When James Pfeifer’s cruise is canceled and a full refund is issued, does he stand any chance of getting a refund on the premium paid for travel insurance?

Question: A cruise I booked on Regent Seven Seas through the Northwest Passage in July 2017 was canceled by Regent due to logistical reasons. My travel agent indicated that Regent subsequently decided that July was not a good time to go through a potentially ice laden passage but did not reschedule the trip. I purchased travel insurance directly from Travel Guard for $6,551 in May 2016.

After cancelling, Regent refunded 100 percent of my deposit. Travel Guard refuses to refund my insurance premium under the auspices of their “Fifteen Day First Look” rule (that is, you must cancel within 15 days of purchase).

I contend that their policy is now valueless as it has no exposure. Their policy references “Cancellation by the Insured”. I am the Insured and I neither canceled the trip nor had any control over the cancellation. Travel Guard instead issued a voucher for insurance on a future trip.

Can you help me persuade Travel Guard to refund my money? — James Pfeifer, Tucson, Ariz.

Answer: Your case is a perfect example of whether an insurance company, with a contract and all its fine print in hand, can choose to do the right thing for a customer.

Insurance companies are skilled at keeping customers’ money through specific contract language, exclusions and the occasional ‘gotcha.’ That’s what makes insurance cases so tough for consumer advocates to shoulder.

Even less promising are cases where a customer hopes for a return of an insurance premium. For example, when rental car customers decline optional coverages but are erroneously billed for the coverage, the insurance carrier’s defense is often that the renter benefited from coverage, in the sense that had damage occurred, a claim could have been made on the policy.

Tricky, indeed.

Here, however, Regent called off the trip, refunded all of your money and didn’t charge you any penalty. Since you didn’t cancel and never filed a claim, there is nothing that TravelGuard could ever compensate you for.

And since the insurance game is one of risk, you’re also correct that TravelGuard, underwritten by AIG, no longer has any exposure with regard to this trip.

By the way, my first question to you was to clarify that you actually paid $6,551 in insurance premiums, and not for the cruise fare. After I got up off the floor, it suddenly seemed a smart decision to have invested in trip protection for such a big financial investment.

When you wrote to AIG, the company cited its “Fifteen Day Look” policy, which states, in relevant part:

You may cancel this insurance by giving the Company or the agent written notice within the first to occur of the following: (a) 15 days from the Effective Date of your insurance; or (b) your Scheduled Departure Date. If you do this, the Company will refund your premium paid provided no insured has filed a claim under this Certificate.

In light of the facts surrounding your trip’s cancellation, AIG told you it would issue a voucher valid for two years for use on a future trip. In that way, the company keeps your cash and if you don’t travel within that time frame, it makes pure profit.

Your appeal to a supervisor didn’t get you very far, so you appealed to us for help. You didn’t like their proposed voucher, because per its terms and conditions, it had to be spent on a single trip. That placed some risk on you. In other words, if your new cruise cost less than the canceled cruise, you’d lose money in the process, a solution you found to be unreasonable.

I agreed. I wrote to AIG on your behalf and got no response. When I wrote to a second contact at the company, AIG issued you a full refund in the amount of $6,551.

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