# Trip Insurance Fine Printe Leads to a $10,000 Error



## MULTIZ321 (May 28, 2012)

Is This Fair? They Saved $74, but They Lost $10,074 - by Christopher Elliott/ Travel Troubleshooter/ Tribune Media Services


Richard


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## x3 skier (May 28, 2012)

I read that and have no sympathy for those who try and save $74 on a $10000 purchase.  

Cheers


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## T_R_Oglodyte (May 28, 2012)

This hits a sore spot with me.

My parents always read the fine print in anything that they signed.  That's what they did.  That's what I remember all of the adults doing in the world in which I grew up.  That was part of learning to be responsible.  People who signed contracts without reading the fine print were mocked for their stupidity.  When it happened to someone the prevailing attitude was that was a lesson they needed to learn.

Now I do admit I don't read the fine print on everything I agree.  For example, I don't print out and read the EULA's for every piece of software I put on my computer.

But when I'm putting money out on the line I do read the fine print.  I read the fine print on mortgages.  I read the fine print on auto loans. I read the terms and conditions for air fares and car rentals.  


Bottom line to me is that if you sign something without reading and understanding the fine print, you are assuming all of the risk and liability associated with that decision. That is a key concept behind *being responsible for one's actions* . The more we make it so that people can avoid responsibility for their stupid decisions, the more we enable irresponsible behavior.

*****

You should have seen the look on the timeshare salesman's face when we signed up for our first developer timeshare when he gave us the package of information to sign, and I immediately leaned back and started reading through the documents after about five minutes he asked me if I was going to sign.  I told him I don't sign anything until I read and understand the fine print.

Then he suddenly remembered that if we sign we have a 7-day right of rescission, so we can sign the documents, take the documents and review them at our leisure, and we won't be committed until after the seven days.


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## isisdave (May 28, 2012)

Pricing on trip insurance is by bracket, such as one price for up to $2500, another for up to $5000, the next for up to $10,000, or similar.  And the price difference between the $10k limit and whatever is next is surely more than $74 .. I'd guess it was at least $300.  So anyone not familiar with how this works might easily say "I'm not paying $300 to insure $74".

The other question is, who determines what the "total non-refundable price" is ... and when?

What if I book a cruise a year in advance, and wait to find my own airfare later? I won't know the total price until then. I'll bet if I buy two policies (one for the cruise, one for the air), neither one will pay.

What if I book my air with frequent flyer miles? What's the "value" of that? I've been told "nothing, because you didn't pay money for it"... 

What if my trip includes a resort with a 7-day-before-checkin cancellation policy? Regardless of when I buy it, it only becomes non-refundable a week before I arrive.


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## WinniWoman (May 28, 2012)

MULTIZ321 said:


> Is This Fair? They Saved $74, but They Lost $10,074 - by Christopher Elliott/ Travel Troubleshooter/ Tribune Media Services
> 
> 
> Richard



I just finished reading this article and low and behold there's a post on TUG already. The thing is....If your trip cost $10,074 and you are only expecting a $10,000 reimbursement-what is wrong with that? Sometimes, when you book a trip- you are not trying to get away with insuring $74.00- you are just thinking- I might as well just round it off. Sometimes, you are not sure what the full cost will be. Maybe you didn't rent your car yet. Or- maybe something changed- you upgraded your car or plane seats, or added something. You can add things as you go along in many cases to your insurance (I know you can with CSA), but maybe you didn't think of it because it wasn't a significant amount or maybe your just plain forgot. 

What I want to know is- can you submit receipts for LESS THAN the insurance you took out-for ex. you insured a trip for $10,074 and you just submit receipts for $9000.00. I have a feeling that the people who had the $10,074 trip probably paid only one or two payments for a tour and had to submit the total amount reflected on those receipts. If they had various receipts like- one for lodging, one for a car rental, one for plane tickets, they might have been able to pick and choose which ones to submit to get it covered and stay within the $10,000.00 range. That being said - why should they have to? I think it's ridiculous that the insurance company won't reimburse them up to their coverage limit. Just another scam in the insurance industry so they don't have to pay hard-working people who bought a policy in good faith. Screw the insurance companies! (Another reason to just travel within driving distance to home- traveling long distances on expensive vacations is too much of a hassle!)


