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Help please with travel insurance denial - a little long

After getting my tour money stolen by the travel agent, thus not being able to participate in this summer's Trail of Lippizaners Tour (see my "Scammed" thread for more info), AIG/Travelguard is now denying my claim and my appeal. If anyone has experience with this and can offer suggestions I would appreciate it. I don't know if my next step is having my attorney get involved (paying him to get back $5000 may not be so bad, better than nothing) or going to a local TV station consumer advocate. Dealing directly with the travel agent has been exhausted and "stolen" should give you a drift of what's going on. Is arbitration an option with an insurance company? I am not an attorney so all the contradictory legalese has me baffled.

I took out a Gold policy, at the time thinking of sickness and injury, never imagining theft. As their denial AIG is quoting the following clause in Section IV (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."

However, at the start of that section the policy reads "The following exclusions also apply to Trip Cancellation and Trip Interruption: Unless otherwise provided by this plan Benefits will not be provided for any loss resulting (in whole or in part) from..."

Schedule of Benefits states "Extra Coverage (when the insurance plan is purchased within 15 days of Initial Trip Payment) • Trip Cancellation/Interruption due to Financial Default". On the declaration page, it states "DEFAULT/BANKRUPTCY 100% Trip Cost Per Insured". Section II (b) states "Financial Default of an airline, Cruise line or tour operator provided the Financial Default occurs more than 14 days following an Insured's effective date for the Trip Cancellation or Trip Interruption Benefits. There is no coverage for the Financial Default of any person, organization, agency, or firm from whom the Insured purchased travel arrangements supplied by others. This coverage applies only if insurance was purchased within 15 days of Initial Trip Payment;" The key is the 15 day clause. Travel insurance was purchased the day after the tour was paid for.

There is no clause for theft. When I filed my claim, it was treated as financial default. I didn't know how deep the agent's deception went at that time. More and more has come to light in recent months.
As always, thanks to everyone in advance for your help. I just want my money back so in this lifetime I can go back to Europe.

Posted by
10323 posts

You probably need to have an attorney read your policy and the denial letters to tell you if you have grounds to pursue the matter, or if it is really a situation where the policy does not cover what happened to you.

It sounds like the scoundrel that took your money is judgement proof ( has no assets to sue for).

You may want to make an inquiry with your state insurance commissioner office, to see if they can provide any help before you involve an attorney.

Your state's attorney general may be able to prosecute the bad actor, but that probably will not help you get your money.

Unless someone on the forum is an attorney, all the responses you are likely to get will be speculative and worth what you paid for them.
Sorry to hear is all went so badly for you.

Posted by
4315 posts

Sorry you hit a brick wall with the trip insurance, but it can't have come as a big surprise. The insurance specifically excludes default by a travel agent, as opposed to a tour operator. They don't care why the default occurred (in your case theft, or misappropriation if funds). All they care about is that it was a travel agent. Likely the only way you could have collected from trip insurance is if it was a "cancel for any reason" policy.

Posted by
3012 posts

It's time to hire an attorney with expertise in consumer fraud plus insurance law, and let him/her approach the media.

Good luck!

Posted by
2081 posts

Am I reading your post correctly that the following sentence appears in your policy?

"There is no coverage for the Financial Default of any person, organization, agency, or firm from whom the Insured purchased travel arrangements supplied by others. "

If so, you may have no grounds for a travel insurance claim, but I am NOT an attorney.

If that language is in your policy and if the agent stole your money (especially if the agent is still otherwise in business), sounds like it is a criminal issue and not a travel insurance policy issue, and possibly not even a financial default issue (maybe just a fraud issue).

I guess the key takeaway is to be sure to deal directly with tour operators and not with agents or individuals for whom you do know have verification of E&O type insurance or financial default insurance. If I understand correctly, the travel agent you used is NOT the tour operator?

Soooo very sorry you are having to deal with this. Who is the travel agent, and how did you find him? Is the first time you have dealt with him? Is he having financial issues?

