Can Travel Insurance Protect Against the Gulf Oil Spill?

Worried the Gulf oil spill may ruin your summer beach vacation? Here are a few ways to protect yourself.

Don’t commit too early to prepaid, all-inclusive resort packages along any Gulf of Mexico coastline, in the Florida Keys, or even southeast Florida (Dade, Broward, or Palm Beach counties). And even Cuba’s north shore might be vulnerable, although at this point marine and weather experts can’t be too definitive about how far the spill will reach. The problem with predicting the spread of the oil eruption is that it is not yet contained, so we don’t know how much longer it will continue and how much oil it may ultimately dump into the ocean.

Make sure you have trip cancellation/interruption insurance as part of your medical emergency travel insurance package, but don’t expect it to cover all, or even most of your investment. Trip cancellation only applies to the prepaid, non-reimbursable portion of your trip costs, and prepaid fees are hard to pull back.

First, you would have to prove that your planned vacation was a total wipeout. But the hotel is still there, the rooms are as pictured in the brochure, the sand is white and warm, the waiters are ready to serve you daiquiris, and the “fresh” fish (flown in from Indonesia) is plentiful on the menu. The fact you can’t go into the water because of tar balls may be an inconvenience, but you’re getting everything else. So even though you have trip cancellation or interruption benefits, your chance of getting your money back would be slim, although your travel packager or destination resort might give you some credit coupons to use on another trip.

You might buy a “Cancel for Any Reason” or “Change of Mind” trip cancellation policy, which several Canadian travel insurers now offer, but even those are not 100 per cent coverage certainties. Still, they offer some protection. Usually, you have to buy those policies when you buy your trip, and from the agency that sold you the trip, and there are some copayment limitations that go along with them. For example, the earlier you cancel, the greater your recovery. If you cancel close to the date of your planned trip, your recovery will be smaller.

Manulife Financial, one of Canada’s largest travel insurance providers, is one of the few insurers to date that offers a “Cancel for Any Reason Policy.” It stipulates that it will reimburse “50% of the nonrefundable portion of your fully prepaid travel arrangements, if you elect to cancel your trip sixteen (16) days or more prior to the departure date for any reason whatsoever; or…25% of the nonrefundable portion of your fully prepaid travel arrangements, if you elect to cancel your trip forty-eight (48) hours to fifteen (15) days prior to the departure date for any reason whatsoever…” There are also limits on the amounts reimbursable.

Another way to protect yourself is to limit your prepaid portions or deposits. If you’re dealing with a property on the US mainland, make your own reservations and commit yourself only to one or two nights of deposit fees for your hotel. Most are quite happy with that. You don’t need to go all-inclusive. Then, if you see that the oil spill is becoming a threat, you can change your plans and the most you will have sacrificed is your deposit—although in that case, many good properties will not want to lose you as a customer next year and they may give you a pass on your deposit.

In the meantime, keep your eyes focused on the travels of the Gulf “loop current.” Your best official source is US National Oceanic and Atmospheric Administration. The news media sources can get a little hysterical at times.

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