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Published 12:29 PM EDT Aug 18, 2019

If you don't know the difference between travel insurance and trip protection, talk to Christopher Benson. He learned about that the hard way.

When Benson and his wife, Betty, planned a trip to Paris, Orbitz offered them a 'vacation waiver' option that looked a lot like travel insurance. But when the Bensons tried to invoke the waiver, it didn't work as they expected. Lufthansa would not refund their tickets from Chicago to Paris.

'I feel I've been duped,' says Benson. 'They offer a vacation waiver, which does not seem to work.'

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Technically, the Orbitz vacation waiver isn't insurance. It's an add-on product that allows you to change or cancel your trip for any reason, with Orbitz waiving any cancellation fees and refunding any amounts refunded by the travel provider. It also offers a travel credit, good for a future trip.

Benson's confusion is common. Travelers who want to protect their trip may be considering insurance and tempted to buy a less expensive waiver or trip protection plan. But there are important differences worth knowing.

“Travelers do not understand the difference between travel protection versus travel insurance,' says John Lovell, Travel Leaders Group's president for leisure travel, supplier relations and networks. 'Many times these terms are used interchangeably from one provider to another.'

What you need to know about trip 'protection'

Benson's request took a tragic turn when his wife passed away, leaving him with vouchers he wouldn't use. I contacted Orbitz on his behalf, and the company negotiated a full refund with Lufthansa.

But Benson is hardly the only traveler surprised by protection. James O’Connor, an attorney with the Nickless, Phillips and O'Connor in Fitchburg, Massachusetts, has filed a lawsuit against river cruise company Vantage Travel for selling a travel protection plan that promised to cover passengers for a mechanical breakdown that causes a complete cessation of services for at least 12 consecutive hours. O'Connor says Vantage did not honor the claims.

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'This travel protection appears to be a rip-off,” he says.

Vantage says there was no cessation of services by the 12 consecutive hours. 'The vessel was used as a hotel, with meals and all other shipboard activities,' says Gary Greenstein, Vantage's chief financial officer. He noted its protection policy also contained a ‘‘cancel for any reason’’ provision that allows passengers to cancel their vacations before their trips.

'We think the plan is a very good one and well worth travelers considering its purchase,' he adds.

How trip protection has changed

Products such as waivers and protection are not the same thing as insurance. But they're more similar today than ever.

'In the past, trip protection could look a lot like travel insurance when sold by cruise lines or tour operators – except that it wasn't,' explains Stan Sandberg, co-founder of TravelInsurance.com, a travel insurance website.

Travel insurance is an actual insurance product underwritten by large insurance companies and regulated by state insurance agencies. But trip protection plans were much riskier propositions and could be full of exclusions. A trip protection plan might only cover a portion of the trip and not reimburse you for a cancellation but instead issue you a credit for future travel.

Also, the protection plans were backed by tour operators instead of highly rated insurance underwriters. So if a tour operator ran into financial difficulties, it might mean your trip 'protection' was worthless.

That's starting to change, says Beth Godlin, president of Aon Affinity Travel Practice, a travel insurance company. Today, many travel protection products bundle travel insurance with other benefits and services, like 24/7 travelers’ assistance. For example, Vantage's program has an insurance component, but like all insurance, its coverage is limited.

'When you purchase travel protection through a cruise line or a tour operator, known as supplier plans, both the insurance and those additional benefits are tailored to the type of trip you’re taking,' she says. 'These plans give travelers seamless, customized coverage in one easy-to-purchase package.'

In other words, the most reputable travel companies that offer trip 'protection' will have actual insurance components in there somewhere. But you have to look for it. A few companies continue to sell old protection that may or may not work.

Steve Dasseos, CEO of TripInsuranceStore.com, says buyers need to beware when they hear the term 'protection.'

'People assume all plans are essentially the same,' he says. 'They are not.'

How to tell if your travel 'protection' will protect you

Look for real protection: Some plans promise to do what any self-respecting tour operator or agency would do, like process a change or cancellation on your behalf. You don't need to pay extra for that. Look for a cash refund when you file a claim for a covered reason.

Look for an insurance component: Insurance is a regulated industry – promises are not. If you're shopping for travel protection, make sure you're dealing with a travel insurance company and underwriter. (Any reputable travel insurance underwriter will be rated by AM Best and be a member of the US Travel Insurance Association).

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Look for a name you trust: Saying it's 'insurance' isn't enough. Make sure you're dealing with a well-known brand, like Allianz Travel Insurance, Travelex, Travel Guard or Generali Global Assistance. These companies have a brand name to protect and will help you if something goes wrong on your trip, as long as you're filing a claim for a covered event.

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Christopher Elliott is a consumer advocate. Contact him at chris@elliott.org or visit elliott.org.

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