Job-loss policies let travelers book without fear
— -- There's no question the travel industry is hurting big time. As if enduring the most severe recession in generations weren't enough, the H1N1 crisis further dampened advance bookings. So the threat of rising unemployment is taken as much more than a threat by many travel executives.
Thus the emergence of a term you might not have encountered very much in the past: Job Loss Protection. It's why so many travel companies are reassuring you it's okay to book that vacation, even if you're worried about losing a steady paycheck, because your booking will be covered.
In some cases, you can purchase such protection as part of a travel insurance policy. In other cases, travel suppliers—including those that sail as well as fly—are pledging to offer assistance if you suddenly find yourself unemployed.
Burgeoning interest
You can see how poorly the economy has been performing just by viewing all the job loss ads on the home pages of many travel insurance company sites. But those banners carry some good news, in that several of these firms have loosened restrictions on job loss coverage lately, such as shortening the window on how long you need to have worked for the same employer.
John Stone, a spokesman for Travel Insured International, explains, "We found that in the past six months—especially since the financial markets collapsed last fall—job loss protection has become a much more frequent top of mind issue for travelers shopping for travel insurance." He says the decision to amend his company's Job Loss Prevention coverage to allow for a one-year employment clause was influenced in part by increased consumer interest.
So while travel companies have made consumers more aware of job loss, has this translated into more purchases of such coverage? Linda Kundell, a spokeswoman for the U.S. Travel Insurance Association (USTIA), reports, "Anecdotally I've been told that yes, there appears to be an increase in claims and interest related to job loss benefits."
Dan McGinnity, vice president for the insurance firm Travel Guard, says the decision to revamp his company's job loss coverage in March was driven both by consumer demand and feedback from travel industry partners. He notes, "It's one more concern that a consumer doesn't have to worry about." While he advises he can't provide specific sales data on job loss coverage, McGinnity does say, "Certainly we've gotten a great deal of reception. But we haven't seen a great impact yet from a claims standpoint."
In addition to travel insurance providers, other travel companies are offering various job loss programs as well. JetBlue has generated media attention, as has Norwegian Cruise Line. Back in February, Laura Bly provided details about Norwegian's program on this site.
It's also important to realize that some coverage provides cash reimbursement, while other coverage provides credit toward postponing—not canceling—your trip. Obviously this is critical, since many consumers facing sudden unemployment are much more concerned about cash flow than vacationing. "There's a big difference," McGinnity points out. "With a refund you can use it for groceries or your mortgage."
Travel insurance options
If you're worried that your employment status could affect your next big trip, contemplating job loss insurance may make sense for you. But there are a few points to consider. Such coverage is nearly always bundled into comprehensive travel insurance policies and usually you will not find it sold as a stand-alone product. Also, it's imperative that you understand the fine print, since rules vary, not only among competing insurance firms but even among separate policies sold by the same firm. Pay particular attention to clauses pertaining to how long you were employed, how you lost your job, when you must file a claim, and how and when that claim will be processed.
It's important to note that not all "Cancel for Work" policies include provisions for terminations or layoffs, so dig down into the details. That said, the USTIA points out travel policies can be tailored for a variety of work-related situations, including:
• You or the person with whom you are sharing a room during travel are terminated from employment
• You or a business partner become ill or are injured
• You or your traveling companion are notified of a job-related relocation
On the other hand, in some cases the specifics of your employment might not matter if you opt for a more comprehensive—and therefore more expensive—policy that provides a "cancel for any reason" clause. But such products can become pricey, and may not be right for many travelers. Some insurance companies also offer business travel policies as well.
You also should note the following advice from the Insurance Information Institute: "Trip cancellation insurance coverage is different from the cancellation waivers that many cruise and tour operators offer because waivers are not insurance. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip but they have many restrictions. Moreover, cancellation waivers are not regulated by state insurance departments so if your tour or cruise operator gets into financial difficulty, you may not be able to collect whatever monies you have already given them."
Another key point: Consider not only the coverage you're purchasing, but also where you are purchasing it. Many travel insurance companies sell their products both directly to consumers as well as through third parties such as travel agencies, tour operators, and travel suppliers. For example, McGinnity advises there's no danger in buying a Travel Guard policy through a travel agent, since even if the agency goes bankrupt you'll still be covered. But he warns that buying through a travel supplier such as a cruise line could be risky, noting that some consumers were hurt in this way when Renaissance Cruises stopped sailing in 2001.
