Just like in my recent post on the subject of face shields vs. face masks on planes, this post is inspired by a good reader question, which I received via email. In short: If you purchased travel insurance to cover a trip that was canceled as a direct result of the pandemic, are you entitled to a travel insurance refund? Just like in the other post, I decided to seek out the answer from a trusted source…
The reader question(s)
Reader Bill K. wrote in first with a question about a suspended Trafalgar tour, saying:
“My wife and I have a tour booked with Trafalgar to visit Scotland and Ireland in September. Trafalgar recently ‘suspended’ tours until the end of November. They are offering full credit on future trips. I am not interested in a credit. I am afraid that they will go bankrupt and I will lose the entire deposit. According to the contract we have the right to cancel up to 45 days before the trip and get 100% of our trip fee back except for a $400 deposit. (We are still outside of 45 days.) Here is my question. Do we have the right to expect to get the $400 deposit back?”
Though Trafalgar says here that offering affected travelers credit toward future trips rather than refunds, my understanding is that since a rescheduled tour would (or could) be 45+ days away, Bill and his wife should be able to get their deposit back.
The second part of Bill’s question really got me thinking, however. He wrote:
“Also. We have trip insurance through Allianz. Can we get the policy premium refunded to us? It is about $600.”
Because I didn’t know the answer for sure, I reached out to my contacts at Allianz to find out. They wrote back right away. Here’s what they told me:
“We have a coverage alert up on our website which can help with this question…Specifically, if a customer’s travel supplier (tour operator) cancels the customer’s trip due to COVID-19, we will be happy to refund their travel insurance premium. Our customers also have the opportunity to use an existing policy for a new or rescheduled trip up to 770 days after the initial insurance purchase date. The customer should call us at the number on their travel insurance certificate for more information.”
That’s good news for Bill. Though it doesn’t mean that other providers will issue a travel insurance refund, too, there’s a good chance that this is the norm, at least among the major insurance providers. At the very least, you should make sure to ask (more than once)!
BTW: I’m no longer a brand ambassador for Allianz, but I was and probably will be again in the future. I also believe in the product. Another great option for travel insurance is InsureMyTrip, which is the Kayak of travel insurance. You can compare 20+ companies at once. (Full disclosure: I’ve included my InsureMyTrip affiliate link.)
Follow-up (updated August 3, 2020)
After seeing his tip run last Friday, reader Bill kindly wrote in to share a few updates:
“We called Trafalgar and they steadfastly refuse to issue any refund at all. They are granting credit for a trip next year at this year’s price. When I discussed their terms of service which gives us the right to a refund, less the $400 deposit, they cited , ‘Force Majeure,’ which means forces beyond their control. I’m not happy.
“I also contacted Allianz with questions about whether their contact covers me if Trafalgar goes bankrupt. Here is their answer:
“‘We are happy to review your coverage with you. As (sic) In order to qualify for coverage in the event your tour operator, airline, or cruise line ceases all operations due to its financial condition, with or without filing for bankruptcy, the policy must have been purchased within 14 days of the initial trip deposit. If this policy was not purchased within 14 days of the initial trip deposit, you may not be covered for this specific instance. As well, the policy does exclude for losses resulting directly or indirectly for epidemics, travel alerts, or travel bans.’
“We did not purchase our policy in the first 14 days (lesson learned). But the epidemic exclusion probably rules it out anyway.” Thanks again for sharing, Bill.
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