DennisBeaverSeptember 24, 2011 (Original publish date) • By Dennis Beaver

Last week we introduced you to E.J. and his wife Anna, an amazingly energetic young couple, 75 and 74 years of age, respectively, who have been married for more than 56 years. In January, they booked a trip to Hawaii to celebrate E.J.’s birthday in May.

Using an online reservation service, nonrefundable first-class tickets were purchased for $3,500. E.J. was unaware that a $170 policy of travel Insurance from Travel Guard had also been sold.

“I only knew we had the insurance when my next statement from American Express arrived, but we thought it might be useful, especially at our age, so we did not dispute the bill,” our reader told us.

A trip which was not to be

Days before the flight, while the couple were talking about all the things they would do in Hawaii, E.J. suddenly began to “tremble, shaking like a frightened child, reliving the horrible turbulence of a flight we were on together in the past, when we thought the aircraft would be torn apart. I was consumed with fear and knew I could not fly. I had never experienced a panic attack before.”

His emotional state was also deeply affected by the loss of seven of his closest friends between January and May “due to old age,” E.J. whispered, head lowered so that we would not see his tears.

Their family doctor wrote a letter for Travel Guard, making it clear that E.J. could not travel because of this condition. A claim was submitted, but instead of compensating the couple for the price of the airline tickets, Travel Guard denied the claim.

Exclusions: a must read

Was this the case of a big, bad insurance company ripping off the public? No, not at all. The reason was simple: the policy language excluded mental, nervous or psychological disorders.

In fact, most travel insurance policies have similar exclusions.

“Travel insurance policies tend to promise the world, using words like full coverage, and then you discover that the comfort and assurance promised isn’t there,” San Francisco travel attorney Alexander Anolik observes. “Before buying, it is crucial to read the policy carefully to see if there is some exclusion which might apply to you. These policies are hugely profitable – sellers often get 40 percent of the premium – because the companies are often able to avoid paying.”

“The biggest exclusion is pre-existing health conditions. Use your common sense. Ask yourself, ‘What kinds of physical things could happen to me? Have I been treated for it within the timeframe in the policy’s exclusions?’

“Remember, the insurance company will use the policy language exclusions to avoid paying whenever possible. For example, while they might advertise terrorism covered, some policies go on to state that the act of terrorism must occur in the exact city you are visiting. This gives them a giant loophole to avoid payment. So a policy which states that the act of terrorism occurs in the area is obviously better for the traveler.

“Do not make any assumptions about what will be covered. Cruise insurance is one of the worst areas where what they deliver is often much less than what was advertised. If you’ve been sold a cruise, then you know the pressure both to take these expensive land excursions and to buy insurance.

“One couple bought insurance which covered death, and during the excursion, the husband had a massive heart attack and died immediately. He could not have been saved anywhere. But the insurance specified that the death must occur on the ship. The claim was denied and a lawsuit followed.

“Fortunately, The Department of Transportation has issued new consumer-friendly rules which go into effect in January 2012, requiring much more clarity and honesty in advertising. Until then, I recommend doing a great deal of online research and comparison, taking your time and asking yourself if you really need that insurance, or if what you have in place already will be enough protection. For example, if you go to certain areas of the world, you might need insurance for evacuation. But if you are traveling in North America, it’s rarely worth it,” Anolik believes.

We don’t take no for an answer

We asked a reservations supervisor to reissue the tickets so that the couple’s children could use them, but our request was denied. But there was no way we were going to see our readers lose their $3,500. That would have been so unfair.

But then we reached the airline’s vice president for public affairs. He had the power to do the right thing. And he listened.

A few days later, E.J. dropped by our office. “Dennis, I have something to show you,” he said, handing me his American Express statement. In it was a credit for $3,500.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.