Unsatisfactory trip-itinerary changes

by Wayne Wirtanen (See this month's Boarding Pass and Barbara Porter's letter.)

Suppose that you are midway through a European river cruise-tour and the itinerary or mode of travel has had to be changed because, for example, the water level is too high or too low to accommodate the ship. The itinerary change is not to your liking, you do not wish to remain with the group and you would like a prorated refund of the cost of the rest of the cruise.

Will your travel insurance policy pay your claim for the unused portion of the cruise for this reason?

The short answer is ‘No.’

River cruises are somewhat more susceptible to itinerary changes due to changes in river levels, but the following discussion also applies to tours and travel packages.

1) The cruise/tour operator’s information package will have stated that the company has the option to change the itinerary whenever necessary (with little recourse for you).

2) Once the cruise/tour has begun, no travel insurance policy, not even one with a Cancel For Any Reason rider, will accept a claim for reimbursement for the cost of the unused portion of the trip if it’s not for a “covered reason.”

Be aware that even if a cruise or tour were interrupted or canceled by the cruise or tour company, itself (for a reason such as extreme weather or the boat’s breaking down), the travel insurance company would reject any claims made for reasons not listed in the policy. Your only recourse would be to attempt to get some reimbursement or other satisfaction from the operator.

You might (erroneously) think these situations would be covered under “trip interruption,” but the trip-interruption fine print of your travel insurance policy allows claims only for the same “covered reasons” as in the policy’s trip-cancellation language, such as a death in the family or a medical emergency affecting you, your spouse or travel companion or a close relative back home or for one of the nonmedical reasons listed by the policy.

Applicable protections

For clarification of travel insurance companies’ applicable policies, I contacted Trip Mate (Kansas City, MO; 800/888-7292), which provides optional Trip Protection Plans for Overseas Adventure Travel (OAT) and Grand Circle Travel (GCT), which are major operators of river cruises, tours and other travel packages worldwide.

Trip Mate stated that it provides these two sister companies’ policies with similar features and that these policies include (at no extra cost) Cancel For Any Reason (CFAR) clauses.

Under OAT’s or GCT’s Trip Protection Plan, if you cancel your cruise or tour before departure for a “covered reason‚” and OAT or GCT charges you a cancellation fee, Trip Mate will pay you the difference in dollars between the cost of your cruise or tour and the amount refunded by the cruise or tour company.

(The amount of the cancellation fee depends on how close to embarkation you cancel, as described in your trip-information package.)

A hypothetical example — say that you paid $5,000 for a river cruise, then canceled for a “covered reason” 90 days before departure and the cancellation fee was 50% of the trip cost. The cancellation clause of your insurance policy would reimburse you for the remaining balance of $2,500. You would have had no loss except for the cost of the travel insurance policy.

In the period up to and including the date of departure, if you choose to cancel your cruise for anything other than a “covered reason,” then, with OAT’s or GCT’s Trip Protection Plan CFAR rider, you would be issued a voucher for a rescheduled cruise of equal value (no cash). The voucher must be used before 12 months from the original departure (embarkation) date.

With any other insurance company’s CFAR coverage, if you are scheduled for a river cruise (or a tour or travel package) and you wish to exercise your CFAR option, you should contact the cruise/tour operator at least three days before departure to inquire if there are any extenuating circumstances that might cause a change in the planned and paid-for itinerary.

If the answer received from the cruise/tour operator is not satisfactory to you — for any reason — you MUST contact your insurance company no less than two days before departure to utilize your CFAR option.

When you call to inquire, realize that even if the company’s answer is, “We’re not sure yet,” you must decide right then whether to activate your CFAR option or not. You either activate it and cancel your trip or you gamble on going on the cruise/tour knowing that you would be unable to file a valid insurance claim if the itinerary were later changed to something undesirable.

(Grand Circle Corporation assured me that, when river levels are questionable, they do their best to contact travelers before they depart for their trip, not once they arrive.)

Other insurance companies’ CFAR options

Some standard travel insurance company full-feature policies often give you the option to add a CFAR rider, but be aware that it will cost you 40%-50% over and above the cost of standard travel insurance premiums and you must purchase that rider within 14 to 30 days (depending on the provider and the plan chosen) of making your very first trip payment or deposit and you must insure all prepaid nonrefundable trip costs.

Insurance companies’ “standard” CFAR policies differ from the optional plan offered by the above-mentioned tour companies in that they reimburse you in cash instead of with a trip voucher. HOWEVER, you will receive only 50% to 80% of your insured prepaid nonrefundable trip cost, depending on the travel insurance company and the policy selected.

For the record, most people do not purchase CFAR coverage for their trips, but it’s nice to know that the option is available for those uninsurable situations that might arise.

As mentioned, you do not need to purchase the CFAR option if you are concerned that, for example, an unforeseen illness, injury or a death in the family may cause you to cancel or even interrupt your trip. These causes for cancellation and interruption are covered in a “standard” full-feature travel insurance policy.

Insurance cost comparisons

For a hypothetical $5,000 trip and a 70-year-old traveler, the following are typical of insurance costs:

• “Standard” full-feature travel insurance package — approximately $500.

• Same policy but with a CFAR rider (with a 60% trip-reimbursement payout) — approx. $700.

• Grand Circle Travel’s insurance plan with CFAR (which reimburses with a rescheduled-trip voucher) — approx. $500.

• The Betty James Travel Insurance Strategy* (zero-trip-cost, high-limits medical and evacuation coverage from a primary payer but with no trip-cancellation/interruption coverage) — approx. $65. (*See Oct. ’10, pg. 69.)

Why buy travel insurance?

Unfortunately, it is commonly and erroneously thought that travel insurance will provide protection against any of the myriad difficulties someone might have on a trip. But, unless they charged much higher rates, insurance companies could not stay in business if they were forced to reimburse people in every possible situation. Your insurance policy WILL cover you for the most common causes of trip cancellation/interruption.

Some final thoughts — there are times in life when unexpected minor derailments occur for which there is no apparent satisfying resolution. Instead of making a stressful fuss, it’s best to “suck it up” and get on with what’s important.

A useful thought when things have not gone your way — God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.

Happy trails!