Florida regulators have charged six travel agencies, including one in Boynton Beach, with using unlicensed agents to sell bogus trip insurance policies through a company never authorized to do business in Florida. Officials said the agencies now may be responsible for some valid unpaid claims – in some cases amounting to thousands of dollars.
The actions are part of the Florida Department of Financial Services’ continuing year-long investigation into Prime Travel Protection Services, of Colorado, other outfits offering unauthorized travel insurance, and the travel agencies that sold it. Regulators say more agencies may be cited.
Prime and some similar operations insisted they were offering “trip protection” and not travel insurance, which is purchased by hundreds of thousands of Floridians and offers full or partial reimbursement for trips that are canceled or changed. State law requires travel insurance policies to be approved by regulators and underwritten to ensure claims will be covered. But the consumers who bought protection policies assumed they were insured, state regulators said, only to discover they had little recourse when claims went upaid.
Consumer advocates advise Florida travelers to check both if their travel agent is licensed to sell them travel insurance, and if state regulators have authorized their policy provider, by calling Financial Services at 877-693-5236.
The six agencies cited this week all directly or indirectly offered policies through Prime or its affiliates before the company went out of business in January 2009, according to state filings. They include: JB Travel Inc., which also does business as JBCruises.com, of Boynton Beach; St. Lucie West Travel, of Port St. Lucie; Ahoy Cruises, which also does busines as Ahoy! Cruises, of Jacksonville; Diana’s Travel South, which did business under several other names, of Spring Hill; Sandra Denmore, who did business as CruiseWithSandy, of Port Orange; and Four Seasons Tours and Cruises, of Largo.
Prime allegedly left hundreds of Florida travelers, plus many more nationwide, with unpaid claims when it closed its doors.
The citations warn the agencies to stop selling unauthorized insurance, or face $50,000 fines and other penalties. The state also said any travel agents selling travel insurance must be licensed. Those charges are similar to ones made over the past 10 months against one Florida travel agent and seven other agencies that did business with Prime or its affiliaties.
When the Prime case broke last year, travel agencies that offered the company’s policies repeatedly said they did not need an insurance license and were not financially liable for Prime’s failure, claiming they didn’t know the product was unauthorized.
“How could they not know? They gave it to us as part of a package deal,” said Harold Sondik, of Delray Beach. He said the JB Cruise agent enrolled him and his wife with a Prime trip protection plan when the couple bought a cruise in 2008, and were told it would cover cancellation for medical emergencies.
Sondik never has recovered the $2,800 he lost when his wife unexpectedly was hospitalized and they had to cancel their trip.
JB Cruises did not return telephone message Monday. St. Lucie West Travel, which had not yet received its state notice, declined to comment. Phil Warmanen, the owner of Ahoy Cruises, also had not seen his notice Monday but said he was “more than willing to conform to whatever regulations there are.”
The agencies can contest the charges in an administrative hearing.
Financial Services is reviewing 295 complaints against Prime where claims have not been paid. Prime owner Jerry Watson admitted last year his products, which went under several names, never were authorized to be sold in Florida or Colorado, but claimed they did not need to be because they weren’t travel insurance.
Prime Travel’s Web site now only states the company is in liquidation and Colorado insurance regulators say they do not know Watson’s whereabouts.
Three of the seven agencies cited last year and earlier this year already have settled their cases: Cruise Options Inc.of Plantation; Cruise Supermarket Inc. of Plantation; and High Performance Travel Inc., of South Daytona. As part of their settlements, the agencies agreed to make restitution to customers who have valid unpaid claims, and to switch any with unauthorized policies to legitimate travel-insurance carriers or refund premiums.
One of the six, Palm Coast Travel of Lake Worth and its affiliate Smartcruiser.com, also was charged with initially giving travelers AccessAmerica trip insurance policies, then transferring customers to Prime or Smart Travel Insurance, two companies not authorized in Florida to offer coverage.
Palm Coast attorney Dan Newman declined comment and the company is appealing the state’s action. AccessAmerica spokesman Daniel Durazo said the company, the world’s largest travel insurance provider, had been contacted by the consumers involved in the state’s investigation and is “working to resolve each matter appropriately.”
Cruise Options did not return telephone call.
Jerry Roth, the owner of Cruise Supermarket who has been in the travel business for 31 years, said he didn’t know travel agents needed a license to sell trip coverage until the state started its investigation.
Roth said he didn’t check Prime’s credentials when he started offering its policies, as Prime had taken over another company Roth had done business with for years.
Roth said he has switched his customers to other lines and took care of those with unpaid claims, as agreement with the state requires. “It’s been a learning experience,” he said.