Travel Insurance and Refundable Costs

[TotesMcGotes]

What is the general consensus on buying travel insurance to cover the costs of refundable tickets/fares.  When I took my first cruise back in July, I added up all my travel costs (cruise fare, hotel fare and airplane fare) and bought travel insurance based off that amount.  Both my airplane and hotel were fully refundable.  I am going on another cruise in February and this time around, I wanted to save a little on the cost of travel insurance, and just wanted to insure the amount of the cruise fare.  Is this recommended, or should I continue like last time and include the other fare amounts as well?

[klfrodo]

Depends on your State of residency laws/regulations and the terms and conditions of the policy you want to purchase.

Some States require/therefore the policy requires under certain circumstances that you include ALL trips costs for XYZ to be covered. Some States and/or policies don't require it for XYZ to be covered.

 

Would probably be best if you were to use a broker in this instance. Someone like,,,, oh, I don't know,,,, Steve!. Yep, Steve at Get the Best Trip Insurance Details, Advice (tripinsurancestore.com)

[GeezerCouple]

33 minutes ago, TotesMcGotes said:

What is the general consensus on buying travel insurance to cover the costs of refundable tickets/fares.  When I took my first cruise back in July, I added up all my travel costs (cruise fare, hotel fare and airplane fare) and bought travel insurance based off that amount.  Both my airplane and hotel were fully refundable.  I am going on another cruise in February and this time around, I wanted to save a little on the cost of travel insurance, and just wanted to insure the amount of the cruise fare.  Is this recommended, or should I continue like last time and include the other fare amounts as well?

 

As klfrodo mentioned, there isn't going to be a single rule about insuring refundable costs.

And the general consensus doesn't really matter, because it is *your* situation that will matter for you.  Others may well have different needs, etc.

 

We double the suggestion to contact Steve and associates at

www.TripInsuranceStore.com

but CALL them; don't rely upon the short online policy summaries, which simply cannot be complete enough by definition.

 

Some policies *require* insuring all costs to get certain types of coverage.  So it depends upon whether that is something that fits your preferences and travel needs.

 

Also note that to get the best choice of types of coverage, it is sometimes necessary to start the insurance within 10-20 days (depending upon state of residence) of the very FIRST payment.

 

So speaking with a travel insurance broker, someone who deals with several vetted travel insurers, can help you find the best policy for your particular needs.

(There is no additional charge for using them.)

 

They'll also help with a claim if needed.

 

GC

[CDNPolar]

As I always will, I will comment on Canada rules and with Manulife insurance, the following is the case:

 

1) If airfare is fully refundable to the original form of payment, then Manulife insurance will NOT cover that cost.  We often buy flights that are fully refundable, or refundable for $150 per ticket, and we have been refunded the penalty of $150.  In this instance, we do NOT cover our tickets, but we do cover the penalty in our total coverage.

2) If the airfare is a travel credit where you are retaining the value of the ticket, then Manulife will refund the cost of those tickets even though you have a future travel credit.  This is the case as long as the reason for cancel is a covered reason.

 

Basically the same for hotels.  If you are cancelling before penalty and it is refunded, then no coverage.

 

This is where some folks end up paying more for their insurance than they need to, and the insurance company is not going to complain.  

 

We had business class lay flat seats/beds to Vietnam a year ago and the air was more expensive than the tour we were going on.  The air was fully refundable so we did not cover it and had we, the cost of the insurance would have doubled, or more.

 

You must understand the rules where you are buying the insurance, but please don't pay for something that you don't need to.

[TotesMcGotes]

5 hours ago, GeezerCouple said:

Some policies *require* insuring all costs to get certain types of coverage.  So it depends upon whether that is something that fits your preferences and travel needs.

 

Also note that to get the best choice of types of coverage, it is sometimes necessary to start the insurance within 10-20 days (depending upon state of residence) of the very FIRST payment.

 

 

Yes, there are certain coverages I am interested in, where I need to purchase travel insurance within a certain timeframe from the first deposit.  Which I made last week, so this is why now I am shopping around before the deadline!

 

17 minutes ago, CDNPolar said:

As I always will, I will comment on Canada rules and with Manulife insurance, the following is the case:

 

1) If airfare is fully refundable to the original form of payment, then Manulife insurance will NOT cover that cost.  We often buy flights that are fully refundable, or refundable for $150 per ticket, and we have been refunded the penalty of $150.  In this instance, we do NOT cover our tickets, but we do cover the penalty in our total coverage.

2) If the airfare is a travel credit where you are retaining the value of the ticket, then Manulife will refund the cost of those tickets even though you have a future travel credit.  This is the case as long as the reason for cancel is a covered reason.

 

Basically the same for hotels.  If you are cancelling before penalty and it is refunded, then no coverage.

 

This is where some folks end up paying more for their insurance than they need to, and the insurance company is not going to complain.  

 

We had business class lay flat seats/beds to Vietnam a year ago and the air was more expensive than the tour we were going on.  The air was fully refundable so we did not cover it and had we, the cost of the insurance would have doubled, or more.

 

You must understand the rules where you are buying the insurance, but please don't pay for something that you don't need to.

