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Why your family should consider travel insurance: a cautionary tale

Plane taking off (courtesy Simon Grubb at Flickr CC)When does it make sense to buy family travel insurance?

Vacation packages and cruises are often expensive, nonrefundable deals. If some crisis occurs, or you or someone in your family gets sick, you will often find it difficult or impossible to get your money back.  A travel insurance policy can give you peace of mind before the expense of big-ticket vacations. Trip cancellation and interruption insurance can cover you in case of the unexpected.

I normally don’t mess with it because I’m an independent operator, not a package traveler, and it’s not usually worth buying it for a $300 Southwest Airlines plane ticket or a hotel room for a few nights. Right now, however, I am bemoaning the fact that I did not buy third party travel insurance (meaning it is sold by a company totally separate from whichever business you are paying for their tour package.)

My teen daughter was scheduled for a language-immersion high school school trip to France this summer. The tour company, Voyageur Tours, suddenly went bankrupt last week.It’s been a respected company since 1992, so this was a complete surprise.

The full story, featuring me as “the travel writer who was unfortunately bitten by lack of travel insurance,” is on the Austin-area NBC affiliate KXAN News Web site:  Parents mad after bankrupt student tour.

I did not follow my own advice with my daughter’s trip; I’ve written that although many tour companies and cruise lines offer insurance,  I recommend buying it from a separate, reputable company. It’s the “eggs in one basket” theory; if a tour company or cruise line or airline suddenly goes out of business, I don’t want to be insured through them and not only lose my vacation, but also my compensation for the lost vacation.

Well, I lost my shirt because I did not follow my own advice. I bought trip cancellation/interruption insurance through Voyageur.  The terms do not cover a Voyageur bankruptcy, plus there may be some fraud in that insurance premiums may not have been paid by the company at all.

It’s a mess. We may see some money back at some point through the bankruptcy proceedings, and a portion of my daughter’s costs were put on a credit card, so I’m going to use the credit card company’s leverage to perhaps at least get that amount re-credited back to me.

Take my advice in this cautionary tale, especially in this economy. Assume potential disaster and plan for same, or it may be c’est la vie for you.