Did you use a credit card for your payment so that you can file a dispute of the charge with your credit card provider?..........If so, THAT would likely be the easiest route for you. They would charge the funds back against the travel agent, and you would not be responsible for the funds until the dispute is settled (if it is determined that you are not due the funds). But, if everything was buttoned up, and you met your end of the bargain, but the paid-for tour was not provided, then seems it would be easy to win the credit card charge dispute. If you paid in cash/check, then yipes.

I would be very hesitant to deal with any travel agent or provider who does not accept credit cards. I realize Rick Steves' organization used to not accept credit cards for all aspects of tour payments, and I accepted that at the time.

Posted by
9727 posts

Maggie—click on horsewoofie’s previous threads and you’ll get all the info you asked, and more. It’s a horrible, very complicated case and a learning experience for everyone.

Posted by
7038 posts

Do you have a link to the entire policy? That would be helpful.
Another thing you may consider is working out a payment plan with her (that she can agree to via a contract between the two of you) if she cannot reimburse the entire amount at once. It's not fair, it's not right, but it's better than getting no money back at all.

Posted by
5927 posts

Kathy, I'd go for the attorney. He or she will be able to parse the contract to your benefit, or, if not, explain to you why you do or don't have a case. Go for it. You've had a rough year; it would be worth an hour's consultation fee to find some relief.

Posted by
2081 posts

Bets (and Horsewoofie, too)
I did as Bets suggested and just read the previous thread that Horsewoofie posted). Oh, jeez....what a true mess of a situation. I should delete my (what I thought might be helpful) post on this particular thread, though, because all that I said and suggested had already been said/suggested (unbeknowns to me) on the earlier thread.

Horsewoofie, I am again so sorry you are experiencing this. Vacations are supposed to provide enjoyment, but sounds like this experience has caused nothing but stress. I'm glad you have the police involved, and I hope that you ultimately get some sort of financial resolution.

An attorney consult is likely the next logical step. And, sounds like to me, this situation is outside the realm of trip insurance (which does not appear to cover fraud of a third-party booking agent).

Keep us all posted. Bets, thank you again for helping to fill in the backstory.

Best wishes! You are kind to share your story so others can learn and be warned.

Posted by
4053 posts

If memory serves correctly, you are in one state and the agent is in another, so there may (or may not) be some jurisdictional questions. It appears to me that a consultation with an attorney well versed in consumer insurance law is in order. Yes, it will cost some money, but that will be the only way to get a straight answer with regard to where your stand and what your options are at this point. If nothing gets your money back, see if you can seek criminal prosecution -- I'm not an attorney so I don't know if you can or not. I do know that a guy in Georgia did a very similar thing and was rewarded with an all expense paid stay at one our penal resorts under the "theft by conversion" law.

Addendum: Horsewoofie, please keep us updated on how things progress.

Posted by
2916 posts

I've been an attorney for 40 years, but reading insurance policies still gives me a headache. Yes, you might want to consult an attorney to review the insurance policy and tell you your options. It may be that the exclusion you quote nixes any coverage, but the attorney should be able to give you an answer.
I've read some of your other post, but I'm not clear as to whether the travel agency has folded, or just that the one agent has stolen your money but the agency is still in business. In any event, if you paid for the trip with a credit card, the easiest solution would be to charge back the charge with your cc company based on the failure of the travel agency to provide what you paid for.

Posted by
24877 posts

From info in an earlier thread, and for the benefit of new readers: The payment was not made with a credit card.

Posted by
16893 posts

Based on what you posted here, I read the insurance specifications the same way that Maggie did. The key to their denial is probably not the 15-day clause, which you say you satisfied.

Covers "Financial Default of an airline, Cruise line or tour operator," would apply in this case to tour operator Austria Travel Direct, who we understand did not default.

"There is no coverage for the Financial Default of any person, organization, agency, or firm from whom the Insured purchased travel arrangements supplied by others." This would be Mythic Travel agency, not covered.

I think you have to keep pursuing the person who actually took your money.

Posted by
648 posts

I'm so sorry, but reading your previous post it seems to me that the takeaway is never pay a travel agent or anyone else with a bank transfer. But that's water under the bridge. If the travel agency did not pay the insurance company and the insurance company did not send you a policy, forget the insurance. If they sent you confirmation but not notice that the premium wasn't paid, then they are worth pursuing.