This is my thinking, I do not want to pay for something I don't need to.  I didn't think about including penalty costs, which makes sense.  I've already booked my hotel which is fully refundable up until two days before check-in.  Then at their discretion they charge a fee, so I'll include that fee in the overall cost.  I have not purchased airfare, but I've been looking at the fare that refunds it to my original form of payment, no e-credit.

[GeezerCouple]

5 minutes ago, TotesMcGotes said:

Yes, there are certain coverages I am interested in, where I need to purchase travel insurance within a certain timeframe from the first deposit.  Which I made last week, so this is why now I am shopping around before the deadline!

 

This is my thinking, I do not want to pay for something I don't need to.  I didn't think about including penalty costs, which makes sense.  I've already booked my hotel which is fully refundable up until two days before check-in.  Then at their discretion they charge a fee, so I'll include that fee in the overall cost.  I have not purchased airfare, but I've been looking at the fare that refunds it to my original form of payment, no e-credit.

 

If there is an insurance policy that requires including *all* pre-paid costs, even if refundable, then on way around that is we try to get hotels that allow a "guarantee to the card" if we don't cancel within the specified advance time (e.g., 48 hours or such).

 

But note that IF one has a longer deadline and then cancels, because the charge wasn't actually *paid* before travel (and wasn't included in the total covered cost), then... no coverage.

This situation only occurred for us once, and that was okay, given that all of our covered costs, for several trips, have always been paid by Travel Insured promptly.

Usually, we could either cancel within the window, or we did go on the trip.

 

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[CDNPolar]

12 hours ago, GeezerCouple said:

 

If there is an insurance policy that requires including *all* pre-paid costs, even if refundable, then on way around that is we try to get hotels that allow a "guarantee to the card" if we don't cancel within the specified advance time (e.g., 48 hours or such).

 

But note that IF one has a longer deadline and then cancels, because the charge wasn't actually *paid* before travel (and wasn't included in the total covered cost), then... no coverage.

This situation only occurred for us once, and that was okay, given that all of our covered costs, for several trips, have always been paid by Travel Insured promptly.

Usually, we could either cancel within the window, or we did go on the trip.

 

GC

 

But let me ask this... 

 

If an insurance company or policy requires ALL pre-paid costs to be included in the covered amount, but it is fully refundable by the supplier, then the insurance company does not pay out for that, then is that even legal for them to require that as part of the covered amount?

 

We all know that the insurance premium is based on the amount covered.

 

I personally cannot see how any insurance company can require me to include cost and increase my premium for something that they will never be responsible for.

 

This just seem ludicrous to me.

 

[iamtrustworthy]

On 9/21/2024 at 9:38 AM, TotesMcGotes said:

What is the general consensus on buying travel insurance to cover the costs of refundable tickets/fares.  When I took my first cruise back in July, I added up all my travel costs (cruise fare, hotel fare and airplane fare) and bought travel insurance based off that amount.  Both my airplane and hotel were fully refundable.  I am going on another cruise in February and this time around, I wanted to save a little on the cost of travel insurance, and just wanted to insure the amount of the cruise fare.  Is this recommended, or should I continue like last time and include the other fare amounts as well?

Hi TotesMcGotes,

 

Some plans penalize you if you don't insure your full prepaid, non-refundable trip costs while others don't. You might find this helpful:

https://tripinsurancestore.com/what-is-your-trip-cost/

 

Steve Dasseos

[GeezerCouple]

1 hour ago, CDNPolar said:

But let me ask this... 

 

If an insurance company or policy requires ALL pre-paid costs to be included in the covered amount, but it is fully refundable by the supplier, then the insurance company does not pay out for that, then is that even legal for them to require that as part of the covered amount?

 

We all know that the insurance premium is based on the amount covered.

 

I personally cannot see how any insurance company can require me to include cost and increase my premium for something that they will never be responsible for.

 

This just seem ludicrous to me.

 

Yeah... Let me double check this. 🤔   I might be wrong about the "refundable"!  It might just be "all of the non-refundable".  Very sorry!

 

[Because of Covid, we haven't taken any major trips again yet since a return in Dec, 2019. So I guess I'm a little rusty on that detail.]

 

In any event, my point was about the charges that are NOT pre-paid but are also NOT "refundable" because they are guaranteed.  It's an unusual category, "guaranteed", I guess.   Only some hotels and rates have this, in our experience, with or without travel insurance involvement. So we were "out" that small hotel cost that time.  We had no receipt to show payment prior to the cancellation date, because it wasn't "pre-paid".  So there was no receipt - yet! - despite being "non-refundable".

I guess to *us*, the category would make more sense as "non-cancellable" rather than "non-refundable", because of the lack of pre-payment.  The hotel doesn't actually process the charge until arrival, although they probably check that the charge card is valid (?)... so nothing has been "paid".  That's how the insurer explained it, and we just never again let that status continue once we were on our way; we went ahead and *paid* the non-refundable amount(s) at almost the last moment.

But the insurance situation is the same, regardless of the label:  the cost was "gone".

 

We did double check that with the insurer, but because it wasn't a large amount, and the total claim *was* a large amount and everything else was paid very promptly, we just took that as a learning experience.  It would rarely happen, and never happened before or again (not to us! 😉) .  We either took the trip and used the hotel, or we cancelled the "guaranteed" hotel before the usually short deadline (e.g., 24 or 48 hours prior to arrival).  We do the same for shorter trips when we don't have insurance, too. 

 

GC