The NCL Warns Against Travel Insurance: What They Got Right

insurance claim formToday, the National Consumers League issued a press release entitled “Think Twice Before Purchasing Travel Insurance This Season.”  Essentially, the press release — which draws upon a longer report by the group in which they explore the business of travel insurance sales by airlines and online travel agencies — warns consumers that they won’t be covered adequately for the things most likely to disrupt their holiday travel, and therefore purchasing travel insurance is a waste of money.

You may be surprised to hear us say this, but the NCL got a lot of things right.

What the average traveler might not realize, in reading the NCL’s press release and their full report, is that they are talking about a very specific type of travel insurance: The “add-on” insurance offered by airlines, cruise lines, and online travel agents.  At InsureMyTrip’s offices, we generally refer to that type of insurance as the “one-size-fits all” stuff.  We’ve written several articles and blog posts ourselves about that insurance, and we generally agree with most of what the NCL says about it.  It’s not good insurance, it’s not the right choice for most consumers, and it doesn’t do as much to cover the traveler as it does to cover the interests of the group selling it — whether that’s the airline, the cruise line, or the agent.

Travel insurance is not, and cannot be, a one-size-fits-all purchase.  It was never designed to be something that you could get just by clicking a check box on the internet to throw it into your online shopping cart.  Those so-called “travel protection” plans aren’t very protective, and smart travelers know that.  So does the NCL.  So do we.

That’s why we’ve always said, and will continue to say, that you have to do your homework — and you have to know what you’re buying.  Third-party insurance is always going to be a better and more informed purchase than something you get as an afterthought from a travel supplier.  What the NCL left out of their report was the fact that there actually is travel insurance available to cover the “exclusions” they listed as problematic for those who buy add-on travel protection plans.  Among the items the NCL says aren’t covered by travel insurance are:

  • Illness involving an existing medical condition
  • Pregnancy or childbirth
  • Termination of employment
  • A business meeting being cancelled
  • A student’s test date being changed

What they neglect to mention is that certainly, those things won’t be covered by some generic “protection” plan that’s supposed to take care of the basics; but they’re all things that could potentially be covered by a decent travel insurance policy that’s purchased from a verified, unbiased third party offering a variety of insurance options from a number of different providers.  Many plans, for example, offer waivers for pre-existing medical conditions; others have specialized coverage for different types of concerns arising from pregnancy and childbirth; still others offer “Cancel for Work Reasons,” a coverage that can provide benefits to a traveler whose employment status changes.  There are also options like Cancel for Any Reason, which allows travelers who meet the eligibility requirements to change their plans for any reason at all, regardless of listed “exclusions,” as long as they follow the guidelines listed in their insurance policy.

In other words, the NCL is right.  You shouldn’t insure your holiday travel through an airline, an online travel agency, a cruise line, or anybody else who tells you that it’s possible to just check a box and receive comprehensive coverage that’s worth more than the paper it’s printed on.  But the implication that there’s no value in making any sort of travel insurance purchase for the holidays, and that you’re somehow better off just testing your luck against airline delays, a horrible weather forecast, and a host of other possible disruptions is simply wrong.  We’re with the NCL on this much: Don’t make a hasty, uninformed purchase.  What they forgot to add was that better information, and good purchasing options, do exist.

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