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Insurance avoids two big headaches

By Ed Perkins, Tribune Content Agency

Although travelers can gripe about almost any aspect of travel, two main pain points keep coming up: inability to get refunds and erroneous rental car damage claims. This isn’t just my idea; if you scan consumer advocate Chris Elliott’s postings, these two problems tend to dominate his complaints and often lead to the least satisfactory resolutions. And the sad part is that insurance can help you avoid both of these pains.

Refunding the nonrefundable. “We were set to go on our dream trip, but my husband had a heart attack and can’t travel. Now the airline won’t refund his ticket or mine. That’s not fair.” That’s the gist of many consumer complaints. And it’s completely unfounded. Airlines, cruise lines, tour operators, and resorts typically offer their lowest prices as “nonrefundable.” They mean it. Use it or lose it. Most airlines do a little better; they allow you to retain the monetary value of a canceled nonrefundable ticket and apply it toward a future ticket, but only after taking an unconscionably big exchange fee.

But “nonrefundable” means just that; it’s clearly specified in the contract you accept when you buy, and those contracts do not include any exceptions such as sudden illness. When pressed by a public “ombudsman” such as Chris Elliott, travel suppliers sometimes bend on a “one-time bases” to avoid adverse publicity. But they have the legal right to deny a refund no matter what, and absent an ombudsman, they stonewall you every time. Even when they bend the rules, cash refunds are rare; more likely the best you can hope for is a credit toward a future trip — whether or not you want it.

This problem is easy to overcome, if you plan sensibly. Trip-cancellation insurance (TCI) provides for a full cash recovery of anything you can’t first collect from a travel supplier. The “named perils” in most common forms of TCI include just about every medical or accident contingency you can think of, when suffered by you, your traveling companion, and even close relatives who aren’t traveling. Policies also waive exclusion for pre-existing conditions if you buy the insurance within a week or two of your first payment. For even broader coverage, you can buy “cancel for any reason” TCI. TCI costs 5 percent to 10 percent of your payment. And it usually includes valuable medical benefits, too. Just remember to buy it soon enough to get in on the pre-existing condition waiver.

Dented fender? Not me. “The rental company billed me for damage to the car that I didn’t cause,” they say; “The car was fine when I returned it.” Travelers often keep their car rental costs down by avoiding the gouge-priced collision waiver the rental car companies sell. No wonder: It often costs more than the base rental rate. But travelers who don’t buy it often get bills for damage a week or so after they get home. Clearly, this is a sort of he-said, she-said problem that can be intractable. But insurance can prevent most problems:

  • Your regular auto collision coverage — if you have it — may include rental cars. But a big deductible and the likely hike in your insurance bill detracts from using this option.
  • Most American Express, DinersClub, Discover, and Visa credit cards, and many MasterCards, automatically provide collision coverage when you use the card to pay for a rental. Most coverage in the United States is secondary, meaning you must first claim on your regular insurance. Overseas, however, credit card coverage becomes de facto primary.
  • Third-party insurers sell collision coverage for much less than the rental companies charge. Expedia, Priceline, and their affiliates typically sell it for $9 to $10 a day. This coverage is primary, which means you don’t first have to make a claim on your regular car insurance or credit card.

My current preference — and what I do on my own trips — is to use third-party coverage domestically and my credit card overseas. But no matter what insurance you buy, to avoid future argument, take pictures of your car when you start the rental and when you return it.

(Send e-mail to Ed Perkins at eperkins@mind.net. Also, check out Ed’s new rail travel website at http://www.rail-guru.com/.)

(c) 2017 TRIBUNE CONTENT AGENCY, LLC. — February 14, 2017

Ed Perkins is a nationally syndicated travel columnist, with weekly columns appearing in three dozen U.S. newspapers. He was founding editor of Consumer Reports Travel Letter and has written for Business Traveller (London), Arthur Frommer’s Budget Travel, The New Yorker, and National Geographic Traveler.

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