According to an article in the Seattle Times, never buy travel insurance from the company providing your trip.
Even if they twist your arm.
Even if they make it sound like it is the only option (it’s not).
If you are insured by your own tour operator, airline or cruise line — and then it goes under — you’ll have no recourse.
Nobody’s answering the phone. You can’t collect. Money’s gone.
That’s what happened to students across the United States recently when a popular educational tour company went bust and took their payments with it.
Voyageur Educational Tours of Worcester, Mass., declared bankruptcy in May, and students at 42 schools around the country lost trip money. Luckily, another company, the National Educational Travel Council, stepped in to help the students with the land costs of another trip, but they still were out lots of money. Individual travelers also were left in the lurch.
“I gave them $12,000 and they never even booked our flights or hotels. They stole from me,” says Julie Nichols of Commerce Township, who paid for her whole family to go to France. Yes, she had trip insurance — but guess what? It was bought through Voyageur, so it is now worthless.
Travel insurance plans can protect travelers from financial default of the travel supplier. However, this coverage is not available when the insurance is purchased from that supplier. Financial default does not always refer to bankruptcy, it can also mean a total cessation or complete suspension of operations due to insolvency. There can also be a limit on the amount of time from the trip deposit date that this benefit of coverage is available. It is wise to begin shopping travel insurance when the trip is booked, and comparing plans from sources other than the travel supplier. Always refer to the certificate of insurance for details.