Recently, we’ve noticed a number of complaints from travelers who purchased their travel insurance from travel suppliers – online booking engines, in particular – and this is an easy trap to fall into.

While we didn’t look into the specifics of those policies, we can tell you it’s not a good idea to purchase travel insurance this way for a number of reasons:

1. a traveler in a hurry may not read the policy details (even though they are made available) because this is a last step add-on to the buying process
2. the language used to sell the policy may have you believe you have coverage (for any injury or illness for example), but you have to understand the exclusions and limits (those are in the plan’s description of coverage)
3. it’s likely that only a very limited set of travel insurance plans will be offered to you
4. it’s not likely that you’ll have access to potentially necessary upgrades (like a medical upgrade for a pre-existing condition)

A much better way to make an informed travel insurance purchase is to do your research and purchase a plan using a travel insurance comparison tool, which lets you compare coverage and prices using your itinerary details and lets you review the policy details, so you understand your coverage.

We were recently asked whether trip cancellation coverage provides reimbursement if an airline cancelled flights due to a hurricane and then subsequently ran out of seats?

Unfortunately, it does not. Travel insurance plans typically include language like this (from Travel Guard’s Platinum plan description of coverage):

“Benefits will not be provided for any loss resulting (in whole or in part) from:
(a) travel arrangements canceled by an airline, cruise line, or tour operator”

Which makes sense, if you think about the fact that the travel insurance company wants to limit their losses as well.

To answer the question, the airline canceled their flights due to severe weather, so their responsibilities are limited to getting you on the next available flight. If the flight is a day or more later, the carrier may provide accommodations or meal vouchers, but it’s entirely voluntary. If that airline has no seats for you on later flights, it is again a problem with the airline and you are subject to the rules governing air travel.

While it may not seem fair, those are the laws and rules.

When travel insurance coverage would kick in

• When severe weather causes all services to stop for a minimum number of hours (usually 24), but remember that travel insurance only provides reimbursement for non refundable losses. So, if your airline has to cancel flights, but they give you a full price voucher for future travel, you won’t be able to make a claim for the flight cancellation because that would, in essence, be double repayment because you received compensation from the airline.
• When a labor or union strike prevents you from taking your trip. The strike must be unannounced when you make your policy purchase and there is a minimum number of hours (usually 12-24) that services must be stopped before coverage applies.

If the airline bumps a passenger due to overselling, there are new passenger compensation rules to cover that situation.

For more information, see What the airlines owe you when a Missed Connection occurs.

One of the messages we hear a lot from travelers and even travel experts is that you can get the same level of travel insurance protections with your credit card. We even see money experts reminding credit card holders not to waste their travel insurance benefits.

So, we decided to do the research and really understand what credit cards provide in the way of travel insurance protection and how those protections stack up against travel insurance.

Trip cancellation with your credit card

We recently had a complaint that civil unrest wasn’t covered by their travel insurance plan and the customer noted they would simply rely on their credit card travel insurance in the future instead.

Be careful! No credit card will cover cancellation for civil unrest (and some travel insurance plans do – you just have to read the plan details).

The only events that qualify for trip cancellation with your credit card are sickness or death of you, a traveling companion or family member, so the person posting a complaint would not have had the protection they thought they had. Plus the credit card companies are very particular about who qualifies as an immediate family member. Hint: in-laws, grandparents, step kids, aunts, uncles, and others do not usually qualify.

Maximum trip cost limits with your credit card

Some trip cancellation coverage may be included with your credit card travel protections, but there are limits on the maximum trip costs. For example, the Sapphire^SM card from Chase limits benefits to $1,500 for any 12-month period. That’s not gonna work if you have a family of four and you have to cancel a 4-person cruise in the Bahamas to care for an ailing parent.

Compare those maximum trip cost limits with the much higher limits provided by travel insurance and you can see that this is where travel insurance is definitely the better bet, provided you understand and adhere to the covered reasons for trip cancellations with your chosen plan.

