Did Your Travel Insurance Cough Up When Required?

Whether to buy travel insurance for a dive trip is often a dilemma, first because insurance is expensive, typically around five to nine percent of the trip cost, depending upon your age. If you want to go with the "cancel for any reason option," it runs as high as 20 percent.

You have to weigh that cost against your current and potential health issues, the reliability of your flight, your resort or liveaboard, and the likely hood of bad weather when you travel.

Most divers self-insure and take their chances. If they are healthy, don't have a complicated trip with local airline connections, have left plenty of time to cover delays, and aren't traveling in hurricane season, they presume they'll never have a claim greater than the cost of their policy.

For those who decide to insure a trip, most want the best deal possible, and many, after only a cursory review of the coverage, spring for the best price. For the few who eventually file a claim, many will learn, to their dismay, as you will see in this story, that the small print excludes their problem and they aren't reimbursed.

After all, insurance companies are not beneficent uncles eager to make you financially whole shouldthings go wrong -- even if their advertising promises that. They are profit-making companies with policy language skewed in their favor.

So, what does that mean for a traveling diver? We surveyed our readers to see what problems they might have encountered with trip insurance and, as we learned, it's not uncommon for insurers to refuse what seems like the most clear-cut claim. Readers inundated us with stories -- some are salutary tales -- that may give you pause when you consider whether to insure your next dive trip.

Credit Card Insurance is Free

The first thing to realize is that you may have some trip insurance connected to the credit card you use to pay for your trip, especially if you use a gold or platinum card. The coverage varies, so before you rely on it, you must read the fine print.

When Ana Martin's (Olympia, WA) gear bag went missing last September on her way to the Solomon Islands, her credit card company came to her rescue. Her trip from Seattle involved flights first with Alaska Airlines, then Fiji Airways, and finally with Air Niugini. When her dive bag failed to arrive, she had to rent dive gear from her liveaboard, the MV Taka.

As it turns out, her dive gear had disappeared forever, so she sought restitution from Air Niugini, which refused, indicating they are not governed by the Montreal Convention that governs nearly all other airlines. Claiming no fault, they washed their hands of responsibility.

Martin told us that Fiji Airways made a goodwill restitution of $1600. The travel protection insurance she took out through Expedia ($107) only paid $700.

But, she had purchased her ticket with a Citibank Platinum card. "Within three weeks, (they needed a lot of paperwork), they paid their maximum benefit of $3000. A good reason to carry and use a Platinum card! Here restitution totaled $5300, just about enough to cover the cost of her gear.

(We might add here, don't overlook your homeowners' insurance if your equipment disappears along the way; many policies cover such personal losses.)

Ruth Lindner had to cancel a Fiji trip for medical reasons, and reimbursement from her DAN insurance fell $2000 short. "My Chase United credit card had trip insurance, so I used that for the balance." She later had to cancel a trip to the Caribbean and "it was all covered under the Chase United credit card insurance. The insurance has no extra charge."

Coverage, if any, differs between cards. Paul Molike (Dover, DE) used his Chase Preferred card to purchase business class tickets on Qatar Airlines to Denpasar, Bali, where he was to pick up the Wakatobi's twice-a-week flight to the resort. "Unfortunately, my first flight left late, so I missed my connecting flight in Qatar, which made me miss my flight to Wakatobi (he had planned a 10-hour layover in Bali). I had to stay in Bali three nights."

When he returned, he contacted both Chase and Qatar Airlines. Qatar said the delay was due to a combination of operational and technical reasons or aircraft defects, and Chase, too, declined his claim.

One might expect that planning to arrive 10 hours before a connecting flight should be enough; however, if you are hooking up with flights that don't fly daily, 24 hours seems like the minimum. Any glitch will put you out of luck, and you'll miss part of your dive trip. And, too often there will be no insurance reimbursement.

Insurance and Missed Connections

When Air Traffic Control at JFK delayed his flight departure, Dale Cowan, M.D. (Brecksville, OH) subsequently missed his connection to Italy. His insurance company rejected his claim for his prepaid expenses. He says if "flight is canceled for any reason other than severe weather (defined as a storm that closes an airport), a claim will be denied. Pay the extra amount to cover instances where cancelation is due to carrier decisions, in addition, of course, to illness or death."

Doug Peterson (Elk Grove, IL) had the same outcome after his overnight flight was canceled and he couldn't leave until the next day. He requested reimbursement for missing the first night of his hotel stay, but the small print of his travel policy stated they did not cover delays caused by plane maintenance problems.

Tim Barden (Salem, MA) booked his Micronesian trip through United Airlines and added a travel policy from Global Allianz, figuring the company "would have been pre-vetted by UAL." After he dived Chuuk, he was headed for a prepaid stay at Manta Ray Bay, Yap, which required him to change planes in Guam. United canceled his flight from Guam because of mechanical problems, and their next flight wasn't for another four days. "With great regret, I cut my vacation short and returned to the U.S."

United eventually compensated him for the unused parts of his original ticket, plus some, and even paid for the extra days at the Blue Lagoon in Chuuk. However, Global Alliance refused to reimburse him for his prepaid stay. He says "Qualifying causes for paying claims include a host of unlikely events, possibly even an attack of killer zombies from space, but not 'mechanical problems' or several other issues, all much more likely to occur than most of the allowed causes."

Again, dive itineraries to remote areas reached by flights that only go a couple of times a week leave you at the mercy of the airlines, and unless you have read your trip insurance policy carefully, at the mercy of your insurer.