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## WinniWoman (May 28, 2012)

isisdave said:


> Pricing on trip insurance is by bracket, such as one price for up to $2500, another for up to $5000, the next for up to $10,000, or similar.  And the price difference between the $10k limit and whatever is next is surely more than $74 .. I'd guess it was at least $300.  So anyone not familiar with how this works might easily say "I'm not paying $300 to insure $74".
> 
> The other question is, who determines what the "total non-refundable price" is ... and when?
> 
> ...



Right! And if you put the claim in - you are not asking for the $74.00. Just the limit of what you paid for $10,000.00. Why should there be a clause in these policies saying you have to insure the full value of the trip? Why?

When you insure a house, for ex., you insure it for what you want. Most people insure their homes for the full value, but- let's say you don;t want to- you want to insure it for half of what it's worth. If you have a fire and the house burns down, the insurance company will pay you up to the policy limits. They don;t say to you - "Sorry - your house was worth $500,000, but because you insured it for $200,000 we won't pay you anything! That would be absurd!

Now I have to check my policy for an upcoming trip. I read all the fine print and I do not recall seeing that clause and I am not sure of the amount I insured the trip for, although I think I might have over insured it. Is that ok? Who the heck knows?!


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## dougp26364 (May 28, 2012)

mpumilia said:


> Right! And if you put the claim in - you are not asking for the $74.00. Just the limit of what you paid for $10,000.00.* Why should there be a clause in these policies saying you have to insure the full value of the trip? Why?
> *
> When you insure a house, for ex., you insure it for what you want. Most people insure their homes for the full value, but- let's say you don;t want to- you want to insure it for half of what it's worth. If you have a fire and the house burns down, the insurance company will pay you up to the policy limits. They don;t say to you - "Sorry - your house was worth $500,000, but because you insured it for $200,000 we won't pay you anything! That would be absurd!
> 
> Now I have to check my policy for an upcoming trip. I read all the fine print and I do not recall seeing that clause and I am not sure of the amount I insured the trip for, although I think I might have over insured it. Is that ok? Who the heck knows?!



There doesn't have to be but, if it's there, it's best to insure the trip for the full price.

If you don't like that part of the fine print them move on to another policy with another comany. Because of the laws in the various states here in the US, most companies are required to offer a "free look" period. This give you time to read the policy and make a decision. These travelers had that opportunity and choose to not read the policy. If they had, they would have seen that they needed to increase the coverage limits by $74. Then everything would have been fine. As it was they purchased the policy on blind faith and nearly got burned (last part says Access Americe relented and made an exception).

I learned my lesson the hard way. READ THE FINE PRINT. Because the strike that affected us was not a strike by transportation workers, my claim was rejected. Those who insured with one of two other companies (that I was aware of, one being CSA) had their claims paid because their policy only said a strike.


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## Timeshare Von (May 28, 2012)

Insurance companies make money betting on the fact that you will not have a claim.  They want to be sure you are insuring and paying for full coverage of the maximum amount so that they make that money . . . plain and simple.

If people routinely under-insure, the insurance company will not have as much revenue to offset the expense when they do have to pay out.  (Here I'm talking "big picture" not on an individual purchase and/or claim.)

It would have sucked for them had the insurance company not given some leeway here, but I really have to say I understand why they would be a stickler for such a detail, especially since the pre-existing conditions terms were seemingly clear.


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## T_R_Oglodyte (May 28, 2012)

mpumilia said:


> Why should there be a clause in these policies saying you have to insure the full value of the trip? Why?



Because the insurer put it in and the purchaser agreed to it. Whether or not it makes sense to you or anybody else is irrelevant (provided the clause isn't founded on an illegal act).

If I agree to offer you money back on my rental of my timeshare to you only if you post a YouTube video of you standing on your head and reciting the Croatian alphabet backwards, that's solely a matter between you and me. 
If you don't like that clause you don't rent from me.  But if you agree to the rental under the terms and conditions offered you have no basis to complain that you are not getting your money back for some nonsensical reason.


