These days you can get insurance for just about anything, but in the travel industry, you can find insurance options for just about every aspect of travel you can think of:  trip cancellation, theft, baggage loss and even physical injury.  Additionally, the number of places you can buy travel insurance from is equally vast.  On the free side, many platinum credit cards come with basic travel related features.  But after that, the price for travel insurance can increase drastically, and it seems everyone is looking for a cut of the action.  Most car rental places will play coy about the free car rental insurance that comes standard with many credit cards as they try to pitch their own insurance options. Booking services will often offer cancellation protection for a fee, and travel agents can give you a whole host of insurance options when shopping for that perfect getaway.

Unfortunately, travel insurance purchases are often made impulsively without reading the contractual details or exact terms of coverage.  Consumers can be sorely disappointed when they discover that a claim they thought was covered by their insurance is denied.  And sure enough, when they read the fine print, they learn their ‘coverage’ came with strings attached and prerequisites for fulfillment.  As a recent lawsuit in Tennessee highlights, sometimes these “travel protection companies” aren’t even licensed to sell insurance:

The lawsuit says Trip Assured “marketed its trip-cancellation product as insurance, but the company was not licensed to sell insurance.” The company often used terms associated with insurance, like “benefits,” “deductibles” and “indemnification.”

“Trip Assured picked these terms deliberately to mislead consumers into thinking they were buying insurance,” the suit says. “At a minimum, Trip Assured acted negligently in using these terms.” [Read more...]

This isn’t to suggest that all travel insurance options are scams.  However, this is an industry where consumers are willing to pay a marginal fee for the protection offered in the brochure and read the fine print only after they need the coverage.  By then, it’s often too late.  There’s something comforting about buying travel insurance after shelling out several thousand dollars for a trip. It makes travelers feel their trip can’t go wrong with the insurance in hand, and most of the time it doesn’t.  But if you’re buying travel insurance without reading all the fine print, you might as well just buy a lottery ticket because you just don’t know what you’ll end up with.