When Cruise West unexpectedly ended its World Cruise last fall and asked guests to leave the ship in Newfoundland, some insurers paid claims quickly, given the line’s failure to complete the voyage. But not all did, and because the line didn’t immediately state it was in default or filing for bankruptcy, most insurers waited before starting to pay claims for the line’s future cruises.
And when political turmoil broke out in North Africa this year, many insurers performed admirably to help clients whose vacations were interrupted get home. But when some clients with future bookings wanted to cancel and get their money back to book alternative vacations, they were told to stand by as the situation of civil unrest was under evaluation.
Of course, payment of any claim depends on the insurer and the specific policy details. If the colloquial phrase “God is in the details” applies anywhere, it’s to travel insurance.
“With insurance, there is no policy that covers everything; there are gray areas within most products,” acknowledges Michelle Fee, CEO and co-founder, Cruise Planners. “Insurance is one of those things that most customers don’t want to buy, but as agents, we know how important it is to sell. It’s always that one customer who doesn’t buy it that ends up needing it and, unfortunately, I’m sure every agent has some horror story to tell.”
Kathy Sudeikis, vice president of corporate relations, All About Travel, finds the Cruise West and Egypt situations troubling, “as those are exactly the types of coverage that clients want. Not being able to count on that coverage [in a timely manner] can slow down interest.” That said, she remains a big supporter of selling travel insurance.
So, what’s important about insurance? How should agents assist clients? What tips are helpful?
It’s critical to understand that insurance does not protect against fear unless the client has purchased “cancel for any reason” insurance. Trip interruption coverage pays for a list of specific reasons but not fear. Even with “cancel for any reason,” clients often must precisely fulfill certain conditions laid down by each insurer, such as canceling any air or prepaid arrangements as well as the insured trip at least 48 hours prior to travel.
In addition, insurance never covers everything. Otherwise, insurers wouldn’t be in business. Unfortunately, clients excited about their trip may just skim through a policy and not understand what they’re buying. Agents should stress to clients the importance of reading the policy and its fine print. Even one word in a policy can make a difference. So, our experts recommend directing clients to the insurer’s website or phone line for any clarification. Timing is important because if the policy doesn’t fit, many insurers will refund the premium without penalty even a week or so after purchase. And that still gives clients time to find a different plan.
This year, weather continues to cause problems for travelers worldwide, whether it’s a tornado in Joplin, MO, flooding in the Mississippi Valley, earthquake in Japan or volcano eruption in Iceland, says Dwain Wall, senior vice president and general manager, CruiseOne and Cruises Inc., “and soon, we’ll have hurricanes.”
Fortunately, some insurance firms, including TravelSafe Insurance, have hurricane warning coverage. But insurance coverage is based on “unforeseen” events. So if the client bought the right insurance before a specific volcano erupts or a hurricane is named, the insurer will likely pay for trip interruption or cancellation. But after the eruption or once the hurricane is a known event, only cancel-for-any-reason policies can help.
Other insurers may offer terrorism coverage, but generally with limitations, according to John Cook, president, QuoteWright.com. Insurers have told Travel Agent that terrorism—such as an attack on Americans in a shopping mall—is usually different from civil unrest. Again, clients who know the specifics of their coverage will benefit; those who don’t know what they bought may be disappointed.
Also good to know? While travel insurance provides for monetary compensation for unforeseen emergencies while traveling, travel assistance is support and assistance on the ground in the case of an emergency; the latter is not insurance. Many insurance programs are bundled and include travel assistance services. OnCall International has a helpful online explanation of the differences between insurance and assistance.
Travel waivers aren’t insurance; they are generally issued by suppliers as a future credit for a missed vacation. “Actually, some cruise lines don’t sell insurance, they sell cancellation protection, which means there is no coverage while traveling,” says Cruise Planners’ Fee. “Imagine tripping and breaking your foot in Europe. That’s ‘ouch’ in more ways than one if you don’t have insurance.”
“In difficult economic times, it is common for travelers to cut out the insurance element to their vacation to save money,” says Brad Anderson, co-president, Avoya Travel/American Express. “The more education and training an insurance company can provide to travel professionals about the products and services, and particularly on how to overcome customer objections to purchasing, will increase travel agents’ success in protecting their clients’ vacation investments and [preventing] possible additional losses and expenses.”
Isaac Cymrot, director of sales and industry relations, Travel Insured International, recommends agents pick one company to represent and one policy to sell: “You’ll feel more comfortable selling it, and be in a better position to answer your clients’ questions and make recommendations accordingly.”