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## MichaelColey (May 28, 2012)

mpumilia said:


> When you insure a house, for ex., you insure it for what you want. Most people insure their homes for the full value, but- let's say you don;t want to- you want to insure it for half of what it's worth. If you have a fire and the house burns down, the insurance company will pay you up to the policy limits. They don;t say to you - "Sorry - your house was worth $500,000, but because you insured it for $200,000 we won't pay you anything! That would be absurd!


You probably want to take a look at your house insurance.  I don't think it's as simple as you describe.

For intance, I know that with my house insurance if I insure it for the full value that the insurance company says it's worth, they give me REPLACEMENT VALUE.  If it burns down, they'll build it back exactly as it is.  If I insure it for less than the value they say it's worth, they only cover depreciated market value.


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## WinniWoman (May 28, 2012)

MichaelColey said:


> You probably want to take a look at your house insurance.  I don't think it's as simple as you describe.
> 
> For intance, I know that with my house insurance if I insure it for the full value that the insurance company says it's worth, they give me REPLACEMENT VALUE.  If it burns down, they'll build it back exactly as it is.  If I insure it for less than the value they say it's worth, they only cover depreciated market value.



Right. But they still "cover" it. If it was your choice not to cover the full value or the replacement cost-fine- but they don't not pay out anything! They will pay what you paid for in terms of coverage, minus deductibles, etc. (I, for one- have full replacement coverage on my house by choice.)


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## WinniWoman (May 28, 2012)

Timeshare Von said:


> Insurance companies make money betting on the fact that you will not have a claim.  They want to be sure you are insuring and paying for full coverage of the maximum amount so that they make that money . . . plain and simple.
> 
> If people routinely under-insure, the insurance company will not have as much revenue to offset the expense when they do have to pay out.  (Here I'm talking "big picture" not on an individual purchase and/or claim.)
> 
> It would have sucked for them had the insurance company not given some leeway here, but I really have to say I understand why they would be a stickler for such a detail, especially since the pre-existing conditions terms were seemingly clear.



But, if people routinely under insure, the insurance companies pay out less over time also.


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## WinniWoman (May 28, 2012)

dougp26364 said:


> There doesn't have to be but, if it's there, it's best to insure the trip for the full price.
> 
> If you don't like that part of the fine print them move on to another policy with another comany. Because of the laws in the various states here in the US, most companies are required to offer a "free look" period. This give you time to read the policy and make a decision. These travelers had that opportunity and choose to not read the policy. If they had, they would have seen that they needed to increase the coverage limits by $74. Then everything would have been fine. As it was they purchased the policy on blind faith and nearly got burned (last part says Access Americe relented and made an exception).
> 
> I learned my lesson the hard way. READ THE FINE PRINT. Because the strike that affected us was not a strike by transportation workers, my claim was rejected. Those who insured with one of two other companies (that I was aware of, one being CSA) had their claims paid because their policy only said a strike.



I agree about reading the fine print. I always read the fine print-I usually over analyze things to death!  But, these days, you need to be an attorney in order to do anything and your average Joe might not have the capacity to understand every freakin' thing in the fine print and the implications. One thing I know for sure - the FINE print should be *BOLD print. The insurance companies - and other businesses - should maybe be required to at least make all the exclusions loudly visible instead of just advertising all the wonderful benefits of their plans.*


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## WinniWoman (May 28, 2012)

Ok. So I just checked my policy and I do not see anything in the fine print about having to purchase insurance for the the full amount of your trip in order to be paid on a claim. It says that the co. will reimburse up to the amount listed on your schedule once you submit the required receipts, etc. I did notice that I am under insured by $3.00! I am not sure why this is but I am pretty sure it wasn't my error-probably the reps', as I only had airfare and lodging and I am usually very precise. I sent CSA an e-mail tonight about it just in case, asking them to increase the amount. (Seems ridiculous). (This got me to kind of wonder if reps are told by management to do this kind of thing on purpose assuming people wouldn't think anything of it and leave them off the hook should a claim have to be made. Hmmmmm...). I will tell you my husband and I were reading through the fine print and the way a lot of things are worded, it wouldn't even matter if you read it- you can't understand it! You would need a lawyer to help you- like with most insurance policies- a lot of legal mumbo jumbo. One thing- if I had a $10,000 claim rejected I would immediately be hiring an attorney to fight it!


