View Full Version : Buying travel insurance-Elliott's June 9 column
06-11-2005, 11:43 AM
In a recent column Chris Elliott wrote that a traveller who lost her luggage on o cruise "could have â€“ and should have â€“ bought your own travel insurance, which would have covered your loss."
I've always felt that one should insure against catastrophes. If one can afford to deal with the loss on your own, then one should self-insure.
I'm curious to know how many people do take out travel insurance?. Also, does anyone know what portion of travel insurance premiums are paid back in the form of claims and what portion goes towards commissions, expenses, and profits of the insurance company?
06-11-2005, 12:06 PM
A relatively small percentage of my clients purchase additional travel insurance. Most have the "it will never happen to me" attitude. Of course, they are right and it usually does not happen but when it does--sheesh.
I would say that 15% of my Mexico and Caribbean clients purchase the additional insurance, 30% of my European or other destinations, and 25% of my cruisers.
We are aware of maybe 4 claims per year so that does bear out the "it won't happen to me" theory.
In the lugage column, who would have thought of that. And that is where the insurance in invaluable. It is just not if you cannot make it or get sick. What if a kid at home becomes ill, or a relative dies just before you are set to go. There are a zillion things that can happen and for the relatively small premium, you are covered.
Here are two links to a few columns that I did on travel insurance as well as keeping healthy while on the go:
06-11-2005, 01:53 PM
However, would travel insurance have covered this?
This seems more like negligence on the part of the cruiseline, than "something unexpected" happening.
06-11-2005, 02:25 PM
I suspect that they would as most policies include a damage and delay clause for luggage. Typical policies reimburse up to $250 for delay (which this was) and up to $1500 per bag that never makes it.
Now I am sure the insurer would subrogate against Princess and the ground handling company, but that is not the client's problem.
For our family travel, I only take the trip insurance if it's a major trip and a need to cancel would be terrible. Fortunately, the two times I've needed to use it - one trip to Ireland with a group of 5 family members - I ended up in the hospital instead of in Dublin and another planned cruise for 3 when an uncle died - the insurance covered just about all the expenses.
If it's just a flight and hotel for one or two people, I don't bother with the insurance. Hotels can be canceled and airline tickets can be changed (for a fee)
06-13-2005, 08:23 AM
But don't forget that cancellation insurance also includes interruption of your trip. Should you have to come home early, or should you have to extend your stay for a valid reason, then the insurance will pay for the associated costs.
I had a client booked on a Princess cruise when the ship was quarantined with the Norwalk virus. They brought the ship back to port early, told folks they'd be getting a refund of the non-cruised days, and that was it. For passengers who had booked their airfare through the cruise line, Princess was taking care of making arrangements to get them home. My client thought Princess's price for the air was too steep, so we booked it separately. Because she had cancellation insurance she was able to get her new flights etc paid for by the insurance company.
On the other hand, I have a friend who booked a trip to the Southern US (we're in Canada) for 3 weeks on her own (not through a travel agent). She goes every year, she stays with relatives, and she "knew" she was going, so she didn't even think of purchasing travel insurance. Within a few days of her arrival, her mother back at home passed away. The cost of arranging a last-minute (or even within a few days) transborder flight home was outrageous and the airlines "bereavement" policy was laughable. She couldn't afford the price of getting her ticket changed, and as a result she stayed at her destination for the whole 3 weeks and missed her mother's funeral.
Whever I sell any kind of travel package I always include information on travel insurance. In fact I include a waiver form that clients who elect not to take travel insurance must sign. Life is uncertain, and it's not just events that happen BEFORE you leave that can have a significant impact on your trip.
06-13-2005, 08:58 AM
In fact I include a waiver form that clients who elect not to take travel insurance must sign.
Asking for the "waiver" is usually what gets clients to stop and think about why insurance is important. I would say that I only have 3-4 people a year who opt to not take insurance. Really now, what's a 3.5% insurance charge to protect a big investment? (I used $189 worth of insurance on a $6k trip - and when you think about it, 6.3% on a $3k trip - big deal...at least you're protected.)
