Image: Berch on a boom
Tony Giberson  /  AP
A Great Blue heron at Fort Pickens on the western end of Santa Rosa Island, Fla., uses an oil boom as a temporary perch as contract workers put out oil defense systems on June 10.
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updated 6/11/2010 4:13:34 PM ET 2010-06-11T20:13:34

Kathryn Calley got an unpleasant surprise when she decided to cancel her Florida beach vacation because of the oil spill. She was told her travel insurance would not cover her airfare.

"I figured that we would be qualified to receive reimbursement or credit for a future flight, as I had purchased a travel protection plan," said Calley, who works in public relations in Dallas and had planned a trip to Pensacola with her boyfriend.

"Come to find out, the travel protection plan only covers natural disasters," she said.

The oil spill is classified as a manmade disaster, which experts say standard travel insurance does not cover.

"If I was heading for a beach that has globs of oil on it, I would be distressed as well, but it's not a natural disaster, it's a manmade event," said Judy Sutton, director of product management for Travel Insured International.

"The hard facts of the insurance business are that in any policy, you collect on trip cancellation only for what is called a covered reason," said Ed Perkins, contributing editor at SmarterTravel.com.

In contrast, complications from natural disasters, such as when airports are closed by volcanic ash or hurricanes, are covered by standard travel insurance.

Because airports are not affected by the oil spill, most travelers who seek refunds directly from airlines will probably encounter rules similar to those in effect for insurance policies. A traveler who elects to cancel a flight to a beach destination because of the oil spill will probably have to swallow any nonrefundable fares and pay rebooking fees.

"When there's nothing to prevent the airline from running its flights, then the airline generally takes the attitude that 'it's not our problem,'" said Perkins. "The airlines are saying, 'We will take care of you when we cancel flights. We're not in the business of protecting people from canceled trips.'"

Sutton and Perkins both recommended that consumers consider buying "cancel for any reason" travel insurance as an alternative to more restrictive standard policies.

Sutton said standard travel insurance typically costs about 5 percent of the cost of your trip, while "cancel for any reason" policies generally cost 50 percent more, or about 7.5 percent of the total cost of your trip. (Older travelers may face higher premiums.)

Two things to keep in mind, though: Cancellations must be made more than 48 hours before departure, and "cancel for any reason" policies usually only reimburse the consumer for 75 percent of losses, Sutton said.

Perkins said some policies offer an upgrade to up to 90 percent of losses if you pay more upfront.

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