And as with any insurance product, there's always the risk of paying twice for the same coverage. Chris Harvey, CEO of Squaremouth, a travel insurance comparison site, recently issued a statement that noted: "If travelers didn't know the ins and outs of 'layoff insurance' they could wind up paying extra for coverage that was already included in standard policies."
Popular choices
For an extensive list of links to major travel insurance companies, visit the USTIA's membership roster at ustia.org. The following is a brief rundown of what some leading firms are offering in this arena:
• Access America. With "Cancel Anytime" coverage, you can receive up to 100% reimbursement for calling off your vacation. Coverage for terminations or layoffs requires 1) that you must have one year of continuous employment with the same employer and 2) that your termination or layoff was not for cause. In a statement issued in April, an executive with Access America noted, "It's understandable that even financially secure families and individuals might fear the unexpected in this economic environment, but with Cancel Anytime, there's little reason to postpone booking a vacation."
• CSA Travel Protection. Both the Trip Cancellation and Trip Interruption plans provide for involuntary terminations or layoffs, as well as transfers beyond 250 miles. I downloaded a sample policy that requires employment with the same employer for three continuous years.
• Travelex. This company recently amended coverage in its trip cancellation and trip interruption benefits, by reducing the length of employment with the same employer to one year. This applies to all policies with departure dates through Dec. 31, for five separate products: Travel Basic; TraveLite; Travel Select; Travel Plus; and Travel Max.
• Travel Guard. Plans offered by this firm impose no limitations on departure dates and also require only a one-year employment clause for terminations and/or layoffs. This modification was introduced in March and applies to Travel Guard's four "core plans" known as Basic, Silver, Gold, and Platinum.
• Travel Insured International. In March, this company expanded Job Loss Protection across its Worldwide Trip Protector products. Consumers can choose 1) a Cancel for Work Reasons package, optional at $24, with coverage for those employed for one year or 2) standard Job Loss Protection with a three-year employment clause. Travel Insured allows trip cancellations for a broad range of work-related issues, including a documented work conflict; a company has been made unsuitable to do business due to a natural disaster, vandalism, or burglary; a company is involved in an acquisition in which the insured is directly involved; or the insured's job has been relocated 250 miles or more.
Other options
As noted, job loss protection is not limited just to travel insurance companies now. A variety of travel companies are either touting refunds or waiving cancellation penalties for later rebookings.
In February, Norwegian Cruise Line enhanced its BookSafe Travel Protection Plan to cover customers who lose their jobs prior to their sailings. For the cost of the plan, coverage now allows would-be guests to receive reimbursement of their "prepaid, non-refundable trip costs" for canceling.
Other cruise products are being offered through booking channels such as travel agencies—both offline and online. For example, effective March 1st, the booking site CruiseOne's CruiseAssurance product began providing coverage for job loss and layoff in its trip cancellation plan. Sister company Cruises Inc. provides similar coverage.
One option that has garnered quite a bit of attention is the JetBlue Promise Program, which was recently extended through Dec. 31. All passengers are covered at no cost, though there is a $100 cancellation penalty if the airline determines your claim is not worthy. It provides full refunds for air-only bookings as well as JetBlue Getaways vacation package purchases; customers must have "involuntarily" lost their full-time jobs on or after Feb. 17th for flights and March 17th for packages, and no length of employment clause is included. Here are the details and caveats.
And the initiatives aren't limited to traveling. SkyRoll, a luggage maker, is offering a 50% discount on its garment bags if you fax a copy of your layoff notice on your former company letterhead.
Travelers, have you had the occasion to use a job-loss policy? Tell us how it went.
Bill McGee, a contributing editor to Consumer Reports and the former editor of Consumer Reports Travel Letter, is an FAA-licensed aircraft dispatcher who worked in airline operations and management for several years. Tell him what you think of his latest column by sending him an e-mail at USATODAY.com at travel@usatoday. Include your name, hometown and daytime phone number, and he may use your feedback in a future column.