As international travel grows in popularity, Americans are choosing to protect their vacation investments by purchasing travel insurance. According to a recent AAA Travel survey, nearly 4 in 10 Americans (38 percent) are likely to purchase travel insurance for future international trips. For those travelers, trip cancellation protection is the most valuable benefit with 9 in 10 (88 percent) of those likely to purchase insurance saying that getting their money back, if they cancel a trip, is their top priority.
“More than 30 million family travelers will visit an international destination this year, 9 percent more than just two years ago,” said Bill Sutherland, senior vice president of AAA Travel and Publishing. “There are just too many unknowns, like family emergencies and natural disasters, which can throw an unexpected wrench into a planned vacation. Travelers are increasingly not taking chances and they’re choosing to invest in the value and peace of mind that travel insurance can provide, for international as well as domestic and cruise vacations.”
After the cost of their trip (70 percent), the leading influencers for travelers deciding whether to purchase travel insurance are: personal or family health concerns (69 percent); how far in advance the trip is booked (61 percent); and recommendations to purchase insurance by friends or family (57 percent).
In 2017, AAA members insured trips that were approximately 18 percent more expensive than the previous year, according to AAA’s 30-year travel insurance partner Allianz Global Assistance.
Top concerns for trip mishaps?
- You landed, your bags didn’t. Airlines mishandled more than 22 million bags in 2017. Travel insurance can provide coverage to replace needed items if luggage is delayed, damaged or stolen.
- Getting sick. Insurance may help cover medical expenses while traveling, internationally and in the United States. Many hospitals outside of the country require cash payments before providing treatment. Most health insurance policies don’t cover international travel. Travel insurance can help cover medical expenses and costly medical evacuation back to the United States in emergencies.
- Flight delays and cancellations. Airlines may not cover all the costs associated with a delayed or cancelled flight. Travel insurance can help reimburse expenses such as rebooking fees, meals and accommodations.
- Economic uncertainties. The loss of a job or other income may mean having to postpone a trip planned in advance. Travel insurance can help travelers recoup their costs when funds are tight.
Settling Flight Mishaps with a Voucher? Just say no!
By Christopher Elliott
Beware of funny money, fellow travelers. Airlines, hotels and cruise lines are quicker than ever to push vouchers into your unhappy hands when something goes wrong and you’re owed a refund or apology. But think twice before you say “yes,” because you might be forking over your hard-earned money without even realizing it.
Take Uber, for example. When it owed Shawn Crowley a refund after a billing error, it offered him Uber credit instead. But he just wanted his money back.
“They said I could dispute the charge with my credit-card company to get the Uber credit back on my credit card instead,” says Crowley, a college recruiter from Washington, D.C. “I told them ‘no’ and asked for another agent to review. That agent finally issued the refund.”
After Christina Conte found charges on her credit card for Uber rides she didn’t take, she asked the company for a refund, too. It gave her credits instead.
“This seems illegal to me,” says Conte, a food writer from Los Angeles.
It’s not, and Uber is hardly alone.
“It is becoming more customary for airlines, hotels and other travel agencies to provide credits rather than cash refunds,” explains Mahmood Khan, a tourism management professor at Virginia Tech.
Doling out scrip makes travel companies look generous, particularly when they’re doing it as an apology. But it can also increase their profits by making you spend more when you give the company your repeat business, or when the credit expires after a year and the company gets to pocket your cash.
Uber actually offers three types of refunds when something goes wrong, including a credit, a full refund or a partial refund, according to the company. Credits are typically given for poor service.
“If a rider has an illegitimate charge on their account,” Uber spokeswoman Susan Hendrick says, “we will refund it.”
There’s no shortage of stories from fellow travelers who were offered credits and lived to regret it. While Uber’s credits don’t expire, the ones issued by airlines and some other travel companies do. If you buy a standard economy class ticket and then change your plans, you’ll receive a credit that’s good for one year from the date of purchase. If you don’t book a ticket before that expiration date, your money’s gone.
That’s the frustration Jeanne Achille experienced when her recent JetBlue Airways flight was canceled because of bad weather. Because she had made the travel arrangements long ago, the flight credits only lasted a few weeks.
“When they expired, JetBlue wouldn’t budge on reinstating them, even though it was a short while after the expiration date,” says Achille, who runs a technology marketing firm in Jersey Shore, N.J. “So we avoid flying with them now.”
It could be worse. When Gayle Teresi tried to use her flight voucher she’d received from Spirit Airlines after canceling her ticket from Cleveland to Fort Lauderdale, an airline representative told her the credit was worthless.
“They told me their vouchers expire in 60 days,” she remembers. “Really? Every other airline allows 12 months from date of booking. It’s very annoying that $880 went down the drain.”
There are other drawbacks to the travel industry’s voucher system. For starters, you’re forced to patronize the business again. So if you’ve had a negative experience and the response is a voucher, you may be understandably reluctant to return.
And there are restrictions. Michael Foguth, a personal finance professional and frequent traveler from Brighton, Mich., is a collector of travel credits from airlines and hotels, the product of delays, cancellations and botched customer service.
“What I have seen are redemption issues and stipulations when going through the process of redeeming them,” he says. That can include blackout dates, expiration dates and other usage restrictions.
“Most of the time you have to call the airline, wait on hold and talk to a live person to apply the credit, rather than having the ease of going online, selecting a flight and choosing a seat.
Travel companies know their credits are hard to redeem and endlessly frustrating, but that’s exactly how they want it. Consumer advocates speculate that redemption rates on some vouchers are in the single digits. If a company makes it too easy to turn the scrip into a hotel room or a flight, it could deprive itself of an opportunity to make more money.
If all of this sounds profoundly unfair, that’s because it is. Funny money isn’t exclusively a travel problem, but the travel industry likes to take it to new heights, or depths, depending on your perspective. It begs for some common-sense regulation, which is to say, if you give a business cash, it should return cash.
Until then, when a travel company offers you credit, your reflexive answer should be “no.”
Three things they won’t tell you about vouchers
- Airlines are legally required to offer you cash.In some cases, such as a canceled flight, an airline is required to offer you a refund. Instead, it will try to offer to rebook the flight or give you a voucher that expires a year from the date of your reservation. Just say “no!”
- The blackout dates make it nearly impossible to redeem the voucher.Some credit isn’t really credit but a loose promise to offer a room or flight when it’s convenient. Make sure you read the fine print on the voucher before you agree to it. If you don’t like the terms, ask for a better deal, or a refund. Otherwise, you may never be able to use the credit.
- The credits will expire sooner than you think.Airline representatives are particularly vague about the terms. They’ll say the voucher lasts “one year” without also stipulating that it’s a year from the date of the original purchase. In reality, most airline credits last far less than a year from the date of your aborted trip. And when they expire before you can use them, the airline keeps your hard-earned money.
Christopher Elliott’s latest book is “How To Be The World’s Smartest Traveler” (National Geographic).