There are many differences between travel insurance and a vacation waiver. Christopher Benson learned about those differences in a hard way.
When Benson and his wife, Betty, planned a trip to Paris, Orbitz offered them a “vacation waiver” option that looked a lot like travel insurance. But it wasn’t. So when the Bensons tried to invoke the waiver, it didn’t work as they expected. Lufthansa would not refund their tickets from Chicago to Paris.
“I feel I’ve been duped,” says Benson. “They offered a vacation waiver, which does not seem to work.”
Technically, the Orbitz vacation waiver is not a travel insurance policy. It’s an add-on product that allows you to change or cancel your trip for any reason. Orbitz waives any cancellation fees and will refund any amount returned by the travel provider. It also offers a travel credit, good for a future trip.
But Benson thought he had a traditional travel insurance policy protecting his vacation.
Unfortunately, he didn’t.
Benson’s confusion is common. Consumers who want to protect their vacations may be considering travel insurance, but then get tempted to buy a less expensive vacation waiver or trip protection plan. But there are critical differences worth knowing.
“Travelers do not understand the difference between travel protection versus travel insurance,” says John Lovell, Travel Leaders Group’s president for leisure travel, supplier relations and networks. “Many times these terms are used interchangeably from one provider to another.”
Benson’s request took a tragic turn when his wife passed away, leaving him with vouchers he wouldn’t use. The Elliott Advocacy team contacted Orbitz on his behalf, and the company negotiated a full refund with Lufthansa.
What is a vacation waiver?
But Benson is hardly the only traveler surprised by a vacation waiver. James O’Connor, an attorney with the Nickless, Phillips and O’Connor in Fitchburg, Massachusetts, has filed a lawsuit against river cruise company Vantage Travel. He says the cruise line sold a travel protection plan that promised to cover passengers for any mechanical breakdown that causes a complete cessation of services for at least 12 consecutive hours. O’Connor says Vantage did not honor the claims.
“This travel protection appears to be a rip-off,” he says.
Vantage says there was no cessation of services for 12 consecutive hours. “The vessel was used as a hotel, with meals and all other shipboard activities,” says Gary Greenstein, Vantage’s chief financial officer. He noted its protection policy also contains a ‘‘cancel for any reason’’ provision that allows passengers to cancel their vacations before their trips.
“We think the plan is a very good one and well worth travelers considering its purchase,” he adds.
How trip protection has changed
Products such as vacation waivers and trip protection are not the same thing as travel insurance. But they’re more similar today than ever.
“In the past, trip protection could look a lot like travel insurance when sold by cruise lines or tour operators – except that it wasn’t,” explains Stan Sandberg, co-founder of TravelInsurance.com, a travel insurance website.
Travel insurance is an actual insurance product underwritten by large insurance companies and regulated by state insurance agencies. But trip protection plans and vacation waivers are much riskier propositions and could be full of exclusions. They might only cover a portion of the trip and not reimburse you for a cancellation but instead issue you a credit for future travel.
Also, often the protection plans are backed by tour operators instead of highly rated insurance underwriters. So if a tour operator runs into financial difficulties, it might mean your trip protection was worthless.
That’s starting to change, says Beth Godlin, president of Aon Affinity Travel Practice, a travel insurance company. Today, many travel protection products bundle travel insurance with other benefits and services, like 24/7 travelers’ assistance. For example, Vantage’s program has an insurance component, but like all insurance, its coverage is limited.
Make sure your trip protection has an insurance component
“When you purchase travel protection through a cruise line or a tour operator, known as supplier plans, both the insurance and those additional benefits are tailored to the type of trip you’re taking,” Godlin says. “These plans give travelers seamless, customized coverage in one easy-to-purchase package.”
In other words, the most reputable travel companies that offer trip protection will have actual insurance components in there somewhere. But you have to look for it. A few companies continue to sell old protection that may or may not work.
Steve Dasseos, CEO of TripInsuranceStore.com, says buyers need to beware when they hear the term “trip protection” or “vacation waiver.”
“People assume all plans are essentially the same,” he says. “They are not.”
How to tell if your vacation waiver or travel protection will protect you
- Look for real protection: Some plans promise to do what any self-respecting tour operator or agency would do, like process a change or cancellation on your behalf. You don’t need to pay extra for that. Look for a cash refund when you file a claim for a covered reason. Remember, trip protection and vacation waivers do not typically provide a refund in the event of your cancellation.
- Look for a travel insurance component: Insurance is a regulated industry – promises are not. If you’re shopping for travel protection, make sure you’re dealing with a travel insurance company and underwriter. (Any reputable travel insurance underwriter will be rated by AM Best and be a member of the US Travel Insurance Association).
- Look for a name you trust: Saying it’s “insurance” isn’t enough. Make sure you’re dealing with a well-known brand, like Allianz Travel Insurance, Travelex, Travel Guard or Generali Global Assistance. These companies have a brand name to protect and will help you if something goes wrong on your trip, as long as you’re filing a claim for a covered event.