"Standard trip-cancellation insurance" is like a standard sized window: there is no such creature.
If you are preparing for a major trip this year, and you are thinking about protecting yourself against losing your deposit money, or more, assume nothing. Get a copy of the insurance brochure and read it.One area has been begetting a lot of anxiety lately: default by a tour operator or airline.
The year 1989 brought acute financial difficulties and in some cases bankruptcy to Braniff and Eastern airlines, to the tour operators Flyfaire, Lindblad and Hemphill Harris; 1,629 retail travel agents also went out of business in 1989, some voluntarily.
Buying your travel with a credit card provides a level of protection before insurance.
If the company folds before your trip, you can refuse to pay the charge.
If a policy says it covers for bankruptcy, for instance, do not assume it means any other type of cessation.
As a second caveat, insurers that cover for operator default generally do not pay if the company that sold you the policy fails.
Following is information on operator-default provisions in the most commonly sold types of free-standing travel insurance.
Travel Guard International sells default protection in both its regular plans and its gold plan.
Its certificates say benefits will be paid if a trip is delayed, canceled or interrupted because of "financial default by any tour operator, or persons or organization acting as a tour operator, cruise line or airline, other than the tour operator or person or agency from which the insured purchased coverage or travel arrangements. Financial default occurring on or before the effective date of the insured's coverage will not be covered," the brochures say.
In the regular policy, $1,000 in default protection is provided along with the main coverage for accidental death, emergency assistance, medical expenses and loss of baggage and travel documents.
For a family trip of 15 days, the premium is $145; for a single person it is $106. If the trip cancellation coverage is purchased separately under the regular policy, the cost is $5.50 for each $100 of coverage, and the policy must be bought more than 12 days before departure date.
Under the gold policy, the comprehensive plan covers, along with medical expenses and other things, the cost of a trip up to $10,000 for a premium of 8 percent of the total trip cost. The underwriter for Travel Guard is Transamerica Occidental Life. Travel Guard is sold by travel agencies or it may be bought direct.
Travel Guard, 1100 Centerpoint Drive, Stevens Point, Wis. 54481-2849, 800-782-5151.
Tele-Trip of Mutual of Omaha will pay its clients if they are unable to take a trip or continue a trip because "an airline, tour operator or cruise line ceases to provide services, due to bankruptcy, more than 10 days following the effective date of coverage."
The premium is $5.50 for each $100 of coverage. Tele-Trip is sold in airports, although the 10-day clause would limit the value of a last-minute purchase. It is also sold by travel agents and direct.
Tele-Trip, Mutual of Omaha, 3201 Farnam Street, Omaha, Neb. 68131; 800-228-9792.
Access America, a subsidiary of Blue Cross/Blue Shield of the National Capital Area and Empire Blue Cross/Blue Shield, provides coverage for trip cancellation or interruption caused by "default of an airline, tour operator or cruise line."
For a trip of 15 days in the United States, Canada, the Caribbean or Mexico, a policy with $300 in trip-cancellation benefits would cost an individual $16, and each added $100 would cost $5.50.
For a 15-day trip overseas, a policy with $1,000 in coverage, along with other benefits, would cost an individual $89, plus $5.50 for each added $100 in coverage.
If the trip-cancellation/interruption coverage is bought separately for an overseas trip, the base price for a person or a family for $500 in coverage is $27, plus $5.50 for each $100 added, up to a total of $10,000.
The insurance portion of this coverage is carried by the BCS Insurance Co., an affiliate of the Blue Cross and Blue Shield Plans. Access America is sold by travel agents and direct.
Access America, Box 6786, Providence, R.I. 02940-9908; 800-284-8300.
Carefree Travel Insurance of Arm Coverage Inc. offers a "trip contingency (bankruptcy)" option but it may be bought only with one of its other plans.
The brochure says: "This benefit does not cover 1) any expenses incurred due to the financial insolvency of the person, organization or firm from whom you directly purchased or paid for your covered trip; 2) any financial insolvency which occurred before your effective date of insurance and 3) any expenses in excess of the amount of coverage you apply and remit the appropriate premium for."
If just trip cancellation-interruption coverage is bought, the cost is $5.50 for each $100 of protection up to $5,000; bankruptcy coverage of up to $5,000 may be added at a cost of $3 for each $100.
The Hartford Insurance Co. is the carrier for Carefree, which is sold through travel agents or directly.
Arm Coverage Inc., Box 310, 120 Mineola Boulevard, Mineola, N.Y. 11501; 800-645-2424.
Travel Assistance International of Europe Assistance Worldwide Services sells, as a supplement to other insurance, coverage for this: "Airline/cruise ship stops service: The airline or cruise ship stops all service completely, and that was first made public knowledge after you purchased your travel assistance membership ...."
An individual insurance package for a trip of 15 days costs $50, and the trip cancellation/interruption coverage adds a cost of 5 percent of the value of the coverage.
Transamerica Premier Insurance underwrites the trip cancellation part of this policy. It is sold through travel agents and directly.
Travel Assistance International, 1133 15th Street NW, Suite 400, Washington, D.C. 20005; 800-821-2828.
WorldCare Travel Assistance Association has a trip cancellation provision that covers failure to receive travel because "airline or cruise line stops all service completely" or "tour operator stops all service completely."
Medical expense and evacuation coverage for an individual taking a trip of 15 days would cost $105 and this includes $1,000 in cancellation benefits; added cancellation coverage would cost $5.50 for each $100. WorldCare's insurance is underwritten by Transamerica. The policies are sold by travel agents and directly.
WorldCare, 1150 South Olive Street, Suite T-233, Los Angeles, Calif. 90015; 800-666-4993.