Covid-19 Guidance

Covid-19 Guidance

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Covid-19 Guidance

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Travel Insurance: Is It Worth It?

When Covid-19 hit, travel insurance didn’t help many travelers recover the cost of their canceled trips. What, then, were they paying for?

By Elaine Glusac

Through the travel insurance broker InsureMyTrip.com, Suzanne Tow of New York City paid $270 to cover a $5,000 trip in May to Yosemite National Park. When the tour was canceled, Ms. Tow filed a claim with her insurer, and discovered, like so many other travelers, that travel insurance doesn’t cover cancellations because of a pandemic.

“They’re not risking a penny because they’re not paying a cent,” she said.

Americans spent nearly $3.8 billion on travel protection in 2018, the latest figure available, up about 41 percent from 2016, according to the U.S. Travel Insurance Association. Now, for those contemplating traveling in an increasingly uncertain world, the question of whether travel insurance is worth buying looms large. If insurance couldn’t help with that first wave of Covid-related travel cancellations, many irate travelers ask, what exactly were they paying for?

That’s a good question

“Travel insurance is a line of insurance we consistently hear problems about,” said Carmen Balber, the executive director of Consumer Watchdog, a nonprofit consumer advocacy group. “It’s much less regulated than other lines of insurance and tends to include exclusions for things consumers believe they’re covered for.”

Though the rules vary by state, most standard policies sold in the United States provide predeparture cancellation and trip interruption for unforeseen problems that are specifically named, including job loss, an illness that prevents you from traveling or cuts a trip short, a death in the family, a missed flight connection that, in turn, leads to a missed cruise departure, and so on.

But there is a long list of exclusions that render the insurance void, including terrorist attacks, war and claims associated with psychological disorders, or risky adventure sports like skydiving.

When a threat becomes “foreseen” —— for example, once a brewing storm becomes a named hurricane, or a global health threat becomes a named pandemic — it is uninsurable, unless you bought the policy before the threat is named.

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