Which Hurricane Insurance is Best?

Published by September 30, 2010

The most active time of hurricane season is here and many travelers are asking which travel insurance policy has the best coverage.  Some insurance may seem to offer more coverage for trip cancellation or trip interruption, but depending on the vacation, it is important to look closely to find the right policy.

Good hurricane coverage is most important for people traveling to remote destinations.  A vacation to an island in the Caribbean means there are fewer options when a storm is expected to hit.

Evacuating from an island and returning after the storm has passed can be an expensive ordeal.  Understanding the subtle differences with mandatory evacuation coverage becomes invaluable.  Consider the following policy language under covered reasons for trip cancellation and trip interruption:

  • Mandatory evacuation or public official evacuation advisements where there is no mandatory evacuation issued by local government authorities at your destination due to adverse weather or natural disaster. In order to cancel your trip, you must have 4 days or 50% of your total trip length or less remaining on your trip at the time the mandatory evacuation ends.

This means, even after evacuating, if there is a substantial amount of trip left, the traveler is expected to return to the destination or else forfeit the unused portions of the trip after the evacuation is over.  The 4 days or less  or 50% or less requirement is common, and in this case, only applies to trip cancellation.  Trip interruption is not affected by the rule.  Therefore, the missed time during the evacuation and the transportation costs of evacuating are eligible for trip interruption coverage.

Other policies are strikingly similar, however, the same 4 day, 50% requirement also applies to  trip interruption:

  • Mandatory evacuation or public official evacuation advisements where there is no mandatory evacuation issued by local government authorities at your destination due to adverse weather or natural disaster. In order to cancel or interrupt your trip, you must have 4 days or 50% of your total trip length or less remaining on your trip at the time the mandatory evacuation ends.

In this instance, the policy language includes the word “interrupt” which is significantly different than the first example.  A policy like this would not cover the unused trip cost during the evacuation, or the transportation expenses for evacuating as trip interruption, unless the 4 day, 50% requirement was met.  If the trip was to Bermuda, there is a significant cost to leave, then return, and potentially none of those travel expenses would be covered.

It can be much easier and less costly to evacuate and return to a mainland destination, which  might make evacuation coverage less important.  To find the right hurricane coverage, consider what policy language could apply for a specific trip.

Some policies cover the threat of of a hurricane:

  • Cancellation of your trip within 24 hours of your scheduled departure date and time if your trip destination is under a hurricane warning issued by the NOAA National Hurricane Center.

Policies with this covered reason allow the trip to be cancelled if a hurricane warning is issued, however, only during the one day prior to departure.  This is beneficial because a hurricane warning will be issued before a mandatory evacuation.  Sometimes a warning is issued because of the projected path of the storm, but the storm changes course and no mandatory evacuation is necessary.

Other coverage protects against perils involving public transportation:

  • Weather that causes complete cessation of services of your common carrier for at least [12, 24, 48] consecutive hours.
  • Inclement weather causing delay or cancellation of travel.

These covered reasons are only useful when the travel plans include ticketed, public transportation, such as a flight or train.  The two are similar, however, the first requires the stoppage of service last for a set amount of time, usually 12-48 hours.  The second is a more liberal version and does not require a set amount of downtime by the common carrier.

Lodging can also be covered:

  • Accommodation at the destination is made uninhabitable by fire, flood or natural disaster.

If a hurricane renders a hotel or condo unlivable, the trip can be cancelled.  It is important to understand this applies to the lodging specifically.  Beach erosion, damaged infrastructure, like roads and bridges, power outages or closed attractions, such as theme parks, are not a part of this coverage.

All of the hurricane coverage in travel insurance requires that some peril is actually impacting the trip:  evacuation, hurricane warning, cancelled flights, damaged lodging, etc.  However, there is another option for travelers that want the freedom to choose to cancel the trip.

Cancel for any reason coverage allows the trip to be cancelled without providing any explanation.  This coverage would let a traveler simply decide to not take the trip, for example, if a hurricane is threatening, but may not impact the destination or travel plans.  Unlike trip cancellation, this will only reimburse a percentage of the trip cost, anywhere from 50% – 95%.  Depending on the policy, this benefit is only available for 9-30 days from the initial trip payment date.  Also, to use cancel for any reason, the trip must be cancelled at least two days before departure.

Cancel for any reason provides the traveler the most options for cancelling a trip due to threat of a hurricane.  Otherwise, a claim will only be paid if the traveler experiences a situation specifically outlined in their policy.

So what is the best hurricane insurance?  The answer depends on the trip and the traveler.  For an island vacation, get the right evacuation coverage.  Travelers taking multiple connecting flights should look for a low number of hours in the complete cessation of a common carrier or get inclement weather coverage.  If someone wants the ability to cancel the trip out of fear of a hurricane, cancel for any reason is the best, and only option.