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Tragedies and travel insurance: Are you covered?

The ripple effect of the Sept. 11, 2001, hijackings and disasters in New York City and Washington, D.C., that closed airports for several days and stranded passengers worldwide proved a test of any travel insurance policy.

Four planes were hijacked that day, two flown into the World Trade Center towers, a third into the Pentagon, and a fourth crashed near Pittsburgh. The estimated 36,000 flights canceled after those events included flight crews being stranded and travelers needing to find accommodations until they could get in the air again.

The nation's air fleet was grounded following horrific hijackings. The shutdown of commercial aviation after the terrorist attacks forced jetliners to divert to airports from Honolulu to Halifax, Nova Scotia. The shutdown's ripple effect grounded almost half the commercial flights throughout the world. About 30,000 passengers from diverted flights were stranded in Canada.

All told, about 4,500 of the world's 12,000 commercial aircraft were grounded in and near the United States until Sept. 13, according to the International Air Transport Association in Geneva.

Does travel insurance compensate you if your flight is hijacked or your trip delayed due to an act of war?

Despite the drop in air travel, travel insurers have seen an increase in business from those people who still have plans for the upcoming holiday season. And travel insurers are reviewing policies that once excluded any terrorist risks unless the incident was an international one.

Dan McGinnity, communications vice president for Travel Guard International, acknowledges the drop in passenger numbers but says that travel insurance sales are equal to or above figures from a year ago. This demonstrates that travelers are buying travel insurance in greater numbers.

Travel Guard International expanded its insurance from only covering canceled plans resulting from international terrorist attacks to covering plans interrupted by both international and domestic terrorist attacks, applying it to travel anywhere an attack has occurred within 30 days.

Travel Guard representatives say it will cover travel insurance claims resulting from the terrorist attacks for travelers who purchased the company's standard retail travel insurance policies prior to Sept. 11. Travel Guard will cover trip-delay claims — based on the terms and conditions of the specific policies — for travelers affected by the terrorist incidents.

Travelers who purchased the company's Cruise, Tour & Travel or Travel Guard Select polices also will be given the option to reschedule or cancel their trips altogether and receive reimbursement from Travel Guard. Those who purchased Travel Guard's Super Saver economy plan prior to Sept. 11 will be covered for trip-cancellation claims if their trips are scheduled to begin prior to Oct. 11, 2001. Customers with questions or claims can call Travel Guard's 24-hour service center at (800) 826-1300.

A customer service representative with Access American International, a seller of travel insurance, says that if coverage includes delays of travel or vacation, policyholders should be compensated. However, the company wouldn't give specific details until each claimant submits an application for compensation.

The insurance coverage offered by CSA Travel Protection includes exclusions for losses arising from particular situations. CSA's Travel Protection products include an exclusion to Trip Cancellation and Trip Interruption Coverage for losses caused by "any government regulation or prohibition."

CSA President Les Maine says that CSA has determined that the "any government regulation or prohibition" exclusion does not apply to the Federal Aviation Administration's (FAA) actions of Sept. 11. "Our customers whose travel plans were directly affected by the FAA suspension of flights, and subsequent reductions of service during Sept. 11 to Sept. 16, 2001, should contact CSA for assistance," says Maine.

Still a mystery

Claudia Fullerton, CSA's chief marketing officer, says until claims are filed and examined, it's not known what will be paid.

Two days after the horrendous incidents, Fullerton says that CSA's legal counsel was reviewing the insurer's policies in relation to what had happened.

"We have coverage for terrorist acts within certain parameters," Fullerton says. CSA also suspended issuance of any new policies for a week after the disasters.

It will only pay out if you have to cancel or leave early because of a covered reason. That's why it's so important to read the fine print.

Fullerton says any policyholders who feel they have a claim are encouraged to file one.

"We have to look at each person's travel situation on an individual basis," Fullerton says. CSA writes an estimated $85 million in premiums each year. Claims will be paid dependent on travel dates and what is covered under each policy, and CSA's underwriter will make the final decision. "We can't determine that ahead of time."

The attitude that the airlines, cruise lines, and tour operators are taking is one of cooperation, and trying to be positive.

"We encourage people to call their airlines and to talk to their tour operators," Fullerton says. "Everyone in the industry is working on alternative solutions."

Do you need it?

Trip cancellation/interruption coverage will reimburse you for any nonrefundable deposits you put down on a trip or cruise if it turns out that you won't be able to go after all, or if you have to leave early. The catch? It will only pay out if you have to cancel or leave early because of a covered reason. That's why it's so important to read the fine print. See The basics of travel insurance for more details.

The responsibility of the airlines

An airline is not necessarily liable if your flight is delayed or cancelled. "Acts of God," such as bad weather, are deemed beyond the carriers' control. When delays or cancellations are caused by the weather, they will usually refund your ticket, even if it's a nonrefundable ticket. But they won't necessarily be responsible for any inconvenience you suffered.

Airlines are not required to compensate passengers for delayed or canceled flights. Each carrier differs in its policy, and there are no federal requirements. Most will book you on the next available flight. If your plane is delayed, the airline may pay for meals or a phone call, so ask. Some will offer no amenities if the delay is caused by bad weather, or other conditions beyond their control. Compensation is required by law only if you are "bumped" from a flight that is oversold.

To find out how a particular airline or airport fares in these and other performance-related areas, read the Air Travel Consumer Report, put out by the U.S. Department of Transportation.

Where to buy it

Many travel agencies, cruise lines, and tour companies sell travel insurance directly, but it's not really the best way to buy it. While prices are sometimes better, the coverage is likely to carry more exclusions. Buying insurance through a cruise line or tour company also means you probably won't be able to collect if they go under. In general, it's best to buy travel insurance directly from an insurance company.

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