Would travel insurance have saved the day for Southwest travelers? Experts offer their opinion.

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Beware: You need to know the exclusions in a travel insurance policy

If you weren’t caught in Southwest’s Oscar-worth performance in its Nightmare Before Christmas show, consider yourself lucky. But, let’s say that because of what fell apart for millions of others, you’re a bit nervous about something like that happening to you the next time you fly Southwest. 

The airline promises to make things right, but the experts at InsureMyTrip shared some holes in Southwest’s reimbursement promise with ConsumerAffairs – holes that might have been filled by travel insurance.

What constitutes a “significant” delay?

In its most recent get-tough move regarding refunds, the Department of Transportation probably wishes it had defined what a “significant delay” is. Many travel experts believe that benchmark is about three hours, but unfortunately, there’s no black-and-white number that would keep an airline from twisting that directive to its advantage.

Here’s how travel insurance expert Meghan Walch views that situation from both the airline’s potential interpretation and how a travel insurer might perceive it:

Southwest: “The airline’s website says there will be reimbursement of expenses incurred during a cancelation or significant delay,” Walch said. “However, there are no details about how long that delay must be or if there are limits to how much they will reimburse.”

Travel Insurance: “A policy purchased through InsureMyTrip will spell out these details.  For example, depending on the plan, the time frame will be somewhere in the three to 12-hour range.” Also, according to Walch, if Southwest will only cover a portion of the additional expenses, travel insurance may help cover the rest, up to the stated limits in the policy.

What if a flight delay or cancelation causes you to lose out on a portion of your vacation? 

Southwest: “From what I can tell, Southwest will not provide reimbursement for the pre-paid portion of a trip that is missed due to their delays or cancelations,” Walch told ConsumerAffairs.

Travel Insurance: “Travel insurance covers the prepaid non-refundable expenses of your entire trip, not just the airfare,” she said in her comparison.

Other situations that may be covered by travel insurance

When ConsumerAffairs investigated some other situations that aren’t directly related to the Southwest problem, but places, where travel insurance may come in handy when a flight is delayed or canceled here’s what Walch offered:

  • Additional kennel fees incurred if you’re delayed during your return trip home.

  • A traveling companion faces a covered cancelation/interruption, and you need to cancel/interrupt your trip.

  • 24-hr assistance services that you can call to help arrange airline or hotel accommodations.

Warning: Travel insurance can’t help in every situation    

As people found out when a little-known Airbnb policy about “extenuating circumstances” spoiled any chance of getting a refund during their planned vacation to Florida during hurricane season, consumers need to know that travel insurance does not offer protection for anything and everything that happens.

Pre-existing medical conditions can be thorny. To get coverage for pre-existing conditions, you have to qualify and obtain a pre-existing medical conditions waiver.

Anton Radchenko, founder of AirAdvisor, told ConsumerAffairs that things like poor weather conditions may also not be covered -- the key word there being "may."

Walch clarified that "IF there is damage to your destination/accommodations from a storm – and you are unable to visit this destination – you may find coverage through travel insurance – IF you purchased the policy before the storm was known/named." She also tacked on this twist: If you decide to cancel your trip because you're feeling iffy about the weather, you better have a "cancel for any reason" add-on. Otherwise, that change is completely on you.

Radchenko added another downside is that buying travel insurance may accrue additional costs to your travel budget that you may not have accounted for – especially if you’re going overseas.

"Travel insurance has drastically changed after the COVID-19 pandemic, so much so that certain countries even require travel insurance for COVID-19. Some of the countries that [still] require COVID-19 coverage include the Philippines, Indonesia, and Israel,” he said. Note: The U.S. State Department offers in-depth FAQs that explain policy "ifs" that should be considered when purchasing travel insurance. One example is that travel insurance and a health insurance card are different items and need to be addressed separately. 

As a real-life example of how a foreign country’s entry requirements can turn out to be a problem, you don’t need to look any further than what Broderic of Findlay, Ill., wrote in his review of Allianz Global Assistance – proof that a consumer can’t afford to make assumptions.

“When I purchased the insurance, I felt as though this was offering trip protection, such as a refund if my trip was canceled. I purchased this coverage for a trip to Austria, then the Austrian government changed their entry requirements only a few days after my purchase, barring me from entry,” Broderic wrote.

“When I canceled my flight and made a claim with Allianz, they claimed that I was not covered, as this event was a ‘Foreseeable Circumstance.’”

Before buying travel insurance, ask yourself some questions

Not every consumer is going to have the same experience with every travel insurer. In the ones that ConsumerAffairs lists in its travel insurance guide, some people may have a 5-star experience with one company whereas another consumer may have a 1-star experience. 

Since there is no one-size-fits-all government mandate for travel insurance, consumers need to do their homework and ask questions. On top of reading reviews and exclusions, ask yourself this: Do you need coverage for trip cancelations, medical emergencies, lost luggage, or all of those things?Then, make sure the policy you choose covers the types of events that are most relevant to your trip.

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