Let’s compare travel insurance plans with your credit card

Let’s say there are two travelers headed to New Orleans in October (that’s hurricane season) for a 5-night vacation. They are U.S. citizens, 45 and 47 years old with health insurance back home. Their non refundable trip costs amount to $2,800.

When we plug these trip details into our travel insurance comparison tool, we found several plans:

Vacation Basic from TravelSafe for $110 with:

• 100% Trip cancellation and interruption up to $10,000
• Medical evacuation up to $100,000
• Secondary medical up to $35,000
• $100 per day (up to $500) for travel delays
• $100 for baggage delay (per person)
• $500 for lost baggage

Trip Protector Lite from Travel Insured for $114 with:

• 100% trip cancellation up to $50,000
• 150% trip interruption
• Medical evacuation up to $100,000
• Secondary medical up to $10,000
• $100 per day (up to $500) for travel delays
• $200 for baggage delay (per person)
• $750 for lost baggage

RoundTrip from Seven Corners for $115.00 with:

• 100% trip cancellation up to $20,000
• 150% trip interruption
• Medical evacuation up to $350,000
• Secondary medical up to $75,000
• $150 per day (up to $500) for travel delays
• $200 for baggage delay (per person)
• $1,000 for lost baggage

Recently the Food and Agriculture Organization of the United Nations released an article titled Bird Flu rears its head again and we’re all reminded that flu season is just around the corner.

While 2008 marked the beginning of geographic expansion of the H5N1 virus in both farm-raised poultry and wild birds, the current advance appears to be associated with migratory bird movements which result in the spread of the virus to domesticated birds. The following countries are noted as having H5N1 firmly entrenched: Bangladesh, China, Egypt, India, Indonesia and Vietnam.

The World Health Organization’s Avian Influenza Fact Sheet indicates two causes for concern of which travelers need to be aware:

1. Of all flu viruses that circulate in birds, the H5N1 presents the greatest danger to humans having caused the greatest number of deaths.
2. If given enough opportunity, the H5N1 will develop the defenses necessary to survive and it has the potential to start another influenza pandemic.

So far, this particular virus is missing the ability to spread efficiently and sustainably which is why a pandemic has not yet occurred.

When traveling in areas where bird flu is common, travelers can protect themselves by avoiding contact with domestic and wild birds because extensive studies of human cases indicate that direct contact with infected poultry was the cause of the infection.

That means staying away from markets where live poultry are kept or butchered. That means staying away from rural and suburban areas with poultry.

Thorough hand washing and flu vaccines are also recommended courses of action.

Travel insurance trip cancellation coverage provides reimbursement for the pre-paid non refundable trip costs included in your itinerary less any refunds you receive from travel suppliers.

If you cancel a portion of your trip or your entire trip for a covered reason, you won’t encounter this situation. You’ll simply make your claim and receive a refund as long as the cancellation was covered by your policy rules.

If a portion of your trip or your entire trip is cancelled by a travel supplier, say a tour operator, an airline, a cruise line, for example, then it’s their responsibility to provide compensation to you. In the case of most travel suppliers – airlines and cruise lines in particular – this compensation is in the form of future travel vouchers and sometimes this doesn’t appeal to the traveler who may feel they have a right to receive cash reimbursement instead. Unfortunately, if a travel supplier’s compensation doesn’t appeal to you, you’ll have to take it up with the travel supplier because they’re the ones responsible in this situation.

You can think about it this way: if a travel insurance company provided reimbursement for cancellations where the insured also received future travel compensation from the travel supplier, then the insured would essentially be doubly compensated.

Similarly, you wouldn’t expect to be doubly compensated for a car accident by both your own automobile insurance and the other participant’s automobile insurance. As long as the car is repaired or replaced, that’s all that is expected. Travel insurance companies, just like any other insurance provider, have the right to limit their liability and this is one of the ways they do that.