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## Timeshare Von (May 28, 2012)

mpumilia said:


> But, if people routinely under insure, the insurance companies pay out less over time also.



I hear what you're saying, but if they get let's say 20% less on more coverage, the fact that they pay out less will be disproportional unless they raise their overall rates as a percentage of value/coverage.


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## Timeshare Von (May 28, 2012)

mpumilia said:


> <<snipped>> One thing- if I had a $10,000 claim rejected I would immediately be hiring an attorney to fight it!



Apparently no need to do that, just contact Christopher Elliott


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## dougp26364 (May 28, 2012)

Let's be clear about something. There is a WORLD of difference between a travel insurance policy and a homeowners policy. 

A few of you may recall the predecesor of the homeowners policy, frequently refered to as a fire policy. A fire policy covered specific events or perils. A homeowners policy is comprehensive and covers all events other than those specified as exceptions (Jewelery, cash, guns, photography equipement, floods, acts of war, earthquake et.... for instance). 

Trip insurance is almost always more like the old fire policy in that it covers specific perils under specific conditions. They are rarely, if ever, comprehensive covering all events expect for the exclusions. If they were comprehensive, they would be considerably more expensive to purchase. 

Comparing travel insurance to homeowners is a moot point. They are not even remotely similar once you get past the work insurance.


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## Ridewithme38 (May 28, 2012)

For the record, i work for a Property insurance Company, in the Claims department, Granted, i'm not an Adjuster or underwriter...But the majority of my work requires reading extensive First Reports of Losses and associated Policy information....Homeowners policies ARE very comprehensive...although, i wouldn't say the Coverage is Comprehensive

In my limited experience, the exclusions are much more comprehensive then the coverages


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## MuranoJo (May 28, 2012)

Re. homeowners' insurance, a few of the previous posts are correct. As an underwriter in a previous job, one of my responsibilities was making sure the insurance limit adequately represented the actual cash value (ACV) or replacement cost of the home, depending on the policy chosen.  And we'd review those limits for each policyholder every year to make sure they were kept current.  Ultimately, though, it was the homeowner's responsibility to make sure the limits were correct.

As I recall, if someone was underinsured and sustained a loss, the insurance company would pay a proportionate amount of the loss.  For example, if the insured only carried 80% of replacement value and had even a partial loss, the company would only pay 80% of that partial loss.  It's been a number of years since I was in the insurance business, but there may be variations between insurance companies.


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## dougp26364 (May 29, 2012)

Ridewithme38 said:


> For the record, i work for a Property insurance Company, in the Claims department, Granted, i'm not an Adjuster or underwriter...But the majority of my work requires reading extensive First Reports of Losses and associated Policy information....Homeowners policies ARE very comprehensive...although, i wouldn't say the Coverage is Comprehensive
> 
> In my limited experience, the exclusions are much more comprehensive then the coverages



Homeowners is comprehensive in that it covers everything but the named exclusions.

Travel insurance is not comprehensive in that it covers only those perils named in the policy. Everything else is excluded.


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## WinniWoman (May 29, 2012)

By the way, CSA just sent me a confirmation that they upped my cancellation coverage amount by $3.00! (No charge-lol!). They didn't respond to my inquiry regarding having to insure a trip for the exact total cost, but, as a mentioned in previous post, I do not see anything stated in the policy about that. 
:whoopie:


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## MichaelColey (May 29, 2012)

muranojo said:


> It's been a number of years since I was in the insurance business, but there may be variations between insurance companies.


Even more likely, there may be variations from state to state.  Insurance companies are heavily regulated by states.


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## Blues (May 29, 2012)

muranojo said:


> As I recall, if someone was underinsured and sustained a loss, the insurance company would pay a proportionate amount of the loss.  For example, if the insured only carried 80% of replacement value and had even a partial loss, the company would only pay 80% of that partial loss.  It's been a number of years since I was in the insurance business, but there may be variations between insurance companies.



