Oil spill likely won't lead to refunds

I'm thinking about a vacation on the beaches in Florida, but with the oil spill, I don't know. If I buy travel insurance will it cover some of my expenses — such as airfare — if the beach is spoiled by the oil and I cancel the trip?

No, standard travel insurance won't. But if you buy the "cancel for any reason" coverage it would to some extent.

The bottom line is that most standard travel cancellation policies will cover losses caused by natural disasters, like hurricanes, volcanic ash and blizzards, etc. And the oil spill, even though it's gigantic, is a man-made disaster, which experts say isn't a covered reason.

The hard facts of the insurance business are that in any policy, you collect on trip cancellation only for what is called a covered reason. So to be sure of any coverage, you have to read the fine print.

Complications from natural disasters, which often close airports, are covered. In contrast, airports are not affected by the oil spill and as a result a traveler who elects to cancel a flight to a beach destination because of the oil spill will likely have to swallow any nonrefundable fares and pay rebooking fees.


There is an option though, if you want to pay the price. Travelers can consider buying "cancel for any reason" travel insurance as an alternative to more restrictive standard policies.

While standard travel insurance typically costs about 5 percent of the price of the trip, the "cancel for any reason" policy generally costs 50 percent more, or about 7.5 percent of the total cost. Older travelers usually face higher premiums.

A few caveats though: Cancellations generally must be made more than 48 hours before departure and "cancel for any reason" policies only reimburse up to 75 percent. Some policies, we're told, do offer an upgrade up to 90 percent of loss, if you pay an extra premium.

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