Allianz Annual Travel Insurance

Earlier this month, I wrote about our experience in year one with an Allianz annual travel insurance policy. At the time, we had a third claim pending for another canceled flight and were waiting for the conclusion of that claim to decide whether to renew. Here is the update on Claim #3 and our decision whether to renew our Allianz annual travel insurance policy.

Claims During the First Year

As mentioned previously, we filed 3 claims in our first year with Allianz travel insurance:

• A COVID-positive test resulting in cancelled flights, hotel rooms, and new flights-resolved successfully
• A weather-related flight cancellation to California resulting in booking new flights to arrive 36 hours late-resolved, but not for the entire amount
• A weather-related flight cancellation home from the ToP Meetup: DFW resulting in an additional hotel night, meals, and an extra rental car day-pending

Update on Claim #3

On May 24, 2023, 18 business days after I submitted the claim, we received notice that Allianz was not paying our claim. The stated reason was that we “have exhausted your annual limit of liability…” How could this be? We are covered for up to $2,000 for Trip Interruption and/or Trip Cancellation. With this denial in hand, I dug into the terms & conditions of our policy before calling Allianz to dispute this result.

Terms & Conditions of our Policy

I spent over an hour combing through the terms of our Allianz annual travel insurance policy. Nowhere could I find the explanation of limits for trip interruption and trip cancellation. The stated limits were “$2,000,” without clarification of per policy year or per claim or per insured. Feeling frustrated, I decided to do a mock renewal of our policy and see what I could find. Sure enough, the answer was immediately apparent.

Despite all other categories of coverage having stated limits of “per insured, per trip” or “all insureds, per trip,” the stated coverage for Trip Cancellation and Trip Interruption, is limited to “per policy, per year.” That's right, folks. The single most important piece of insurance coverage in these plans is a single cap on an annual basis. Notably, the standard coverage offered is only $2,000, which wouldn't cover a single trip for most couples or families. Think about it: you file a trip interruption/trip cancellation claim of $2,000 or more and your mid-tier Allianz annual policy covers NOTHING in these categories for the rest of the policy year.

Is this policy limitation in writing? Yes, it is found at the time you are quoting policies. But I am unable to locate this significant policy limitation ANYWHERE in the actual policy documents.

So now it all makes sense for us: our 2nd claim was not fully reimbursed, as I questioned in my original post, and claim #3 was denied entirely because we hit the $2,000 annual cap on trip cancellation/trip interruption on claims #1 and #2. Frankly, with a $2,000 annual cap, it seems almost impossible for couples or families to NOT hit his cap each year, with severe weather occurring more frequently, the travel industry still adapting to the post-pandemic environment, etc.

Our Final Renewal Decision

Based on this claim resolution, I did ultimately renew our Allianz annual travel insurance policy. But I increased our Trip Cancellation/Trip Interruption coverage to $5,000 per year. This increased our policy cost from $485 to $715 for 2 travelers. This increase was not exorbitant, considering we increased our coverage by 150%.

However, it is extremely frustrating that: 1) the stated limits are not more clearly defined in the actual insurance policy delivered to insureds, and 2) the initial coverage option of $2,000 is woefully inadequate for most everyone.

Allianz Annual Travel Insurance Policy: ToP Thoughts

First, I find the Allianz Trip Cancellation/Trip Interruption policy limitations of up to the stated maximum per policy, per year to be woefully inadequate for most travelers. Couples and families especially should consider increasing the coverage from $2,000 to $5,000. Of course, this comes with increased costs. Second, I am very frustrated that no policy documents sent to insureds have any stated limitations on the coverage. It is ridiculous that all other forms of coverage limitations are “per trip” (and usually “per insured, per trip”), yet Allianz does not warn its customers in the policy that the trip cancellation/trip interruption stated limits are per policy year.

Learn a lesson from my mistakes and read those insurance policies carefully. You never know what the terms & conditions say until you actually read those terms & conditions. Have you had a similar issue with travel insurance? Come over to our Facebook group and let us know.