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    Why Trip Cancellation Insurance Provides Peace of Mind
    Posted: 2010-08-12 09:20:13

    This post is part of our series on travel and the law. Be sure to check out Part 1.

    When planning your next summer vacation, you might consider trip cancellation insurance as part of the package. The fee is usually small compared to the price of a travel package and the peace of mind these plans provide might be worth the price.

    Trip cancellation insurance plans will usually reimburse your non-refundable prepaid travel arrangements should you need to cancel your trip before departure as a result of death, injury, or sickness to yourself or to a family member. As straightforward as this may sound, there is one potential drawback – the insurance company may refuse to pay your claim.

    Consider the case of Kathy Porritt, whose story was reported in the Toronto Star.  She filed a lawsuit in Small Claims Court and received a settlement after her insurance company failed to follow through on the policy’s stipulated coverage.

    Not long after purchasing a vacation package that included trip cancellation insurance, Kathy’s sister was diagnosed with breast cancer. As a result, Kathy and her sister cancelled their trip in order to concentrate on the situation at home.

    Unfortunately, the insurance company refused to cover Kathy’s costs on the grounds that her sister's medical condition was not stable at the time the trip was booked. According to the policy definition, a stable medical condition is one in which "there has been no admission to a hospital and/or you are not awaiting results of further investigation for that medical condition”.

    In reality, Kathy Porritt’s sister had a mammogram before they purchased the insurance, but was not diagnosed until after they paid for their vacation.

    If you’ve experienced a small claims matter, then the rest of Kathy Porritt’s story will seem familiar to you.  Kathy hired a lawyer, who contacted her insurance company without success.  Her lawyer then filed a small claims lawsuit.  In response, the company sent Kathy Porritt a statement of defence.  They also sent her a cheque to cover her husband’s costs for the trip. In the end, after the settlement conference, the insurance company reimbursed Kathy and her family for their airfare and the court costs incurred as a result of the claim.

    Kathy Porritt and her lawyer never saw the inside of a courtroom. The insurance company’s spokesperson, Tom Nunn, said that threat of litigation was not an issue in settlement.  Nevertheless, by initiating a lawsuit, the insurance company was forced to respond and within 20 days Kathy had her first claim cheque in hand.

    Here are a few things to keep in mind when deciding whether to include trip cancellation insurance with your vacation package.

    • Read the fine print so you know what to expect should the unthinkable happen.

    • Shop around for the best plan for you and the most reasonable insurance company, not just the least expensive or one that your travel agent recommends.

    • If you need to cancel your trip, first speak to the insurance company directly. You may be able to resolve the matter amicably, thus saving you time, money and frustration. But in those cases where you are unable to come to an understanding with the other party, the only recourse available may be to allow a court of law to decide the dispute for you.

    You may not totally prevent a situation like Kathy Porritt’s; but with a little homework you can be better prepared.

    Although My Legal Briefcase takes every reasonable effort to ensure that the information on our website and documents are up-to-date and legally sufficient, My Legal Briefcase is not a law firm, and the employees of My Legal Briefcase are not acting as your attorney.

    Photo by Denise Kappa/

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