The cruise lines lead us to believe that if we buy travel insurance from them that we are covered in case we need to cancel our vacation. We believe we will get our money back. The message is clear: Buying travel insurance is a good idea and we can easily add that on to our booking. We hear that and think “I’ll play it safe and get the insurance in case something comes up and I can’t go.” But there is a lot more to travel insurance than we might realize at first glance and having it does not always mean we get our money back.
Reality check
First of all, the cruise lines are in the cruise business, not the insurance business. There are no self-insured cruise lines that we could find. It does not take much clicking around on a cruise line website to get you headed on over to BerkleyCare, the company that handles insurance for many cruise lines.
Next. make no mistake about it: Travel insurance is a big money-maker for cruise lines. It’s also a big money-maker for travel agents who commonly get a higher percentage commission from some travel insurance options they might sell than they get on the cruise.
Where you buy it matters
Actually, your first stop on travel insurance should be your personal insurance agent, the guy who handles your auto, home, health or life insurance. That trusted source might also sell travel insurance or have a trustworthy recommendation for you. The insurance game is real snake pit: There are “agents” out there to get you.
Many cruise passengers choose to buy travel insurance separately from their cruise fare, from a third-party source. The idea here is that if the cruise line goes out of business, I have coverage from a different source. Travelguard is a big player in that game. Insuremytrip is another that compares several insurance companies and can be cost effective. Annual travel insurance, covering whatever you might choose to do, in addition to cruise vacations, is also an option.
Be careful with third-party plans though. This is a place where shady travel insurance sales people hide in wait. Nothing against your travel agent but they too might not be the best source of third-party insurance either. In most states people who sell insurance are required to be licensed to sell it so ask to see that license if considering a buy at the travel agency.Price, not so much coverage, is the most likely scam
For basic cancellation and medical insurance, prices among cruise lines vary a lot. Carnival’s Vacation Protection Plan, for example, costs $109 for a guest spending $1000 on their cruise.
Royal Caribbean’s CruiseCare insurance costs $59 for almost the same $1000 coverage. Cancel for a covered reason and Royal Caribbean will waive the non-refundable cancellation provision of your cruise ticket contract and pay you in cash the value of the unused portion of your prepaid cruise vacation. Cancel for “any other reason” and they don’t give you cash back but you may be eligible for a future cruise credit of up to 75% of the non-refundable, prepaid cruise vacation cost.
Princess Cruises has similar coverage with the price of insurance based on a percentage of what you paid for the cruise. They also bump up the future cruise credit option when canceling for any reason to 100% of the otherwise non-refundable prepaid vacation cost with their Platinum plan.
But coverage is important too
We most frequently think of travel insurance as something to help if we have to cancel our vacation. But cancellation is just half the story.
Medical benefits while on your vacation are included too and also vary. Developing a serious illness while on vacation can often be avoided by taking some precautions before leaving. But accidents do happen and medical coverage can be important to have. Also, covering pre-existing medical conditions is a factor to consider if a member of your immediate family, like an aging parent, has them. You may be in perfect health but if the illness of a close relative could cause you to cancel your cruise, you need coverage for that. If dad heading to the great beyond would not alter your plans, forget I said that.
While cruise lines base the price of insurance on only the cost of your cruise, third-party sources commonly base the price on the cost of your cruise and your age. Younger people get off easy, older people pay through the nose. Seniors are often better off price-wise with the cruise line plans but third-party sources often offer more plans and options than the one-size-fits-all cruise line plans have.
So what to do?
The best bet is to get with a licensed professional insurance agent to make the right choice on travel insurance. But hardly anyone does that. You probably won’t either. So here’s a list of questions to ask different sources then compare answers:
- How much is the basic coverage? (basic cancelation and medical coverage)
- How much medical and medical evacuation coverage is included? (Like what is the limit)
- Does it have “cancel for any reason” coverage? Do I get cash back or future cruise credit if I cancel for any reason?
- How do I file a claim?
- What documentation will be required if I need to file a claim?
- What is the normal processing time for a claim?
Passengers are clearly in the drivers seat as to which travel insurance to buy. Like other cruise line claims and programs that some call scams, this might not be one at all if you take the time to explore available options.
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Flickr photo by TheTruthAbout