Be careful when hiring an attorney. A judgment does not equal money unless the travel agency actually has some and can be found. The attorney fees do not necessarily depend on collecting the judgment. An attorney who will work for a % of the money actually collected would save you from throwing good money after bad. If no attorney will take your case on that basis it's probably because there is no money to be collected.

Local consumer advocate programs will get you a voice and even cash if the travel agency is still in business. If they aren't still in business reporting will get you emotional satisfaction and not much else.

Posted by
362 posts

Doesn't one of the big travel magazines also have an ombudsmen column that deals with issues like this? Conde Nast, maybe? I'm not recommending it as a solution, but if pursuing legal channels with an attorney is cost prohibitive, it might be another avenue to explore in addition to any local consumer complaint offices/advocates.

Posted by
24877 posts

The difficulty here is that it appears this "travel agent" (perhaps self-designated) has very little income. I have a judgment from 20 years ago against a renter who owes me thousands of dollars. Unless she wins the lottery, I'll never see that money (and for all I know there's a statue of limitations on such judgments, anyway). I'm not aware of a good option when you're owed money by someone who is basically insolvent. I'd have jumped at the chance to hire a lawyer to chase after my renter on a contingency basis, but no such offer was forthcoming.

Posted by
5828 posts

I'm not an attorney. You will need to consult one who practices in your state or the state with jurisdiction over your AIG policy. However, that said, reading my AIG "Silver" policy for my past trip, it includes the excursion language that your cite:


The following exclusions also apply to Trip Cancellation and Trip
Interruption: Unless otherwise provided by this plan Benefits will
not be provided for any loss resulting (in whole or in part) from:

(f) failure of any tour operator, Common Carrier, person or agency to
provide the bargained-for

Your loss would appear to be a trip cancellation or interruption caused by a failure of an agency to provide the agreed upon service.

You should check the "State Exceptions" applicable to your state to see if the policy issued provides you protection.

A bottom line may be to ask yourself if the loss is significant enough to pay an attorney's retainer to ultimately confirm the policy exception cited by AIG.

Posted by
2916 posts

for all I know there's a statue of limitations on such judgments, anyway

As an aside, acraven, there may not be a statute of limitations in the usual sense, but the judgment may not be enforceable after X number of years if it's not renewed. 40 years ago, I and my roommates (all law students) got a judgement against our landlord for failure to return our security deposit. He refused to pay. Many years later, out of curiosity, I looked into whether I could pursue it, and found that I had to have renewed the judgment after a certain number of years for it to still be collectible.

As to the OP, now that I realize that he didn't pay with a credit card, and that the travel insurance doesn't seem to cover it, it doesn't look good. Putting pressure on by going through a consumer protection agency won't do much good if the person is essentially broke..

Posted by
2450 posts

I am also not an attorney, but having followed both threads, it sounds to me that this is a criminal case, some form of fraud. It may be complicated by the fact that you and the travel agency appear to be in different states. If your local District Attorney’s office has a consumer fraud unit, you might seek their input. At least they would probably not charge you for the conversation. Some years ago, I had an acquaintance who operated a small travel agency with a partner. Their business was in a financial bind, and in order to meet commitments, they ended up using some clients’ deposits or advance payments to pay for the commitments they had for operations and for earlier clients travel, already paid to them. I think clients’ payments were supposed to be held in a separate escrow account of some kind. These travel agency partners got into deep trouble, a trial, covered in the local newspapers, a conviction, and they stayed out of prison only in order to work (not as travel agents) to pay into a restitution fund for those clients who paid but then could not travel. (Note: in the case I cite, I do NOT think these travel agents were actually trying to steal money for themselves with evil intent, they were breaking the rules to avoid bankruptcy and to avoid letting clients down, and the cycle caught up with them.)

Posted by
369 posts

Christopher Elliott is a travel advocate who resolves many travel issues. Here is a link to his website:
How frustrating. Good luck.

Posted by
440 posts

How are you doing with this any update? Insurance will do anything to not pay out.