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Practical Question About Travel Insurance

I have a trip planned for late May- early June. It is insured through Travelguard/AIG with the “cancel for any reason” option. As of this moment, my trip has not been affected by any travel bans, cancellations, etc. However, it could obviously at some point within the near future be affected. Any thoughts from the group on the possibility of Travelguard/AIG being overwhelmed by claims and potentially going bankrupt before I might need to make a claim?

Posted by
16581 posts

I wonder how many people buy "cancel for any reason" insurance? And what's the likelihood that you won't be able to recover most of your expenditures via refunds from airlines, tour companies, etc.? I don't know that the insurance companies' payouts are going to be all that high. With few people in the short term traveling, I assume there aren't many new policies being sold right now (that's bad for the travel-insurance companies). But what we've been through may well cause more people to buy insurance in the future (that's good for the travel-insurance companies).

I really don't know anything about the insurance business; I'm just musing here.

Posted by
4855 posts

I would think that one consequence will be future policy rates going through the roof. AIG is a big company that got a bail-out during the last financial crisis; could be one in the near future to prop up airlines, etc. All just endless speculation.

Posted by
20565 posts

Agree with Stan. AIG going bankrupt is pretty low on the list of things to worry about it. I would be more worried about the "cancel for any reason" is truly cancel for any reason since many "cancel for any reason" policies have exclusions. Find your fine print and read it carefully.

Posted by
4669 posts

You have to read very carefully. My own most common choice, Travelex, has clauses like coverage only for of "Unforseen" events. Later on, it's defined: "“Unforeseen” means not anticipated or expected and occurring after the effective date of coverage." They also exclude "(d) any government regulation or prohibition;" and "(f) failure of any tour operator, Common Carrier, person or agency to provide the bargained-for travel arrangements or to refund money due the Insured;"

I was surprised to find that their Accidental Death and Dismemberment (which my late mother in law thought was a necessity for any airplane flight) excludes "(b) stroke or cerebrovascular accident or event; cardiovascular accident or event; myocardial infarction or heart attack; coronary thrombosis; aneurysm;"

And I thought this was a decent policy all these years!

Another thread here mentions exclusion based on a "Known Event.".

Posted by
230 posts

I also buy Travelguard. I found them very helpful in the one time I needed to cancel a trip.

As for “cancel for any reason,” my understanding is you only get half your money back, whereas if you cancel for cause, you get it all back. I’d wait before canceling, you will possibly get more money. I don’t think this would cause AIG to go under, it’s such a small part of their business.

Posted by
16581 posts

Some cancel-for-any-reason policies allow the policyholder to recover 75% of allowed expenses, but the details as laid out in the policy must be examined carefully.

Posted by
100 posts

Is there a likely hood an insurance company would allow me to transfer my insurance to a future date now that the EU is on lock down?

Posted by
16581 posts

At least one poster on this forum has reported being allowed to do that. I have no idea whether that will be a common response by the insurance companies. Take a look at the full text of the policy; that subject may be addressed therein.

Posted by
189 posts

Can someone tell me if I've been buying the wrong kind of travel insurance? I always buy what the airlines offer when I book my flights, usually on United, which I believe is Allianze. I just checked my Norwegian Air tickets for June 3rd SFO to Barcelona and it lists 'cancellation protection' for a mere $24 which is what I opted to buy. Is Travelguard something that I would purchase in addition to what the airlines offer on their sites? Thank you.

Posted by
20565 posts

It is either or, not both. And always read the fine print. The trouble with airline travel insurance is that it can be very restrictive. For example, We purchased two separate tickets for a flight to Europe and then a continuing flight with a delay of about four hours between flights. I did buy insurance for the second ticket for the issuing airline without paying a lot of attention. I figured I was covered if my first flight was delayed and missed the second ticketed flight. Unfortunately my original international flight was cancelled so I arrived two days later. Second, as sort of a cancellation prize, the rebooking of the international flight was directly to my original destination so I didn't need the second ticket. So I applied for a refund of the second ticket to only to learn that "their insurance" only provided a full credit to be applied to any flight within the next year and that flight had to be book at the time I received the credit. So I lost both the ticket and the insurance premium. The terms of the insurance policy are critical.

Posted by
52 posts

Not worried. They only pay 50% for cancel for any reason.

Posted by
20565 posts

Ray -- that is not true. It depends on the policy's fine print. Some will pay 100% of actually losses.

Posted by
2656 posts

Is there a likelihood an insurance company would allow me to transfer my insurance to a future date now that the EU is on lock down

This isn't a big deal because if your trip is canceled and refunded, you should get a refund of the insurance premium anyway.