plans with the information that they had would not have been prudent. Hindsight is 20/20, and we can safely say now they would not have been in danger, but how would they have known that within a few days or hours of the initial events?

  • Dang

    When the Government issue a warning concerning a destination, it’s always a country, rarely a city. The same logic should apply to the insurance coverage.
    Any trouble (terrorist, earthquake, hurricanes, volcano erruptions etc.. ) affect a city ,and by consequence, affect a port of entry of this country so other cities and other ports of entry will be affected significantly.
    Mumbai is a biggest and most important point of entry then New Delhi, like New York compare to Washington DC.
    Diane Gadara had made a good decision not to go. No doubt. Who could have said then New Delhi was safe to go.
    Insurance companies have lot of imaginations about denying claims and vague about the terms of coverage.

  • Lisa S

    Once again, Chris was able to help another person. I am so grateful we consumers have you on our side! It is because of posts about Access America that I went with another travel insurance company for my next trip. Hopefully we won’t need the insurance, but if we do and everything goes well (or doesn’t go well), I will keep you all posted.

  • Tim

    I agree with those that said that terrorist attacks can affect an entire country and that the insurance should have accepted the claim when it first was received.

    Robert does have some valid points, in particular that more intel is needed than can come from some MSM station. For instance, there was a big brouhaha about going to Mexico earlier this year; yet, when my family and I flew to Arizona and drove into Mexico, we saw no problems and had a great time. But then, the issues Mexico were having (and probably still having) was gang-related (drug cartels if I remember correctly), so the problems were localized, not potentially national as a terrorist attack would have been. And leading up to our trip, we got our intel from our friends that were living in Mexico.

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