Time to Read the Fine Print on Travel Insurance

Buyers of travel insurance are advised to check their policies carefully: There are major changes afoot, some favorable to consumers, some not, in the wake of the Sept. 11 attacks.

One big insurer, San Diego-based CSA Travel Protection, imposed an “indefinite moratorium” on covering financial default by travel providers on Oct. 5, said Claudia Fullerton, chief marketing officer, so if your cruise or airline company goes bankrupt, your policy won’t reimburse you. She said CSA’s underwriter made the decision because of “the instability in the travel industry”; she also cited millions in payouts CSA expects to make on claims by customers of Renaissance Cruises, which abruptly ceased operation last month.

Travel Guard International, a Wisconsin company that says it handles about 40% of the U.S. travel insurance market, has raised premiums by about 10% since the attacks, said spokesman Dan McGinnity. Effective Sept. 21, it also began to cover terrorist incidents in the U.S. and abroad; most insurers cover only foreign incidents. Under the policy, customers can be compensated if they cancel a trip that would put them in a city within 30 days after a terrorist incident there.

McGinnity said his company, as of Monday, was still covering financial default, but he added that CSA’s move may force competitors to choose between dropping coverage and raising premiums.

Insurer Stops Writing Policies on 2 Cruise Lines

Travelex Insurance Services of Omaha, Neb., has stopped writing travel insurance policies for American Classic Voyages Co. and Royal Olympic Cruises.

Vice President Sally Dunlap said the company took the action Sept. 28 after its underwriters reported “a high risk of financial debt” associated with the two cruise companies. She declined to be more specific. On Oct. 3, Travel Guard International also stopped writing policies for Florida-based American Classic Voyages, which operates Delta Queen Steamboat Co., Delta Queen Coastal Voyages and two Hawaiian cruise operators, United States Lines and American Hawaii Cruises.

American Classic issued a statement Tuesday saying it was “disappointed” by the insurance companies’ actions and was “working to address and allay any concerns.” It also said it would cancel 27 cruises on its two Delta Queen lines this year and next, starting with the Nov. 3 sailing of the Cape May Light from Philadelphia.

Arne Egeland, executive director in New York for RO Cruises Inc., sales agent for Athens-based Royal Olympic Cruises in North America, expressed surprise at Travelex’s action, saying his company “most definitely” is financially sound.

U.S. Travelers Advised to Exercise Caution

Citing the possibility of “strong anti-American sentiment and retaliatory actions against U.S. citizens and interests” after the U.S. military action in Afghanistan, the State Department on Oct. 7 issued a “worldwide caution” advising U.S. travelers abroad to monitor local news and “limit their movement in their respective locations.” Telephone (202) 647-5225, Internet https://www.travel.state.gov.

Tourism Downturn Takes Toll on Foreign Airlines

The downturn in travel is taking a toll on foreign-based as well as U.S. airlines. Among them:

* Swissair suspended operations and left thousands of travelers stranded Oct. 2 and 3 after running out of cash while awaiting a bailout loan. On Oct. 4, it began flying again, on a reduced schedule. As of last week, regional carrier Crossair was scheduled to take over Swissair’s flights Oct. 28.

* Sabena has dropped money-losing routes, including service to Washington, D.C. A bankruptcy court has given the Belgian government, Sabena’s main shareholder, two months to turn the company around.

* Aer Lingus may run out of cash as early as January, the Irish government reported Oct. 4. Public Enterprise Minister Mary O’Rourke said European Union rules bar government aid. Last week, the EU was scheduled to reconsider those rules.

Times Wire Services

Traveler’s Notes ...

Thirty-five cases of dengue fever, up from 19 the previous week, had been confirmed in Hawaii as of Monday, the Associated Press reported. They included a case on the island of Kauai, the first one outside eastern Maui. Health officials have advised visitors to guard against bites from mosquitoes, which spread the nonfatal but serious disease.... The Open House and Air Show scheduled for Oct. 20 and 21 at California’s Edwards Air Force Base has been canceled, the base announced.

Compiled by Jane Engle