Does travel insurance include hurricane coverage? How about credit card travel benefits? A TravelSort client, whom I'm helping with a Caribbean honeymoon, had these questions, since his honeymoon trip would fall during the June to November Caribbean hurricane season.
What Should Travel Insurance Include as Hurricane Coverage?
The first question is what you can feasibly insure against, in terms of hurricane coverage. You can't actually get a payout simply on the basis of a hurricane passing nearby or bad weather, even though there was a weather derivatives start-up that, had it succeeded, would have made this possible.
Instead, hurricane coverage is typically part of the “inclement weather” clause that provides Trip Cancellation and Trip Interruption coverage in the event of a hurricane or unforeseen severe weather. Depending on your travel insurance plan, you may be eligible for 100%, 150% or another amount of your paid, non-refundable trip costs for Trip Interruption.
Trip Cancellation Vs. Trip Interruption
The Trip Cancellation insurance coverage is relevant if the hurricane occurs before you're scheduled to travel, and prevents you from taking the trip, because your airline cancels your flight and/or your hotel or resort cancels your reservation. If you purchased a non-refundable flight, you would most likely only be offered a voucher for future travel from the airline, so you would need travel insurance to get an actual refund.
Trip Interruption Insurance coverage applies if you successfully arrived at your destination but your trip is interrupted by the hurricane, such that you have to evacuate your hotel or resort and/or your flight home is canceled or delayed. Your coverage can reimburse you for the extra out of pocket expense you incur for finding alternate accommodation and/or transportation home, less any refunds you receive from the airline and hotel.
The Bad News: Most Credit Cards Do NOT Offer Hurricane Coverage
As I noted in Trip Delay and Trip Interruption Insurance: Which Credit Cards?, remarkably few credit cards provide much in the way of trip delay or trip interruption travel insurance coverage, especially when it comes to hurricanes or inclement weather. Trip Interruption covered reasons are generally only a medical emergency, and NOT due to a hurricane or inclement weather, so you would need to purchase additional travel insurance to be covered for hurricanes.
What Do Sample Trip Cancellation and Trip Interruption Coverage Clauses Look Like?
(a) forfeited, insured Trip Cost, and
(b) additional transportation expenses incurred by the Insured, either
(i) to the Return Destination; or
(ii) from the place that the Insured left the Trip to the place that the Insured may rejoin the Trip; or
(c) additional transportation expenses incurred by the Insured to reach the original Trip Destination if the Insured is delayed, and leaves after the Departure Date.
However, the benefit payable under (b) and (c) above will not exceed the cost of economy airfare or the same class as the Insured's original ticket less any refunds paid or payable by the most direct route.
What Kind of Documentation Will I Need to File a Claim?
Always check directly with your insurer about the documentation and process you'll need to file a claim. For Travel Guard, you would need documentation from the airline and/or hotel that your reservation has been cancelled due to a covered reason, e.g. inclement weather / hurricane. So be sure to get this in writing.
Does Hurricane Coverage Include the Cost of the Resort Deposit As Well as Air Fare?
Yes. Many Caribbean resorts take 1-3 nights + tax deposit when you book, and the remainder 14-21 days prior to arrival. These prepaid costs should be refunded by the hotel itself in the event of a hurricane, but if not, you would file a claim with your travel insurance provider.
What If the Resort Moves Me to Lesser Accommodation?
If your 5-star resort evacuates you to a 2-star hotel, you won't be able to file a claim with your travel insurer, but you should be able to seek a refund from the hotel for the difference in quality, given that you weren't given similar quality accommodation.
Can I Purchase Hurricane Coverage After I Hear of a Hurricane That May Disrupt My Trip?
No–you would have already needed to have purchased travel insurance that includes hurricane coverage at least 24 hours before the hurricane is named. By the time the hurricane has been named and announced (or even if you're unlucky enough to buy insurance less than 24 hours before the hurricane is named) you're too late.
What If I'm Concerned About a Possible Hurricane But My Flights and Resort Haven't Cancelled My Reservations?
You wouldn't be eligible for coverage unless you paid for the additional “cancel for any reason” travel insurance coverage. If you think you would want to be able to cancel your trip in this scenario or worry a lot, you may want the peace of mind of “cancel for any reason” coverage (which is virtually always an extra add-on), even with the considerable additional expense.
Have you ever bought travel insurance that included hurricane coverage or wish that you had?
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