When Claims Go Bad!

First let me state that the vast majority of travel insurance claims are handled professionally and quickly by legitimate travel insurance companies. But lets face it sometimes a claim will go bad and what can you do if it’s yours? Based on my 38 + years of travel insurance experience here is the process that you want to follow:

  1. Get it in writing.  Make sure you get the reason for the denial in writing. Don’t accept a verbal declination. If you feel you have a valid claim than you have a right under your policy to officially file one. Once the claim has been filed companies must than review it and they have a responsibility to give you the reason why they have denied your claim. That reason should refer to the specific provision/s of the policy that supports the company’s position.
  2. Ask for a claims appeal. Most companies will have procedures in place to review claims that are being contested. If they don’t than ask for the supervisor or manager of the claims area to review the claim.
  • Submit information that you think is pertinent to the claim and which will help the insurance company understand why it should be paid. Review the policy provision/s that they used to deny the claim. Is it a misunderstanding? Is the policy language ambiguous? Remember that if the policy language is ambiguous and if you could reasonably believe that you have coverage than the company should rule in your favor. It’s their contract, they wrote it, and they have an obligation to say what they mean.
  • Did someone at the insurance company advise you to do something and following their advice you lost money that now they claim isn’t covered? If so you should explain that in detail and ask for their review. Most companies record their calls and they can review what was told to you. Ask that they do that. If you were given wrong information they have a responsibility for the consequences.
  • Does the insurance company have enough information to understand the claim? In all of my experience with travel insurance claims this is the basis for most misunderstandings. If they ask for a copy of a cruise line cancellation clause don’t assume that they have it – send it to them.
  • And here is where an ounce of prevention is worth a pound of prevention: save all your receipts and documents as you plan your trip. If something happens while you’re on your trip and you have a travel or baggage delay remember to save all your receipts for expenses incurred and to get a statement from the proper authority as to why you were delayed. If you have medical expenses save your receipts and make sure the medical provider indicates why they treated you and the cost. It’s mostly common sense; insurance companies are going to require that you have documentation to support your claim. Remember if you’re traveling on business and your employer won’t reimburse you for undocumented expenses – why would an insurance company?

If you’ve purchased the insurance through a travel insurance expert they should be able to assist you and guide you with the information that that you need.

  1. Bring it to the next level.  If the appeal is denied and you still feel that it should be covered than file a complaint your state Insurance Department. Insurance is strictly regulated by the individual states and each state has complaint procedures if you feel a claim has been denied incorrectly or if a company has treated you unfairly. You should be able to find your state insurance department’s web site from your state’s main site or by doing a search on, {name of your state} insurance department, eg., Connecticut State Insurance Department.
  2. Small claims court. File against the insurance company whose name is on your insurance policy. There is usually a provision in your policy that will say “coverage is underwritten by” and than will show the name of the insurance company. The State Insurance Department will have the service of process name and address. This name and address will be important in filing you claim with the court because this will be the person that will be served the court summons. Make sure you follow court procedures and that you provide supporting documentation and all pertinent information. Most courts will provide you with the benefit of the doubt if you could reasonably believe that there was coverage.

Usually the claims appeal in item #2 will settle most misunderstandings. Especially if you have someone like a professional travel insurance agent that can walk you through the process and help you understand what might be the basis for the misunderstanding.

I have to stress that the vast majority of claims with legitimate companies are handled quickly and without a problem but every once in awhile a claim will go bad and you need to know your rights.

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