The several big recent storms—and the many airline cancellations that resulted—raise the question of the extent to which travel insurance can help to recoup your travel investment. The short answer is that at least some of it does, at least sometimes. But you find lots of variation: Policies vary substantially in what they specify as "covered reasons" to provide payment. So you have to take a close look at the fine print, as well as the price, before you buy. Three different coverages apply.

Trip Cancellation/Interruption (TCI): TCI covers whatever expenses, caused by delay or cancellation, that you can't recover from your airline or hotel. TCI policies typically include a laundry list of "covered reasons" that qualify for this benefit, and almost all include at least some coverage for weather-related delays and cancellations:

  • Better policies promise, simply, that the insurer will pay, in the words of a top policy, because of "inclement weather causing delay or cancellation of travel." That's pretty straightforward: If weather cancels or delays your trip, the insurer pays.
  • At the other end of the spectrum, other policies hedge their coverage. Quite a few pay the cancellation only for a delay lasting at least 24 hours; quite a few also limit payout to "weather that causes complete cessation of services of your common carrier for at least 24 consecutive hours."

According to John Cook, president of QuoteWright, the online travel insurance agency, "total" doesn't mean that an airline has to shut down its entire system; it refers to service in the areas on your itinerary. Still, "complete cessation" is an unsettling loophole.

As I noted in an earlier column, airlines almost always waive ticket-change fees and fare increases for travelers on canceled or delayed flights and allow them to rebook on later—and sometimes earlier—flights. But those waivers severely limit the time frame to rebook and the time frame to take an alternate flight. If you can't, or don't, want to rebook and fly within those narrow limits, you face the likelihood of a change fee, a fare increase, or both. And airlines don't let you rebook to a different city, even if it's relatively convenient: Milwaukee instead of Chicago, for example, or Sacramento instead of San Francisco.

Delay: Most bundled trip insurance also includes a "delay" benefit: payment that covers your incidental expenses when you're caught in a delay. As with TCI, delay coverage kicks in for a variety of circumstances, such as a traffic accident en route to a terminal or a natural disaster, and most include delays due to weather.

Typically, airlines are not responsible for covering food and lodging expenses you incur due to a weather delay, a hole that travel insurance can fill. Typical coverages range from $100 to $250 per day; most establish a minimum time threshold of five to 12 hours. If you want this coverage, look for a policy paying at least $200 a day; $100 is not likely to cover an overnight stay plus meals. But many credit cards provide similar delay benefits at no cost, so you may not need a separate policy.

Missed Connection: Many bundled policies also cover cases where you miss a connection. As with delay coverage, policies vary: Total benefits range from $250 to $2,500, most policies are limited to connections missed by three hours or more, and some low-end policies don't cover missed connections at all. Normally, airlines take care of missed connections due to weather; this coverage is geared more to missing cruise and tour departures, but it can also apply to separate-ticket flights on different airlines.

QuoteWright has posted a comprehensive table listing weather-related benefits and limits for 32 different policies from all the big suppliers. It also shows QuoteWright's rating of those policies for their weather coverage: Top-rated policies include Travel Insurance Select from USI, CSA's Custom Luxe, and Travelex's Travel Max. Cook says that although the table is labeled as being a "beta," it's ready for use by the traveling public. If you're considering weather insurance, take a look.

Ed Perkins on Travel is copyright (c) 2013 Tribune Media Services, Inc.

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This article was originally published by SmarterTravel under the title Does Travel Insurance Cover Weather Problems?

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