Beware of "pre-checked" insurance purchases when buying airline tickets online

Terri Widder hesitated seconds before she booked a recent flight from Chicago to Tulsa. Something felt wrong.

She scrolled up on her computer screen and noticed an option to buy a $19.95 insurance policy that would protect her if her trip were canceled, her bags were stolen or she needed emergency assistance.

The box was already checked.

"Fortunately, I caught it before I confirmed the reservation," said Widder, a retiree who lives in Carol Stream, Ill. "I believe this is just another way to mislead the customer and get more in fees and adjustments in revenue from people who may not be that familiar with the process. There are no benefits to the customer."

Forcing travelers to opt out of a purchase when they're buying a ticket or a hotel room isn't new. But the volume of complaints I've received about pre-checking is on the rise, as is the number of well-known travel companies engaged in this questionable e-commerce practice.

American Airlines, the carrier on which Widder had booked her tickets, says it doesn't pre-check boxes online and referred my questions to Yahoo Travel, the online travel agency through which the reservation was made. That site offers a policy through Travel Guard, and as it turns out, it's a good thing Widder gave her itinerary the once-over. If she hadn't, she'd be stuck with a nonrefundable policy, according to the terms on the Travel Guard site.

"The practice of including travel insurance and other ancillary benefits is becoming more and more standard," said Dan McGinnity, a spokesman for Travel Guard. "Thousands of people purchase travel insurance in this way. Our complaint rate is less than one-tenth of 1 percent."

Travelocity, which handles bookings for Yahoo Travel and is the company responsible for the pre-checking, said a majority of its users — 86 percent of customers booking domestic trips and 75 percent of those buying international vacations — click the "no" button.

"The price is also broken out as a separate cost, so there is no confusion on what is the airfare charge and the travel protection charge," said Travelocity spokesman Joel Frey. "Should, however, a customer initially overlook the travel protection offer during checkout and later decide they do not want it, we'll provide a refund within one billing cycle from the time of purchase."

A follow-up call to Travelocity's reservation number suggested that there might be some confusion about its return policy. A representative told me that an accidental insurance purchase might be refunded if it was bought within 24 hours.

Joyce Carlson, a reader from Oakland, Calif., recently had a similar experience to Widder's when buying a round-trip airline ticket from San Francisco to Tokyo on Orbitz. She discovered that she'd left her box checked and inadvertently purchased a policy through Access America. She wrote to Orbitz asking for a refund and received what appeared to be a form letter denying the request.

"We have found that many of our customers choose travel insurance when booking an international vacation to protect their investment in their trip should covered emergencies require that the trip be canceled," an Orbitz representative said. "Therefore, we default to 'Yes, Add Ticket Protector Plus' to provide this peace of mind."

I looped back in with Orbitz, where a spokesman told me, "I'm pretty sure we're following industry practices in terms of how insurance is sold."

Oh, really?

"I think it's unethical and obnoxious," said Lauren Bloom, a business ethicist based in Springfield, Ill. "You're tricking people into buying your product."

Thomas Way, an associate professor of computing sciences at Villanova University, said pre-checking isn't an industry standard. "We teach our software engineering students that if they are designing a website, it should never do anything the visitor doesn't explicitly ask it to do," he told me. "Forcing an opt-out selection of anything — much less a purchase — is a great way to anger customers, drive away business and ultimately ruin one's business."

The U.S. Travel Insurance Association, a trade group to which both Access America and Travel Guard belong, doesn't explicitly forbid pre-checking. Its code of ethics requires members to present their products "clearly and accurately" and to "make no misrepresentations, false or malicious statements" about their products or services.

Ethical or not, the practice may be illegal, according to Jeff Langenderfer, an associate professor at the Meredith College School of Business in Raleigh, N.C. "Under basic guidelines of contract law, silence is not a contractual acceptance," he said. "In other words, someone can't send you a letter reading, 'If I don't hear from you by Friday, we have a contract' and thereby bind you. In many ways, a pre-checked purchase box is not any different in that it requires no active assent from a purchaser, and thus tries to create a contract by inaction or silence — something that the law has prohibited for a very long time."

Customers agree that having to opt out of a purchase is out of line.

"This is akin to a car dealer negotiating a price but then slipping into the final paperwork a charge for upholstery stain protection or hundred-dollar floor mats that you did not order and do not need," said John Polich, a college professor in New York, who has had two trip insurance polices added to his cruises "as a favor" by his online travel agency in the past year.

Even some insurance companies frown on the practice. While Access America doesn't have any written guidelines for agents who sell its insurance, it recommends letting travelers make a choice. "The best practice we recommend is to require the customer to make a yes-or-no purchase decision," said Mark Cipolletti, an Access America spokesman. "In other words, neither option is pre-checked."

When made aware of Carlson's unwanted insurance purchase, Access America offered her a full refund.

Although insurance is primarily regulated by the states, the U.S. Transportation Department could step in — at least in the case of airlines — and put an end to pre-checking with a simple administrative rulemaking. Insurance companies, prodded by a few forward-looking state insurance commissioners, could also instruct their resellers to end the practice.

Until then, travelers booking online must be extra careful before they click the "buy" button. Review the entire screen, as well as the fine print, to ensure that no one has checked a box for your convenience. Or theirs.

Christopher Elliott is the ombudsman for National Geographic Traveler magazine. His column runs weekly at seattletimes.com/travel. Contact him at celliott@ngs.org.