You think you're being smart by buying travel insurance to protect yourself from rising change ticket fees. But your claim may be denied.
It’s terrible enough when an emergency crops up, forcing you to change your travel plans. But airlines are profiting from your distress, raking in billions of dollars in fees from travelers changing or canceling flights, and from selling travel insurance, which is ostensibly designed to protect you when a crisis arises.
Last year alone, U.S. airlines pocketed more than $2.5 billion from travelers who changed or canceled flights, compared with $915 million five years earlier. On top of that, airlines and online travel agencies sold nearly $1.9 billion in travel insurance and travel assistance products, and there’s no way to tell how often insurers actually coughed up the cash when travelers filed a claim, a new report by the nonprofit National Consumers League found.
Many airlines charge you $200 to change or cancel your ticket for a domestic flight. If you want to get an idea of what your airline of choice is charging, SmarterTravel.com posted a list of all airline fees, including ticket change fees.
So what can you do in this uncertain world to protect yourself if your travel plans change?
Travel insurance concerns
While travel insurance seems like the obvious choice, with the sale of policies soaring 46 percent from 2006 to 2012, they may not be all they seem on first glance, according to the NCL.
Airlines and travel agencies often get commissions on insurance policies sold through their sites, so they score 10 percent to 40 percent of the policy’s cost.
And even if you have an important reason for canceling your flight, claims can be denied. A family member’s death may not be enough to get your claim honored, the NCL found. In fact, the Better Business Bureau has investigated hundreds of complaints about travel insurance companies in the past three years.
Read the fine print
If you’re considering buying travel insurance, it’s crucial to read all the fine print. In some cases, the details of policies are buried deep on an airline’s website, and the policies can be 10 or 20 pages long, NCL researchers found.
If you dig deep enough, you’ll find the policies often have exclusions, including for pre-existing conditions.
The report cites other exclusions, such as pregnancy, childbirth, being fired for cause, and participating in an amateur sporting event. So if your kid breaks an arm in soccer practice and you have to cancel your trip, your claim could be denied.
Know your airline’s policy
According to SmarterTravel.com, Southwest is the only airline that doesn’t charge a fee to change your ticket. Some smaller airlines charge lower fees than the major carriers.
American Airlines has implemented a tiered plan, where you can pay more for a ticket and not pay change fees, and you don’t pay extra to check a bag. The more you pay extra, the more perks you receive.
What changes are needed
In its report, the NCL is calling for congressional hearings on airline fees.
The NCL also calls for changes that allow travelers to transfer their ticket to someone else, at no cost, and for airlines to waive fees if a person has to change their travel plans just a few days before their flight.
The group also wants travel insurance companies to clearly state their policy details, so consumers are aware of exclusions. And they want the companies to be required to report the amount of money they actually pay out in claims.
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