Trip Delay, Trip Interruption, Missed Connection. What's The Difference?
It used to be that if your trip was disrupted your situation was either a trip delay or a trip interruption. The trip delay benefit was to reimburse you for additional needed expenses until your trip could continue -- hotels, meals, phone call, and the like. The trip interruption benefit did two things for you: #1 it would reimburse you for any pre-paid trip arrangements you're forfeiting because of the interruption and #2 it would also pay for additional transportation expenses needed to either catch up with your trip or to return home.
So if your return flight home after your cruise is cancelled and now you need a night's hotel and meals that would be covered by the trip delay benefit. But if your flight to the cruise is cancelled and you miss the ship you'll also have a trip interruption claim for the cost of flying to the next port of call plan plus the value of the day(s) of the cruise you've missed.
Recently some of the insurers have come up with a third (and sometimes fourth) possible coverage for these types of situations -- Missed Connection Coverage and, less commonly, Trip Interruption -- Return Air Only Coverage. What's the difference?
Here's the possible coverages from one plan. We'll use the example of a traveler flying in to Miami to catch a seven night cruise. His flight is cancelled due to mechanical problems and he arrives at the port eight hours late and misses the ship. He needs one night's hotel in Miami, the flight out the following morning and expects to be reimbursed for missing 1/7th of his cruise. What coverage(s) would apply
First the trip interruption coverage. Here's some of the airline-related covered reasons that would invoke this coverage
(c) Financial Default of an airline, cruise line, or tour operator provided the Financial Default occurs more than 14 days following an Insured's effective date for the Trip Cancellation or Trip Interruption Benefits. There is no coverage for the Financial Default of any person, organization, agency, or firm from whom the Insured purchased travel arrangements supplied by others. This coverage applies only if insurance was purchased within 15 calendar days of Initial Trip Payment;(d) Inclement Weather causing delay or cancellation of travel;
(e) Strike resulting in complete cessation of travel services at the point of departure or Destination
(n) mechanical/equipment failure of a Common Carrier that occurs on a scheduled Trip and causes complete cessation of the Insured's travel and results of a Loss of 50% of the Insured's Trip length;
So we know the trip interruption benefit will be no help in this case -- although mechanical problems with the airplane can be covered he isn't losing 50% or more of the length of his cruise. What about the trip delay coverage?
Insurer will reimburse the Insured up to the Maximum Limit(s) shown on
the Schedule for Reasonable Additional Expenses until travel becomes
possible if the Insured's Trip is delayed 5 or more consecutive hours
from reaching their intended Destination for one of the Unforeseen
events listed below:
OK, it looks like this benefit will be of some help. It will cover the hotel and meals until the flight leaves in the morning. With this plan the maximum benefit is $1,000 with a daily limit of $200. But what about the cost of the flights and the value of the missed day(s) of the cruise?
Missed Connection coverage might be the best match for this loss:
while on a Trip, the Insured misses a Trip departure resulting from
cancellation or delay of 3 or more hours of all regularly scheduled
airline flights due to Inclement Weather or Common Carrier caused
delay, the Insurer will reimburse the Insured up to the Maximum Limit
shown in the Schedule for:
The Common Carrier must certify the delay of the regularly scheduled airline flight.
Coverage is secondary if reimbursable by any other source.
This perfectly describes what has happened and what is needed -- the delay was more than 3 hours, it was a Common Carrier-caused delay, and it will cover the cost of the air flight and the missed portion of the cruise. Combined with the trip delay coverage taking care of the hotel and meals everything is covered. The problem here is that the maximum coverage amount for the Missed Connection coverage with this plan is very low -- only $500 per person. Would that cover a last-minute, one-way air ticket plus the value of the missed portion of the cruise? Maybe yes, maybe no. Other plans offer up to $2500 per person for this benefit which we feel is a more realistic amount. Hopefully, since this loss began with them the airline will cover the cost of the additional flight, but maybe not. If not, $500 may not cover this cruiser's total loss.
For problems that happen in the middle of your trip the trip interruption benefit will probably be the most important to you. Perhaps that same cruiser made it to the ship on time but became ill halfway through the cruise and needs to return home. Again, the trip interruption benefit will cover the cost of the air ticket and refund him for the value of the days on the sip that he's forfeiting. In almost all plans, this benefit has a limit based on some percentage of the trip cost that was insured for cancellation -- 100%, 125% or 150%. So if this cruiser insured $2500 for trip cancellation his trip interruption benefit will be $3750. Why so much? The insurers realize that a trip interruption can end up being a larger loss than a trip cancellation. A last-minute, one-way air ticket home from some remote location can be very expensive so they give you this extra cushion.
Perhaps you don't see a need to insure your trip for trip cancellation. With most plans this also means you won't have a trip interruption benefit either as the trip interruption benefit is some percentage of the trip cancellation coverage -- 100% to 150%. However, some insurers have come out with a "Trip Interruption -- Return Air Only" benefit which can help. The benefit limit will be stated as a dollar amount -- with this plan it's $1000 -- rather than as a percentage of the trip cost insured for cancellation. So even if you insure a $0 trip cost you still have that $1000 benefit. However, this will not reimburse you for any missed trip arrangements -- if you didn't feel the need to insure them they won't either. They'll only pay for up to $1000 of the transportation costs needed to get home or to catch up with your trip.
As you can see, these coverage all have different benefits, coverage limits, and reasons to invoke the coverage. If we change the events in that example -- make it a weather delay instead of mechanical or make the delay only four hours instead of eight -- you'd come up with a completely different set of possible coverages. If you're worried about missing your tour or cruise departure when you're choosing a plan try to estimate what it would cost you if things go wrong and choose a plan that meets those needs.