Should you buy travel insurance directly from an airline?

George Hobica, July 11, 2008
Fares from Washington DC, District of Columbia:

    You've probably been enticed to buy travel insurance directly from your airline or online travel agency. It seems relatively cheap and easy, but what kind of protection do you actually get? As with all things, you get what you pay for. Airline-sold policies, even if underwritten by a major travel insurer such as Access America, isn't the same thing as buying insurance directly from the travel insurer underwriting the policy. For instance, buy from the airline and you won't get protection if your airline goes belly up. And in general, pre-existing medical conditions are not covered, as the chart below shows.

    Sample travel insurance coverage bought directly from airlines and online travel agencies

    Source Underwriter Typical cost per ticket

    Cancel/interruption coverage

    Covers airline default? Covers pre-existing condition?
    Spirit Airlines Insure America $12 $300 no no
    AirTran Stonebridge $14.99 $300 no no
    Travelocity BerkleyCare $15.95 $500 no no
    American Airlines Access America $18.75 up to $3000 no waiver at additional cost

    Buying from the source

    Buying insurance directly from the travel insurance companies themselves, although more expensive, offers better protection, but there are still many exceptions and loopholes.

    AIG My Travel Guard

    Sample cost:  $35 (approx, varies with cost of trip, age, other factors)
    Cancellation/Interruption: Entire quoted trip cost
    Default/Bankruptcy coverage:     Yes, with upgrade
    Pre-existing condition waiver: Included in upgrade
    Medical expenses: Extensive, can purchase additional upgrades
    Good to know: AIG sells a flight insurance policy as well, for prices more in line with what you pay via a third-party (under $20).

    AccessAmerica Classic with Trip Cancellation   
    Sample cost: $40 (approx, varies with cost of trip, age, other factors)
    Cancellation/Interruption: Entire quoted trip cost   
    Default/Bankruptcy coverage: Yes, 7 days after policy start    
    Pre-existing condition waiver: Yes, with restrictions   
    Medical expenses: Extensive
    Good to know: Access America sells a more affordable policy comparable to the third parties but with beefed up medical coverage, sample cost $22.