CruiseOne and Cruises Inc.’s Wall emphasizes that while his agency groups provide initial and advanced insurance training, “travel agents are not insurance salespeople and insurance is a complex and complicated process.” His agents thus focus on why people should consider travel insurance, not so much the policy details. They often send clients to their insurer for that. Most importantly, he says agents must not misrepresent the coverage.
Many clients opt to purchase policies that include pre-existing medical condition coverage. CSA Travel Protection is one of many insurers with those plans, nearly all of which require the client to be medically able to travel when insurance is purchased. Nuances vary by insurer, so send the client to the insurer in advance to discuss eligibility and “what if” scenarios. Pre-existing conditions, and what’s covered and what’s not, remain a sticky point in the claims process.
Overall, insurance coverage is a balancing act that focuses on getting good coverage for the right price. Priced too high, the client can’t afford a policy and won’t buy it. Priced too low, they’ll get value but less coverage. U.S. Travel Insurance Association and individual insurer sites such as the Travelex site will help agents understand insurance, give consumer tips and compare plans. Several sites also compare and sell individual plans from different insurers.
Families, couples, singles, seniors and groups all have different needs; Travelex added a new family-friendly insurance program last year.
|Many insurers provide website updates on world events and their impact on insurance coverage.|
Elsewhere, “We have three plans of different richness-of-coverage levels and three different price points, so [agents] have diversity in what they can sell,” says Peter Wiesinger, Access America’s chief marketing officer. A basic plan may make sense for a younger couple just starting out with no kids and a lower income because “they don’t need all the bells and whistles,” but a family may need a different type of plan. “The agent should match the benefits and the pricing of a policy to demographics and type of travel,” says Wiesinger.
In May, Access America sizably enhanced its standard products. It eliminated agent processing fees, added primary emergency medical and dental coverage, added optional Cancel Anytime coverage, introduced coverage for airline frequent flier mile redeposit and change fees, and increased the payout limit for agent commission protection.
Agents typically sell bundled packages with multiple inclusions such as trip cancellation or interruption insurance, medical insurance and reimbursement for flight disruptions. Other more targeted options may include Travel Insured’s Pet Care Coverage, which reimburses additional pet boarding fees at a kennel when the client’s return is delayed due to a hospital in-patient treatment abroad, or Seven Corners’ medical insurance policies for clients traveling as missionaries.
With all the details, travel agents find it hard to keep on top of all the nuances. Many insurers provide website updates on world events and how those events impact coverage. Scott Ackerman, vice president of retail sales, Travel Guard, says his firm offers a complimentary 15-minute “Tips for Success” webinar update session at lunchtime every two weeks.
Timing-wise, insurers typically take one to two weeks, yet sometimes longer, to fully review documentation and make decisions on claims. While very satisfied with his firm’s insurer, Avoya Travel’s Brad Anderson says “it is important to customers that insurance companies continue to improve on process claims and reimbursements as quickly as possible.”
When putting in a claim, “patience is golden,” notes Ackerman, who also says many clients misperceive the level of coverage they have. “Don’t undersell,” several insurers recommended, because clients who submit claims are often upset their insurance doesn’t cover more.
Documentation is crucial when putting in a claim. “Receipts, receipts, receipts,” urges Sheri Machat, senior vice president, MH Ross Travel Insurance Services, Inc.. “It is amazing how often a claim is filed and there is no documentation to back it up.” She encourages people to tell someone when something goes awry, whether that is a hotel, airline, tour company, cruise line, police authority or doctor. Clients should also contact their agent immediately for advice. If treated by medical personnel, clients should ask the doctor to put the actual diagnosis on paper; without it, the claim may be denied. Use credit cards for payments of unexpected expenses. Save original receipts and copies of any reports.
Immediately contact the insurer. “Always call our One Call Emergency Assistance [phone] to report the problem and request assistance for accident, illness, travel delay, missed connection, theft and other issues,” says Machat, who notes that this action places an important date stamp on the situation. Don’t delay and wait until you get to the next port or destination.
Agents may benefit if they help clients submit a claim, so make sure proper documentation is included. If a claim is denied, appeal it. If that fails, talk to your consortium, franchise group, agency association or insurer representative. All About Travel’s Kathy Sudeikis says preferred supplier relationships are very important, but “agents need to show their commitment to completely understanding at least one vendor’s total product offering with scheduled training before they can ask for any ‘consideration’ from a travel insurance vendor.”
If a claim is denied on appeal, clients may still complain to the state’s department of insurance regulation, consumer protection agency, Better Business Bureau or a media ombudsman.
Most agents believe in travel insurance, push their clients to consider it and ask those who decline insurance to sign a waiver.
“We actually had a client die abroad, and, boy, was that family grateful that they purchased insurance,” recalls Cruise Planners’ Fee. “I’ve seen it pay off more times than not, and I personally wouldn’t travel without it.”