Which Travel Insurance Policies Protect Against Hurricanes?

So far this year, two “named” hurricanes have already disrupted cruise itineraries and land resort operations in the Caribbean and Mexico, and the season is just about half finished. Despite attractive prices, many travelers are obviously nervous about scheduling fall cruises or tours to these areas. One reader asked, simply:

“If I decide to cancel a cruise because of a predicted hurricane, can I protect myself by buying travel insurance?”

The short answer is surprisingly vague: “Yes, but only with a few policies—most fall far short of what you might expect or need.”

Typical “bundled” travel insurance policies include three coverages that relate to hurricanes and other bad-weather problems. Surprisingly, however, in a world of “me, too” travel products I found some differences among policies from various companies.

Advance Cancellation

Full cancellation of a cruise or destination tour package scheduled for an area in the path of an upcoming hurricane would be covered by the “trip cancellation” provisions. Weather cancellation provisions in most policies’ fine print are surprisingly limited. Here are some typical statements of weather-related “covered” reasons:

• TravelSafe offers the most liberal weather cancellation policies I found. Those will cover you in “a cancellation of your Trip within 24 hours of your Scheduled Departure Date and time if your Trip destination is under a hurricane warning issued by the NOAA National Hurricane Center, provided the cancellation of your trip occurs more than 15 days following your effective date of coverage for the trip cancellation benefits.”
• Most other policies say only that they’ll cover a cancellation because of “Unforeseen inclement weather which causes complete cessation of services of your common carrier for at least 24 hours” but nothing about cancelling earlier because of named hurricanes. Most insurers also cover cancellation if some natural disaster renders your destination “inhabitable.”
• In general, all policies cover you only if you have to cancel because of an event you couldn’t “foresee” before buying the insurance. This limitation is actually reasonable: Insurance companies don’t what you to buy insurance only if you see a hurricane coming.

Those are pretty limited circumstances. Even TravelSafe won’t cover you until 24 hours before you’re scheduled to leave. And the others won’t cover you unless either your airline/cruiseline stops operating altogether or your destination can’t accommodate you. As long as your destination is open, insurance won’t cover you, even if ongoing weather or local post-storm problems would prevent you taking part in any of the recreation or sightseeing you had planned.

Early Return

Returning home early if a hurricane hit your resort area after you’d checked in would be covered by the “trip interruption” provisions. Here, most policies are similar. They cover early return if your destination becomes uninhabitable or your resort/cruiseline has to stop operating. Several insurers’ interruption provisions cover you if a local government officially announces a mandatory evacuation, provided you have less than 50 percent of your vacation left at the time. Again, however, the test is “habitable,” not how much a hurricane might degrade your experience.

Delay Disruption

Disruption of your itinerary because of cancellation or delay problems with flight to your cruiseport or destination would be covered by the “delay” provisions. Almost all policies’ delay provisions cover temporary expenses if a flight or cruise departure is delayed due to a “natural disaster” (read hurricane) or “bad weather.” Most policies kick in only for delays of 12 consecutive hours or more; TravelSafe policies cover only post-departure delays.

The Big Gaps

Clearly, even the best of these policies leave you open to some major risks and hassles. Among the biggest:

• Something bad actually has to happen, and it has to be really bad. None of the conventional policies covers you if you see, more than one day ahead, that your destination or cruise area is likely to be affected by a hurricane. And aside from TravelSafe, you can’t cancel and claim at all until a hurricane actually hits and disrupts either your travel or your destination.
• Most cruise line contracts allow the line to change an itinerary without your right of refund, and insurance companies generally back the cruiselines. No matter that you really wanted to see Baja California, for example; if your ship substitutes Ensenada or skips past Baja, the insurance companies say you have to duke out a settlement, if any, with your cruise line.
• Similarly, tour operators are allowed to substitute an “equivalent” destination itinerary or accommodation without your right to cancel, and one guess who gets to decide that is “equivalent.” Again, if you disagree, you have to argue with the tour operator, not the insurance.

The insurers’ overall approach is to put as much as possible of the onus for adjusting to (and compensating travelers for) hurricanes on the airlines, cruiselines, tour operators, and resorts:

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Typically, airlines can return to full operation within one day of a hurricane, so the window for insurance claims is short. On the other hand, in previous hurricanes, airlines have been pretty lenient about allowing no-fee schedule changes and rebooking, although they’ve been a bit stickier about refunding nonrefundable tickets. And, of course, they won’t return a penny of any other payments you may have forfeited because of late arrival or cancellation.

The cruise lines’ approach to last year’s hurricanes varied. Almost all of them substituted itineraries to avoid the worst weather; some offered partial refunds and/or discounts for future cruises to travelers on affected cruises, but others played hardball, saying, in effect, “All we promised you was a cruise. Our contract allows us to change itineraries and skip ports, and that’s what we did, for your safety.”

Resorts and tour operator generally act in a similar way. Any refund or adjustment you get is likely to be in the form of a voucher for—or discount on—a future trip/stay, not, in Yogi Berra’s s, “real money.”

All in all, my take is that, if your primary supplier offers only limited refund or reschedule options, insurance claims will be easy only if a hurricane actually hits your destination within a day or so of your scheduled arrival. Any other attempt to rearrange your schedule is likely to end in a protracted struggle with the insurance company—and one in which the cards are stacked against you.

Avoid the Hassles—Go For “Any Reason”

If you want to make sure your vacation is not disrupted to any significant degree, you have to be able to cancel as soon as your resort destination or cruise area appears to be in the probable path of a hurricane. To me, then, the conclusion is simple: Rather than worry about the fine print in various companies’ policies, most of you would be better off spending the extra premium required to add “cancel for any reason” provisions. Any-reason insurance is available with coverage up to 100 percent of your advance payments from CSA and TravelSafe, and up to 75-80% of your payments from Travel Guard, Travel Insured International, and Travelex. Most such coverages are extra-cost options, but well worth the cost, in my opinion, to avoid almost all of the potential risk and hassle.

As usual, I recommend comparing policies and buying through one of the several large online insurance agencies that sell policies from all the big insurance companies:

1travelinsurance

G1G

InsureMyTrip

QuoteWright

SquareMouth (also operates as QuoteTravelInsurance)

TerryTours

Total Travel
Insurance

Travel Insurance Center

Trip Insurance Store