Exactly right.  This is how most (certainly not all) homeowners policies are written.  That's why most financial sites recommend that you carefully review your policy periodically to make sure you're as insured as you expect to be.

To use the earlier example.  Say your house is worth $500K, but you insure it for $250K.  Now you have a fire with $200K of damage.  Think you're going to collect $200K?  In 90+% of cases, the answer is no.  You'll collect $100K, which is 1/2 the damage, because you insured the house for 1/2 the value.

-Bob


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## Mel (May 29, 2012)

Blues said:


> Exactly right.  This is how most (certainly not all) homeowners policies are written.  That's why most financial sites recommend that you carefully review your policy periodically to make sure you're as insured as you expect to be.
> 
> To use the earlier example.  Say your house is worth $500K, but you insure it for $250K.  Now you have a fire with $200K of damage.  Think you're going to collect $200K?  In 90+% of cases, the answer is no.  You'll collect $100K, which is 1/2 the damage, because you insured the house for 1/2 the value.


And if your $200k in damage includes damage to the contents, you might not even get that much, because that portion will be based on the depreciated value of the property, unless you purchased a rider to pay replacement value. Thankfully mortgage companies require usually require full insurance (they can't afford for you to lose out on the full benefit, as you are more likely to end up upside-down in your mortgage), but it is still your own responsibility to ensure you are not under-insured.


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## theo (May 30, 2012)

*Yessa!*



T_R_Oglodyte said:


> <snip> Bottom line to me is that if you sign something without reading and understanding the fine print, you are assuming all of the risk and liability associated with that decision. That is a key concept behind *being responsible for one's actions* . The more we make it so that people can avoid responsibility for their stupid decisions, the more we enable irresponsible behavior. <snip>



Beautifully stated and true. Dr. Phi McGraw is fond of saying that "*there are no victims, only volunteers*". I love that quote, but in our society it has somehow become commonplace and acceptable for people to want *someone else* to be held "responsible" for *their own* stupidity, inattention or carelessness...


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## mtwingcpa (May 30, 2012)

mpumilia said:


> By the way, CSA just sent me a confirmation that they upped my cancellation coverage amount by $3.00! (No charge-lol!). They didn't respond to my inquiry regarding having to insure a trip for the exact total cost, but, as a mentioned in previous post, I do not see anything stated in the policy about that. :whoopie:



Hmmm...this has got me thinking... 

I'm planning to rent a vacation place for three months next year. The way this particular deal works, I have to pay for each month 30 days in advance. So I will pay for the first month 30 days before the trip starts, the second month on the first day of the actual trip, and so on. Strictly speaking, it's written up as three separate 30-day reservations. 

So it seems to me I never have more than TWO month's worth of rent "at risk" at any given time - and that's the amount I was planning to insure. But if there is a potential problem if I don't insure the ENTIRE cost, then I'd need to insure for THREE months even though there is no chance I would ever lose that much.

Confusing!


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## siesta (May 30, 2012)

Per the article: Looks like the company did the right thing, they are honoring the claim even though techinically and legally they didnt have to.

Just goes to show, consumer advocacy groups really can make a difference. I applaude Chris Elliott, as well as Access America.


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## MaryH (May 30, 2012)

You need to be careful about those fine prints.  

I used my credit card insurance to cover a rental car and had an accident.  Avis said they normally can come and pick me up but only 1 person in the rental office so could I take a cab and they will reimburse me for the cab fare. They then tried to say they did not have the cash but could reduce the rental cost by the cost of the cab fare.  Not thinking I agreed and found out later that invalidated the credit card insurance since I have to pay for the car rental in full on the credit card..  I was pretty pissed off at Avis for the problematic suggestion for an easier way out for them for not having a cash float that caused me a lot of problems.


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## Tia (Jun 10, 2012)

It is confusing no doubt.

 Suppose I should look at airfare and ts maint. fee coverage to cover a trip in 2013....... but won'' know maint. fee's til later this year. Only know what they were this year.


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