06-13-2005, 09:07 AM
All you really need is a remarks line that's programmed into your basic PNR profile that says "I accept____decline____travel protection insurance as recommended by (your agency name.) Have it printed on the bottom of all your invoice/itineraries. Then get them to check one and initial it. At the very least, it plants the seed and gets you off the hook for those who decline, then try to come back on the agency when things go wrong with the excuse that they were never offered any insurance.
I never use high-pressure techniques, but it's my duty to make insurance available to all customers. As DC said, many do not think of it. If they have questions about my opinion of travel insurance, I can provide them with many reasons why its a good idea. But ultimately, it's their decision. :wink:
06-13-2005, 09:13 AM
You know, the usual objection I get to Travel Insurance is "I have medical insurance and Homeowner's to cover lost items. Why would I need more?"
Trip interuption, cancellation, medical evacuation ....
06-13-2005, 09:28 AM
medical evacuation ....
That's a VERY good example. If you become seriously injured or ill outside the country, your own insurance company is not going to pay for a medi-vac private plane to get you home, and that can run into the tens of thousands of dollars. After all, who wants to spend a month in a hosptial in Central America for example? I've had clients have to use this option a couple of times.
The biggest mistake is simply thinking you are covering just the cost of your vacation. There's so many things that can happen which would result in emergency expenses even ten-fold the price you paid for your trip.
06-13-2005, 09:47 AM
So very true. I had a client that was in a car accident while in Baja. The cost of an air ambulance was terrible. You never know what can happen. Before or during your trip....
Travel insurance is one of the most important components of a travel package.
06-13-2005, 04:02 PM
Travel Insurance would have covered the deal. We find people are buying more insurance now then in the past. I had a client who had a orthopedic insert in her gym shoe. She went swimming and when she came back to go back to the ship, her shoes were gone. The cost of the orthopedic insert was about $900.00. She was very glad to have purchased insurance which covered the loss when she got home.
Theft protection is just one important part of travel insurance, as mentioned already, emergency return travel, emergecy medical assist..It's all important.
True homeowners insurance might cover some, do you really want to jump your homeowers insurance for a travel claim? You know it will go up well more than the cost of a one time travel policy.
The interruption, evacuation and repatriation of remains is so often overlooked, but is so expensive. We just had a client hospitalized in Aruba in March, he did NOT have insurance. The medi-vac cost him $27,000, fortunately he could afford it. But over the 30 years I've been doing this I've evacuated a woman from China (A & K Around the World by Private Jet).....TWICE.....same woman, brought 2 bodies home from Kenya, one from Hawaii, evacuated from the Panama Canal via helicopter and at least 3 or 4 more that I can't remember right now. It CAN happen and all too often it DOES.
06-15-2005, 11:33 AM
I always advise the insurance. If someone has an elderly parent they usually buy the insurance without too much thought. It is the one's who don't expect anything to ever happen that sometimes need persuading. I've seen the insurance help someone who needed it and I've also seen someone lose several thousand dollars because they did not purchase the insurance. I like the idea of having clients sign the insurance waiver if they refuse to purchase it. I print out that insurance was declined on the date they declined it.
06-15-2005, 10:33 PM
this is the first year that all my clients have bought trip insurance. One because there's an elderly mother who is frail, another because their are some other relatives who are sick. AND they asked me before I had a chance to mention it.
It's not just covering the traveler who might get sick the day before or the morning of deparature anymore. Something could happen to relatives, lost baggage, almost anything.
I had a client one year who's mother had breast cancer. He and family flew to europe. He'd only been there a day when she passed away. The airline made him wait 3 days before they'd let him come home. Had they had the insurance they could have come home right away.
06-16-2005, 02:21 PM
So true. Or the client that purchases a ski package for Christmas week and says "we will take this trip no matter what, don't need insurance"....his father has a heart attack and dies three days before the trip. Guess what they cancelled....then he threated to sue because there was no refund on the land portion of the trip, the airlines let him use tickets for future travel. Thank goodness, I had his signature declining the insurance! Of course he was an attorney!