Woman cancels trip to have surgery, travel insurance won't cover it

SAN FRANCISCO (KGO) -- If you're planning a dream vacation, do you also buy trip insurance? It can ease the blow if you have to cancel for some unexpected troubles. You may miss out on your vacation but at least you get your money back.

Right?

Not if you're Mary Lou Lathrop of San Carlos.

"They just denied my claim. No reason, no explanation at all,'' Lathrop said, as she propped a hobbled foot on her living room sofa. "I was told I was covered for a medical reason and then they said I wasn't."

Lathrop thought she had done everything right when she booked a 10-day Alaska cruise with the non-profit Road Scholar tour company of Massachusetts. She also purchased the $718 Road Scholar Trip Protection Plan. It provides for a full refund of the cruise cost for, among other reasons, a medical problem requiring treatment.

Sure enough, a few weeks after she paid for the cruise, Lathrop felt the pain in her foot.

"I got a really bad foot infection,'' she said. "I have a hammertoe, I have bunions." She pulled off a sock to show her ailing foot. Some toes overlapped others, revealing why she could hardly walk or even wear shoes.

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"I could only wear sandals it was really throbbing, and I was hobbling terribly,'' she recalled.

Doctors said Lathrop needed surgery, followed by six weeks of recovery. But the hospital couldn't schedule the operation until just before her cruise.

"So I thought OK I'm going to cancel, and I did cancel,'' Lathrop said.

She also filed a claim for a full refund of the $6,595 cruise. Her doctor provided a statement saying she was too disabled to travel. Lathrop attached a photo of her swollen blistered toes. However, three weeks later, Road Scholar's insurance administrator denied her claim without explanation -- except to say her condition was not a "covered reason" for canceling.

"I was like, 'why did I bother to buy the trip insurance? I bought it for just this kind of thing and it was useless,'' she said. "Not only was I not going to Alaska, I could lose everything I paid. And this was $7,000. It's a lot of money for me."

Road Scholar said that instead of a refund, she was entitled to a credit of about $3,200 toward a future trip. Instead, Lathrop disputed the charges with her credit card company -- and she won. She got a full refund of all trip costs.

But it didn't end there.

"To my surprise, even though I won the dispute Road Scholar sent me a bill a few weeks later,'' Lathrop says.

Inexplicably, weeks later Road Scholar sent her a bill for $2,298 -- about half the cost of the trip minus deposit.

"I called them up and said, I won the dispute. Your credit card company and my credit card company decided I was right,'' she recalls, still bristling from the exchange. "I said, 'Please send me a bill that shows I owe you zero, nothing.' ''

Instead, Road Scholar sent her another bill for the same $2,298.

Lathrop contacted ABC 7 On Your Side, we contacted Road Scholar, and the company called Lathrop soon after.

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"They said 'Oh, gosh you're right we made a mistake','' Lathrop recalls. "You don't owe us anything."

Road Scholar tells 7 On Your Side that its billing department mistakenly sent her that bill, not realizing she'd won the credit card dispute. In a statement, Road Scholar said:

"We very much hope Ms. Lathrop is in better health and doing well. Her welfare was always our first concern throughout our interaction with her. The minute Ms. Lathrop told us her insurance claim was denied, we worked to help resolve the issue. In our last phone conversations with her, she expressed satisfaction with the outcome, and received a return of all moneys paid to Road Scholar and Aon (insurance administrator) She also accepted our sincere apology for the bill that was sent to her by mistake after we issued her a credit for a future enrollment, unaware that her credit card issued her a full refund at the same time."

The insurance administrator, Aon Affinity, and Road Scholar told ABC7 that Lathrop did not provide proof of treatment "at the time of cancellation." We asked how that could be when her doctor did provide a statement, along with number to call if further documentation was required. Though the answer was not clear, the company indicated she needed to prove she'd still be in treatment at the time of the cruise - which was months after she canceled and filed her claim. Aon said:

"This protection plan does provide Trip Cancellation benefits reimbursed in cash for covered reasons, including medical reasons, per the terms of the plan along with a Cancel for Any Reason feature, which provide future programs credits as reimbursement. The original documentation provided by the customer did not include the requested medical verification of care at the time of the cancellation. Had that been provided, we would have processed the claim."

Lathrop says she's going to examine trip protection plans more carefully from now on.

"I may still go to Alaska someday,'' she said. "For now I'm happy to have my money back."

For more stories, photos, and video from 7 on Your Side and Michael Finney, visit this page.