Travel Insurance Options for the Gulf

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It’s time for those hazy, lazy, crazy days of summer again. But if you’re thinking of backing out of that flight to New Orleans, or that beachfront hotel along the Gulf of Mexico, travel insurers likely won’t have your back.

Travel insurance is all about disasters conjured up by Mother Nature — that’s why travelers were covered after clouds of volcanic ash over Iceland grounded tens of thousands of people in Europe earlier this year. But the Deepwater Horizon oil spill in the Gulf of Mexico is considered a “man-made” disaster by insurers, and thus is usually not coverable on travel insurance plans.

There are some exceptions. If a tourist destination is closed due to the oil spill, travelers are covered. Ditto for tourists who can’t reach their preferred destination, like when a cruise ship can’t get to a destination because of the oil spill). But if you simply decide that you don’t want to fly down to Tarpon Springs and flop down on the beach among the tar balls, that’s not considered a “coverable event” by airlines, and you’ll wind up eating the airfare and paying any rebooking fees that may come into play.

A good rule of thumb: If the flight is canceled, you’re covered. If you cancel your own flight, you’re not covered.

Still, that’s not stopping tourists from canceling their trips to the Gulf Coast. According to Expedia.com, bookings to Florida’s Gulf Coast have declined by 15% in the three weeks after the spill.

But know this — if you do try to back out of a vacation to the Gulf, it could trigger steep penalties.

There are travel insurance policies that are a bit more flexible — they’re called “cancel for any reason” policies. But such policies are significantly more expensive than traditional plans. According to Travel Insured International, typical travel insurance costs amount to about 5% of your trip. But “cancel for any reason” plans cost about 7.5% of the total cost of your trip, and you’ll only be covered for up to 75% of the total cost of your trip.

If you want more coverage — say for 100% of your trip costs — you’ll likely have to pay out a lot more in travel insurance, and even then you’ll need to give 48-hour notice if you decide to cancel your vacation.

The website TripInsuranceStore.com has a good list of trip cancellation scenarios that are covered by “cancel for any reason” travel insurance plans:

  • You want to cancel your trip because you don't feel safe. Physical contact with crude oil — or even oil fumes — may be hazardous to your health.
  • You change your mind and don't want to go on your trip.
  • You get a new job and your boss won't let you have the time off.
  • A family emergency forces you to cancel your trip.
  • You're already approved vacation comes at a tough time in your personal life (illnesses, for example, are the number one reason trips are canceled).

One last tip. If you’ve already booked passage on a cruise or at a hotel resort destination along the Gulf, and you haven’t made your final payment, you can go ahead and cancel the reservation and rebook it with the “cover for any reason” travel insurance. Let the hotel or cruise line know that you’re rebooking with the insurance, and they may not charge you any penalties for canceling and rebooking.

By and large, any trip to the Gulf Coast isn’t covered by traditional travel insurance. But if you’re thinking of going just the same, consider “cancel for any reason” policies — right now, that seems to be your best bet in protecting yourself if you wind up canceling your trip.

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