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  • Writer's pictureLarry Lustig

Insuring Your Code in a Castle Trip

Travel is expensive. Things happen. The nexus of those two truisms is where you'll find travel insurance. This article is a basic introduction to travel insurance and how you can use it to protect yourself against loss in the event of a problem with your Code in a Castle trip.

Travel insurance is intended to protect you against forfeiting money in the event that you're unable to take a planned trip, or something goes wrong during the course of a trip. It covers things like flight cancellations or delays, theft, medical emergencies, or outright cancellation of a trip (by you, or the travel supplier).

Like any other legal contract (or financial instrument), there are a lot of details involved in buying travel insurance. Please read the terms of whatever insurance you're considering very carefully and if there's something you don't understand, ask the insurance provider for clarification — before making the purchase. I once saw someone on the internet answer a question about travel insurance by saying "Just call your insurer and they'll help you." That is not the way travel insurance works! Instead, you'll be helped only to the extent required by the coverage you bought and subject to specific reporting requirements. They'll still explain what the terms meant but they won't waive them or find some other way to reimburse you. At that point, you're stuck.

Also, please note — no one at Code in a Castle has a background in insurance. This introductory post is a guide only!

I want to talk about two kinds of insurance (paid plans, and "free" insurance provided by some credit cards) as well as another form of compensation that applies when traveling in, from, and (sometimes) to the European Union.

Paid Insurance Plans

You can purchase paid travel insurance plans from various suppliers. These are an additional cost for your trip, but can give you peace of mind. In the event of something going wrong before or during the trip you can be reimbursed some or all of your costs.

Policies are available on a single-trip basis or on an annual basis covering a full year of travel. Most insurers have different policies covering different types of "hazards" and paying out for different types of bookings or activities. In addition, each policy will have maximums for different types of reimbursements (maybe $10,000 for trip cancellation, $50,000 for emergency medical treatment, and $1,500 for lost baggage, for instance).

In general, you'll want to make sure that travel supplier "default" is a covered "hazard" on the policy. In plain language, "default" means that the travel supplier is unable to provide the scheduled program and unable or unwilling or refund your money. This usually means that the supplier has dissolved into insolvency. There have been some spectacular corporate flame-outs in the bulk tourism industry over the last few decades. So make sure that your policy covers travel supplier default and that the maximum reimbursable amount covers your entire outlay.

Of course, at Code in a Castle, we have no plan to default on our programs. We don't even want to imagine the possibility because it would certainly mean that death or severe illness is involved. But just because we don't want to think about it doesn't mean you shouldn't be thinking about it! So, please, insure yourself!

Insurance coverage for defaults, and certain other hazards, generally don't kick in for some period of time, such as fifteen days. This means you can't buy the policy after the hazard has occurred, you have to do it at least fifteen days before (when, presumably, you don't have any knowledge about an upcoming problem).

Some policies during the pandemic began excluding COVID in particular from the list of covered hazards (that is, they'd cover you if you canceled due to injury or illness, but not COVID). If having to cancel due to COVID is a concern, make sure it's not excluded by your policy.

Finally, some insurers offer "cancel for any reason" policies. With these policies, you're not limited to a list of reasons you're "allowed" to cancel the trip. These policies cost a great deal more and have a waiting period before you can claim on them but they provide the ultimate flexibility.

Credit Card Insurance

If you're an experienced traveler you probably know that some premium credit cards include travel protections. This insurance is generally much more restrictive than a policy you pay for directly from an insurance company, with lower limits and additional requirements. For instance, you're generally required to have used the credit card to pay for a round-trip itinerary with a maximum of 30 or 60 days away from home.

This kind of insurance is mostly useful in the case of airline delay or cancellation and you need to book a hotel room and buy meals at your own expense. It is not sufficient to cover a program like Code in a Castle.

EU 261 Compensation

The European Union imposes certain consumer protections that we're not familiar with in the United States. The United Kingdom also has a similar law.

Under EU 261, in the event that your flight is delayed beyond a certain number of hours, and the delay is within the control of the airline (maintenance, insufficient crew, and so on) you are entitled to cash compensation from the airline to compensate you for the extra time spent. This is different from insurance that reimburses you for real costs you incurred. EU 261 gives you real money, even if you experienced no actual loss from the delay.

In general you can claim the payout on any flight inside the EU and UK, any flight departing from the EU and UK, and any flight going to the EU and the UK that is operated by a EU based carrier. Therefore, there's a small advantage of flying from the US or Canada using an EU based carrier. If you're delayed, you may be entitled to cash compensation.

Forbes has a good write-up of the EU 261 compensation laws here:

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