Buy Enough to Cover All the Costs

Insurance companies generally require you to buy a policy that covers the full cost of the trip, and that is tricky, as Bob Speir (Falls Church, VA) learned when he had to reschedule a trip to the Galapagos after Buddy Dive lost its liveaboard license there. He was lucky to rebook similar dates on the Galapagos Sky, for which he only had to extend the return portion of the ticket by a single day. Speir, who had paid $500 for $10,000 of coverage, expected it to cover the $400 for the additional hotel and airline fees.

"I received a call from the insurer's claims agent, who quizzed me on all the costs I had incurred, not just the extra ones I had documented. When my estimate reached about $10,700, he said he had all he needed. A few days later, I received a letter denying my claim. Even though the policy says that in the event of a trip cancellation by the provider, my coverage would pay up to the lesser of the trip cost or my purchased coverage ($10,000), there was a little sentence in the middle of the policy that said, "You must have covered the entire cost of the Covered Trip including the air fare."

"I found later that many travel policies are written this way. The claims agents are adept at coming up with cost totals that exceed the purchased coverage. They demand receipts for expenses that are not normally documented (e.g., food and drink paid for in cash, tips, etc.) and reject claims when full documentation cannot be provided."

Insurance Claims Are Rarely Straightforward

There's often an absurd catch. Back in 2005, a hurricane led to American Airlines canceling Yvonne Lanelli's (Alto, NM) flight to Grand Cayman, where she was connecting to Cayman Brac. Her trip insurance reimbursed her airfare, but would not cover her prepaid resort, reasoning that resort had stayed open and had offered to extend her reservation for a year. "How I would get to the open resort on a canceled flight was immaterial."

After Don Bloch (Chino Hills, CA) broke his wrist in a freak accident in Roatan, he was unable to make contact with Dive Assure, so he paid for X-rays and the Honduran physician to stabilize his wrist. Rather than get the necessary surgery in Honduras and risk that it might not be up to snuff, he returned to California to have the work done. Guess what? The policy states: "Benefits are applicable when you are outside your country of permanent residence." Dive Assure refused to cover his surgery.

John Crossley (Panama City Beach, FL) accidentally swallowed seawater while diving in the Lembeh Strait (muck divers know how much trash is on the bottom), resulting in severe vomiting and diarrhea. He was too ill to drive to the nearest doctor in Manado, so he contacted his DAN-sponsored travel insurance company, but they would not accept a written statement from the dive instructor and insisted he travel to the doctor. Unable to do so, they refused his claim for three diving days he missed but had prepaid.

Doug Franquemont (Colorado Springs, CO) purchased travel insurance for a dive trip to CoCoView, Roatan, and before he departed his son had an acute psychotic illness requiring hospitalization, causing him to cancel the trip. One expects family emergencies to be covered, but the policy excluded mental illness. "I felt betrayed by the fine print, and when I consider travel insurance, I read the paragraph of exclusions and see myriad ways for the company not to pay. So I have never again purchased travel insurance."

Roger Hale (Topsfield, MA) had to cancel a Caribbean trip after being diagnosed with skin cancer that needed immediate treatment. His doctor had removed a small spot on his head, never suggesting that it was cancerous. He took out his trip policy, then learned the spot was cancerous. Travel Guard (AIG) claimed it was a pre-existing condition even though it had not been diagnosed when he took out the policy. Hale got them to change their minds after he contacted the Massachusetts Attorney General's office, which interceded on his behalf.

However, there is a cautionary note here. Take out your policy as close as you can to the date you make your first trip payment.

Insurance companies can be quite heartless. Penelope Cooper (El Paso, TX) wrote to Undercurrent to tell the sad story of a couple of divers in her group who had booked to go to Palau.

The husband had committed suicide a few days before their departure. Although the company's policy, which they got through DAN, did not cover suicide, "you would think that his wife would be covered due to unforeseen circumstances. . . .Today, DAN has a different insurance provider."

It's Not Always Bad!

It's not all bad, of course. Jeff Falk (New York, NY) told us he always buys top-quality travel insurance. "In the past two years, I had to cancel three dive trips due to unforeseen medical issues. In each situation, the cancelation was within two months, and I used Travel Guard, which was wonderful. I was able to do everything online and never had a problem. Travel Guard is part of AIG Insurance -- a bit more costly, but well worth it."

Kathy Teller (East Quogue, NY) had booked a trip from JFK to Grenada on American Airlines. After her flight from Miami was canceled due to a hurricane, she says, "I put in a claim for a canceled flight. I only expected the one flight to be covered because I changed the others and used them. I was pleasantly surprised to receive a check covering the entire trip."

Hurricane Harvey disrupted Mark Leiserowitz's (Houston, TX) return trip from Hawaii to Houston, and he incurred $900 in hotel costs and meals, which his credit card insurance, Chase United, covered in full.

You Make a Choice When You Pay Your Money

So what to do before you buy insurance? Visit an insurance comparison website like squaremouth.com, quoteright.com, or insuremytrip.com, enter the precise details of the coverage you seek, then examine the exclusions in the sections that concern you. Don't be tempted to underinsure, keep all your documentation, and during your trip, collect receipts for every single expense incurred.

That said, many experienced travelers never buy trip insurance and consider themselves well ahead of the game. Longtime Undercurrent subscriber Randy Preissig (San Antonio, TX) says sticking with his basic DAN Dive Accident Insurance is all he needs. "Of course, this is essentially 'catastrophic coverage' -- but isn't that what you need to protect against? I have never bought regular trip travel insurance for a simple reason: I've never had to cancel a trip. I've thus saved eight percent of the cost of each trip and now enough to pay for four or more trips. If you are healthy and a moderately experienced traveler, I recommend this course. The approximately $1000-per-person-per-trip savings will more than pay for most of the losses you are likely to encounter (if you ever do!), and the savings will fund a self-insurance 'kitty' for future trips."

- Ben Davison