Few travelers bother to read that language before buying a policy. Slightly more will review it when they need to make a claim, but it’s still a considerable minority. Even when their claim is turned down, they try to appeal it by referring to their travel agent’s promises or arguing with the rejection letter without knowing what their policy actually says.
Dan Skilken, who runs the travel insurance Web site TripInsurance.com, says that insurance companies play it by the book when a traveler files a claim. They consider the facts of the claim at face value; if the policy covers it, they cut a check. If it doesn’t, they won’t. “The reason for a denial is usually pretty simple,” he says.
It was in the case of David and Mary Phillips, who bought a $387 policy through Allianz Global Assistancefor a recent cruise to Brazil. Unfortunately, they ran afoul of one small detail: Neither the cruise line, Azamara, nor their travel agent had told them that U.S. citizens must have visas to travel to Brazil. As a result, they were denied boarding on the boat, and they lost their $6,739 cruise.
David Phillips, a retired doctor in San Mateo, Calif., was upset about his ruined vacation and even unhappier that Allianz rejected his claim. But the Phillipses’ insurance policy is clear: It doesn’t cover trip interruptions that result from visa or passport problems.
To claims adjusters, such denials are as obvious as the quickest way from their cubicle to the water cooler. But to outsiders such as Yun and Phillips — and me, too — they’re not.
A few months ago, I had an opportunity to visit the Richmond offices of Allianz, and I came away with a better understanding of one of the travel insurance industry’s greatest mysteries: the apparent disconnect between insurance companies and their customers. The folks I met were proud of their product and could offer case studies of the many customers they’ve helped. But because of the way travel insurance policies are written, they often see the world in a binary way: yes or no, covered or not covered.
Every exception to that worldview must be approved at a high level. When customers grumble about having their claims denied, these insiders are genuinely baffled. “Didn’t you read the policy?” they ask.
As I stood in the understated suburban headquarters where every Allianz claim is processed, it all made perfect sense. Rules are rules, after all.
Mark Cipolletti, an Allianz vice president, says that his company has no choice in the matter. Insurance providers are strictly regulated by the states where they do business. “We’re subject to scheduled and unscheduled audits or reviews of our products and claims,” he says. “When we adjudicate a customer’s claim, we must follow the policy, or the contract with the customer, because if we deviate from the contract or treat one customer differently from another, then we become subject to fines and other punitive actions — like not being able to sell in that state any longer.”
But as you pull away, you start to understand why some travelers are angry. Some feel victimized by the travel agents and online retailers who sell these policies and don’t always explain them as thoroughly as they should. Upon reflection, they’re also angry with themselves for ignoring the policy details and assuming that the insurance would cover anything that could go wrong with their trip.
Which brings us back to Yun, who had every reason to believe that her insurance company would pay for her cancellation, no questions asked. Travel Guard seemed surprised that she hadn’t bothered to review the details of her policy; if she had, she wouldn’t have wasted her time with a claim.
“We’ve listened to all the calls with Ms. Yun, and while there were three opportunities when she could have corrected the total cost of her trip, this did not happen,” says Mueller, the Travel Guard representative. “As part of our commitment to providing astonishing customer service, we could have asked her a second and third time to double-check her exact trip cost, though we are not required or obligated to do so.”
Still, Travel Guard agreed to make one of those high-level exceptions to its rules and honored the claim.
Mueller was quick to add that I should let consumers know that they ought to read their policy carefully and make sure to fill out their paperwork correctly.
I agree. But maybe some travel insurance companies need to spend a little more time talking with their customers outside the claims process, if for no other reason than to understand why travelers are so disappointed when their policy doesn’t work as expected.
Elliott is National Geographic Traveler magazine’s reader advocate. E-mail him at firstname.lastname@example.org.