When Hurricanes Threaten, Here’s What Travel Insurance Can and Cannot Do for Your Clients

With the peak of hurricane season in the Atlantic basin approaching, travel insurance vendors need to reinforce not only the value of cancellation/interruption policies to clients planning trips to storm-prone areas, but make sure clients understand these plans’ limitations and exclusions as well.

Travellers need to understand that trip cancellation insurance is designed to cover only prepaid monetary losses that are not refundable by the travel supplier—reservation deposits, payments for tour packages, cruise ship tickets. It’s not meant to compensate for the disappointment of a lost “dream trip.”

If your client’s Caribbean cruise is shortened by two or three days due to a mechanical failure or an unscheduled rerouting to a safer port and the cruise line offers a make-up voucher for future travel, that’s considered a refund and disqualifies the need for a claim. Same story if an airline leaves the client stranded and then offers a voucher for a future trip, or a resort offers free make-up days later on. In effect, no double dipping.

And though any trip for which your clients have invested prepayments such as deposits or guarantees are worth covering by insurance, they must know that there are no guarantees they’re going to get 100 per cent of their money back. There are limits—usually per-diem caps—on those reimbursements and they must be clearly stated.


Invest in the freedom to change

Though some trip cancellation policies do restrict the reasons clients are allowed to cancel (such as for simply changing their mind about going), there are now many policies available that allow clients to do precisely that: to cancel for any reason. Such plans do offer a layer of protection should clients become concerned about an impending storm approaching their selected location, or about reports of civil disturbances at the region they are scheduled to be visiting.

Such “change of mind” or “cancel for any reason” policies may cost more, but in higher-than-normal risk situations—such as trips to South Carolina or the Caribbean in September or October—they can certainly be wise investments.


When to buy

Clients also need to purchase trip cancellation/interruption policies when they buy their trip (usually within 72 hours), not weeks or months later. And they need to know that if they are forced to cancel, the closer to their scheduled departure date that they do so, the smaller their reimbursement. It’s the protection over time that they are buying.


Storm’s up: time to cancel?

Because hurricanes and tropical storms are notoriously unpredictable—they can strengthen or dissipate overnight or change their predicted track—it isn’t until an official government “warning” for a given location is issued that a cancellation is justified.

For example, if your client cancels a vacation just because a storm out in the Atlantic is predicted to possibly come ashore close to their chosen location, they need to check their policy or call their agent for advice before cancelling. Because if the storm changes direction and leaves the property undamaged, cancellation benefits won’t apply—unless they had the wisdom to buy a “cancel for any reason” policy.


Stay flexible

Ideally, besides buying appropriate trip cancellation cover, a traveller heading into a storm-prone area should put down as small a deposit as possible to hold down the reservation, place the deposit on a credit card (as these companies have more leverage in securing rebates), and consider maintaining their travel flexibility by driving to their chosen site if possible.

It’s true that most airlines flying into storm-affected areas will waive rebooking or rerouting fees. But who wants to be stuck in an airport for several hours—or days?

Travellers need know they can best take control of their vacation by fully understanding what their travel insurance can do and what it can’t do.


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