Travel-insurance claim denied after bike accident

Q: I recently booked a trip to Colorado Springs on American Airlines. I paid for the tickets with a credit I'd received after canceling a previous flight, plus $350 in fees. I bought travel insurance from Access America, which is offered through the American Airlines website.

I had a bicycling accident and we could not travel to Colorado. I sent a claim to Access America with complete documentation, including receipts from American Airlines. The receipt shows a payment of $601 plus $350 in fees.

Now Access America says they won't pay the claim since we used the $601 credit from the earlier trip. Needless to say, I am upset because American advertises Access America on its site and the ticket agent when I rebooked said to call them. Can you help me get my money back?
— John Frow, Plano, Texas

A: Access America should have refunded your entire ticket, regardless of how you paid for it. Unfortunately, insurance claims are often denied because of a misunderstanding, and that's what appears to be happening to you.

A look at the terms and conditions of your policy on Access America's site shows there should be no distinction between the cash and airline vouchers you used. The insurance company should compensate you for the ticket, period.

According to the U.S. Travel Insurance Association, 1 in 6 policy purchasers file a claim, and of those, fewer than 10 percent are turned down. Many denials are overturned on appeal. I've heard informal estimates from insurance experts that roughly 90 percent of appeals go the traveler's way, although that's hard to verify. So you could have written back to Access America, clarifying the circumstances of your claim and asking it to take a second look.

What responsibility does American Airlines have? The airline would probably argue that it doesn't have any, and that it was simply selling an insurance product from its website. I'm not sure I would agree. By selling insurance on its site, American is offering a de facto endorsement, and bears some responsibility when you aren't compensated under the insurance company's own rules.

If your appeal had been rejected, your next step would have been to rope American into this case. Sometimes — and I've seen this happen — a travel company will step in when and insurance claim is denied to make things right. Maybe it would have issued some vouchers for future flights.

As it turns out, none of that would be necessary. I contacted Access America on your behalf, and it reopened your case.

"Because Mr. Frow used a previously obtained credit from American Airlines to book the flight he insured with us, we mistakenly thought that he did not incur a financial loss and initially denied his claim on that basis," a representative told me.

After "further review" Access America refunded you $601, which is the limit of your coverage.