Through the travel insurance broker InsureMyTrip.com, Suzanne Tow of New York City paid $270 to cover a $5,000 trip in May to Yosemite National Park. When the tour was canceled, Tow filed a claim with her insurer, and discovered, like so many other travelers, that travel insurance doesn’t cover cancellations because of a pandemic.

“They’re not risking a penny because they’re not paying a cent,” she said.

Americans spent nearly $3.8 billion on travel protection in 2018, the latest figure available, up about 41% from 2016, according to the U.S. Travel Insurance Association. Now, for those contemplating traveling in an increasingly uncertain world, the question of whether travel insurance is worth buying looms large. If insurance couldn’t help with that first wave of COVID-related travel cancellations, many irate travelers ask, what exactly were they paying for?

Good question

“Travel insurance is a line of insurance we consistently hear problems about,” said Carmen Balber, executive director of Consumer Watchdog, a nonprofit consumer advocacy group. “It’s much less regulated than other lines of insurance and tends to include exclusions for things consumers believe they’re covered for.”

Though the rules vary by state, most standard policies sold in the U.S. provide predeparture cancellation and trip interruption for unforeseen problems that are specifically named, including job loss, an illness that prevents you from traveling or cuts a trip short, a death in the family, a missed flight connection that, in turn, leads to a missed cruise departure, and so on.

But there is a long list of exclusions that render the insurance void, including terrorist attacks, war and claims associated with psychological disorders, or risky adventure sports like sky diving.

When a threat becomes “foreseen” — for example, once a brewing storm becomes a named hurricane, or a global health threat becomes a named pandemic — it is uninsurable, unless you bought the policy before the threat is named.

If you contracted COVID-19, which prevented you from traveling, and held travel insurance before the date the viral infection became a known threat, the insurance would have covered your cancellation. Allianz Global Assistance, the largest travel insurance company, uses Jan. 22 as the known date. Travel Guard, another major player, uses March 11, the date the World Health Organization declared COVID-19 a pandemic.

But for travelers who canceled in the current COVID-19 crisis, these insurance companies pointed to their list of things that were covered — a death in the family, job loss, etc. — which did not include pandemics.

“Travel insurance is pitched as something simple, take it or leave it, but it’s a complex insurance policy and there’s all sorts of limitations,” said Birny Birnbaum, executive director of the Center for Economic Justice, a nonprofit that advocates for equal access to economic opportunity.

The accumulation of unredeemable policies in the pandemic suggested an exploitive practice to Rep. Raja Krishnamoorthi. In March, the Illinois Democrat and chairman of the House Oversight and Reform Subcommittee on Economic and Consumer Policy opened a congressional investigation into profiteering by travel insurance companies.

“The burden should be on the insurance company and the brokers to make clear what they’re selling,” said Brendan Bridgeland, director of the Center for Insurance Research, a consumer advocacy organization. “Because that’s where people are getting the idea that, ‘I buy this I’m protected,’ and that simply is not the case if you read the policy.”

Sorry, that’s excluded

Maurizio Howard of Parker, Colorado, thought he was covered for his daughter’s school trip to the Dominican Republic because he paid $165 for travel insurance in the $2,955 trip fee. When the March 14 trip was canceled because of the pandemic, the operator, EF Tours, offered three options: Move the dates to 2021; accept a voucher for future travel that the family could resell; or take a refund, minus $1,000 in expenses that it did not enumerate.

That was within EF Tour’s rights, as outlined in the fine print of its trip contract. The company “retains the right to cancel, modify, or delay the tour as a result of … public health issues or quarantine or threats of public health issues …” Canceled tours would trigger a voucher for future travel minus a $95 nonrefundable deposit and “any additional nonrefundable fees.”

Because Howard feared that filing an insurance claim might hurt his chances of persuading the company to refund the trip, I asked his travel insurer if it would reimburse him the $1,000. Crum & Forster, the parent company of U.S. Fire Insurance Co., which underwrote the policy, responded via email that the booking terms are “a direct contractual arrangement between EF and their customer and is not related to the Travel Protection Plan.” In other words, no.

So, I should buy ‘cancel for any reason,’ right?

Travelers who wanted to cancel trips as COVID-19 gathered steam, but before travel was shut off by governments across the globe, were often told that their travel insurance did not cover canceling out of fear — unless they had purchased a cancel for any reason insurance upgrade, or CFAR.

With CFAR, a traveler is able to back out any time until a few days before departure and get some money back, usually 50% to 75%. It’s more expensive than regular travel insurance and must be purchased within a short window after making the initial trip deposit, usually less than 21 days. Additionally, the policy only covers cancellations up to two or three days before the trip.

Using Travel Guard’s website, I priced insurance on a $10,000 trip to France. Its basic policy costs about $500 to insure. But to get CFAR, I would have to take the “preferred” policy at about $554. Adding the CFAR option offering 50% back, cost $128, for a total of $682. If I canceled because of the pandemic, or for any other reason, I would only get $5,000 back, half of the insured amount. Less the premium, that’s $4,318 net.

Cancel for any reason, Birnbaum said, “is treated as insurance, but it’s not really. Insurance is protection against some fortuitous event.” This policy, he said, covers a decision that’s in your control — such as changing your mind about taking a trip — not a risk that’s out of your control, like a car accident.

Airlines in game

Airlines also act as travel insurance brokers, offering coverage by third parties every time you buy a ticket online. During the transaction, most carriers have a mandatory yes or no question about buying insurance and then add the cost of the policy, if accepted, to the ticket price. Answering “yes,” Kathryn Franz of Marion, New York, bought two nonrefundable fares on Delta.com for a September trip to several national parks in Utah to celebrate her 70th birthday. She bought insurance on the $1,193 tickets with Allianz Global Assistance for $94.

Though the trip is still months away, Franz has decided she is not comfortable taking it. “Both my husband and I are in the ‘at risk’ demographic due to age, but he also has diminished lung capacity due to having been a smoker for so long,” she wrote in an email.

Checking her policy, she discovered she would not be covered if she canceled the flight because of the pandemic. (However, Delta later changed the couple’s itinerary, and offered a credit to use in the future if they elected not to take the trip.)

“Concern over the potential to become ill is not a listed reason that would trigger coverage,” an Allianz spokesman, Daniel Durazo, wrote in an email.

When buying any insurance, experts advise, ignore third parties — in this case, the airlines.

“You can purchase a policy for the same flight on your own and it will probably be cheaper,” Bridgeland said.