Realities of travel insurance fall short

  • By Christopher Elliott
  • Wednesday, October 16, 2013 1:27pm
  • Life

CSA Travel Protection’s website promises that its policyholders can “travel with confidence,” so when Norma Tarrow’s flight from New York to San Francisco was canceled after the recent Asiana Airlines crash landing, she felt protected, she said.

But she wasn’t, at least not in the way she thought. When she filed a claim for the $565 she had to pay for a new flight when her trip was interrupted, her insurance company turned her down, saying that the flight cancellation wasn’t a “covered reason” under her policy.

Her request didn’t seem unreasonable to Tarrow. She was in a wheelchair recovering from surgery when the aviation disaster left her stranded in a JFK terminal.

Her airline told her that the soonest it could fly her home was two days later, so she asked her son to book a ticket to San Jose, Calif., on another airline. If ever there were a time to invoke insurance, it was then.

A new study by the Washington-based advocacy group National Consumers League suggests that the travel insurance industry profits from customers like Tarrow by using misleading language to lure them into buying a policy, but denying too many claims based on the fine print.

It’s particularly critical of the airline industry, which it claims enjoys a symbiotic relationship with travel insurers, making hefty commissions on the sale of useless policies.

“Gouging consumers whose plans change because of a family illness or other unforeseen events is not a good business model,” said Sally Greenberg, the consumers group executive director.

This gap between a traveler’s expectation and the realities of travel insurance is hardly new. But the NCL’s conclusion that the chasm appears to be widening at the expense of the traveler is noteworthy.

The study says that while overall travel insurance sales are rising, surging 46 percent between 2006 and 2012 to $1.9 billion, so are airline change fees.

Air travelers are left with two options to avoid a $200 ticket change fee: book a refundable ticket (the cheapest costs 350 percent more on average than the cheapest nonrefundable ticket, according to NCL’s research) or buy travel insurance.

These policies are often sold online under high-pressure conditions, at the conclusion of an airline reservation and without adequate notification of the coverage terms, according to NCL.

The US Travel Insurance Association, a trade group for the travel insurance industry, says that some of the report’s findings are flawed. “There’s no correlation between the increase in travel insurance sales and airline change and cancellation fees,” says the association’s spokeswoman, Linda Kundell. “That’s a totally erroneous conclusion.”

The growth in travel insurance sales is linked to stepped-up industry efforts to market its product, increased consumer awareness of the benefits of travel insurance, and a rise in travel spending, according to Kundell.

But she didn’t disagree with all the NCL report’s conclusions. She says that the travel insurance industry is always concerned with the way its products are marketed online.

The NCL is calling for “common sense” reforms, including an industry pledge to market travel insurance in “clear, nonmisleading” language.

It’s also calling for congressional oversight hearings to review the relationship between rising change and cancellation fees and the aggressive marketing of cancellation insurance.

NCL is also proposing a tiered change fee schedule based on the proximity of your travel date.

By the way, Tarrow’s appeal didn’t have a happy ending, even after I took up her case. CSA stood by its decision.

Christopher Elliott is the ombudsman for National Geographic Traveler magazine. Email him at celliott@ngs.org.

© 2013 Christopher Elliott/ Tribune Media Services Inc.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Life

Brandon Hailey of Cytrus, center, plays the saxophone during a headlining show at Madam Lou’s on Friday, Dec. 29, 2023 in Seattle, Washington. (Olivia Vanni / The Herald)
Lynnwood-based funk octet Cytrus has the juice

Resilience and brotherhood take center stage with ‘friends-first’ band.

FILE - In this April 11, 2014 file photo, Neko Case performs at the Coachella Music and Arts Festival in Indio, Calif. Fire investigators are looking for the cause of a fire on Monday, Sept. 18, 2017, that heavily damaged Case’s 225-year-old Vermont home. There were no injuries, though a barn was destroyed. It took firefighters two hours to extinguish the blaze. (Photo by Scott Roth/Invision/AP, File)
Music, theater and more: What’s happening in Snohomish County

Singer-songwriter Neko Case, an indie music icon from Tacoma, performs Sunday in Edmonds.

Sarah Jean Muncey-Gordon puts on some BITCHSTIX lip oil at Bandbox Beauty Supply on Tuesday, Jan. 9, 2024, in Langley, Washington. (Ryan Berry / The Herald)
Bandbox Beauty was made for Whidbey Island locals, by an island local

Founder Sarah Muncey-Gordon said Langley is in a renaissance, and she’s proud to be a part of it.

Dominic Arizona Bonuccelli
Tangier’s market boasts piles of fruits, veggies, and olives, countless varieties of bread, and nonperishables, like clothing and electronics.
Rick Steves on the cultural kaleidoscope of Tangier in Morocco

Walking through the city, I think to myself, “How could anyone be in southern Spain — so close — and not hop over to experience this wonderland?”

chris elliott.
Vrbo promised to cover her rental bill in Hawaii, so why won’t it?

When Cheryl Mander’s Vrbo rental in Hawaii is uninhabitable, the rental platform agrees to cover her new accommodations. But then it backs out. What happened?

Byrds co-founder Roger McGuinn, seen here in 2013, will perform April 20 in Edmonds. (Associated Press)
Music, theater and more: What’s happening in Snohomish County

R0ck ‘n’ Roll Hall of Famer Roger McGuinn, frontman of The Byrds, plans a gig in Edmonds in April.

Mother giving in to the manipulation her daughter fake crying for candy
Can children be bribed into good behavior?

Only in the short term. What we want to do is promote good habits over the course of the child’s life.

Speech Bubble Puzzle and Discussion
When conflict flares, keep calm and stand your ground

Most adults don’t like dissension. They avoid it, try to get around it, under it, or over it.

The colorful Nyhavn neighborhood is the place to moor on a sunny day in Copenhagen. (Cameron Hewitt)
Rick Steves: Embrace hygge and save cash in Copenhagen

Where else would Hans Christian Andersen, a mermaid statue and lovingly decorated open-face sandwiches be the icons of a major capital?

Last Call is a festured artist at the 2024 DeMiero Jazz Festival: in Edmonds. (Photo provided by DeMiero Jazz Festival)
Music, theater and more: What’s happening in Snohomish County

Jazz ensemble Last Call is one of the featured artists at the DeMiero Jazz Festival on March 7-9 in Edmonds.

Kim Helleren
Local children’s author to read at Edmonds Bookshop

Kim Helleren will read from one of her books for kids at the next monthly Story Time at Edmonds Bookshop on March 29.

Chris Elliott
Lyft surprises traveler with a $150 cleaning charge

Jared Hakimi finds a $150 charge on his credit card after a Lyft ride. Is that allowed? And will the charge stick?

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.