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Travel insurance doesn’t always make sense, consumer group says

Most travel-insurance companies won't disclose how much they pay out on claims, making it nearly impossible to judge whether the coverage is worth the money, a consumer group says. Above, Hartsfield-Jackson Airport in Atlanta.
(David Goldman / Associated Press)

After a nasty storm ripped through the East Coast on the busiest travel day of the year, you might think that buying travel insurance for holiday travel would be a no-brainer.

Not so much. The 114-year-old National Consumers League concluded recently that travel insurance is usually a bad deal because most policies are riddled with exceptions that allow insurance companies to reject claims for payoffs.

Most insurance companies won’t disclose their track record for paying out claims, making it nearly impossible to judge whether insurance is worth the money, the league says.

“The unfortunate reality is that these protection policies bring in big bucks for the airlines each year but offer very little real value for customers,” said Sally Greenberg, executive director of the National Consumers League.

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The most common exceptions used by insurance companies to reject your payout are illnesses involving a preexisting medical condition, pregnancy or childbirth, losing a job or having a business meeting canceled, according to the league. Some policies won’t pay out even if your trip is canceled because of nuclear contamination or terrorist attacks.

The U.S. Travel Insurance Assn. disagreed with the consumer league’s conclusion, saying those policies that are rife with exceptions are usually less expensive than more comprehensive policies with fewer exceptions.

Still, association spokeswoman Linda Kundell added: “There is no insurance that covers everything under the sun

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