Will Insurance Protect You?

If you've ever bought travel insurance, a lingering question is always whether it'll actually protect you when you need it most. Benefits and claim limits vary widely from company to company and from policy to policy, and insurance lingo is infamously obtuse. And, trying to figure out why certain scary and unpleasant scenarios aren't covered by insurance -- or are only partly covered -- can be as mystifying as trying to understand why some seemingly rare or innocuous travel snafus are covered.

For example, if rioting or war erupts in a country you've cruised to, most insurance companies won't reimburse you if you fear for your safety and choose to leave midway through your trip. Yet, though you might not get all your money back for the missed portion of your trip, some policies will reimburse "trip delay" expenses, such as the hotel bill while you're holed up in a foreign port, waiting for an emergency airlift home.

On the other hand, you might deem it disastrous if a hurricane warning forces significant changes to your cruise itinerary after you've boarded. But, unless you're out of pocket for the disruption -- say, you paid in advance for a shore excursion -- forget trying to claim for the supreme bummer of missing your favorite ports. To really get the most out of travel insurance, you have to consider its basic purpose, which is to settle an unexpected financial loss.

Your own actions can also void the policy entirely. Unlawful behavior is frowned upon by insurers … as is having a few too many drinks by the pool. Alcohol intoxication is a little-known exclusion for most policies -- meaning that if you get drunk, dive into a shallow pool and crack open your forehead, your insurance provider may not be responsible for paying for the stitches.

To avoid more nasty surprises in the form of teensy exclusions that may ruin even a fully insured cruise, Chris Harvey, chief executive of travel insurance comparison Web site Squaremouth.com, advises combing through the fine print of a policy -- before, not after, you buy.

"Your only real protection against a bad refund is good insurance," Harvey sums up, "but you really need to know exactly what a policy will protect you for."

Here are two more buying basics to keep in mind before discussing the finer points of insuring against a nightmarish cruise:

Pay attention to the type of policy you're purchasing.

Not only do policies protect travelers unequally, there's a sizeable gap in the protections afforded by plans that cruise lines, resorts and tour operators sell, versus so-called "third-party insurance," sold by insurance companies and brokers.

Cruise lines or any other travel providers can only insure what they invoice for. That means if airfare is purchased separately online, insurance doesn't cover missed flights or lost luggage. Such policies build in more exclusions and heftier commissions. A cruise line is also more likely to offer a free or discounted future cruise as restitution for a bad cruise, rather than cash.

"The quality of insurance you get is the same; you might just get less of it," Harvey says.

Financial solvency is another key difference: If a tour operator or cruise line goes broke, there's no legal obligation to honor its insurance. In contrast, third-party policies -- which this article focuses on -- are more strictly regulated and fully backed if a broker or insurance company runs into financial trouble.

No matter who sells the policy, expect premiums ranging from five to 10 percent of the total trip cost. And watch for the phrase "travel protection plan" in your cruise packet. It means insurance has been tacked onto the cost of the cruise, want it or not, unless you specifically opt out.

Buy early.

When is the ideal time to buy travel insurance? As soon as you've put down any deposit on a trip. Coverage begins at 12:01 a.m. local time the day after purchasing a policy. With the exception of polices from CSA, insurance doesn't get cheaper if you wait, and in fact, benefits such as being able to cancel or abort your cruise for reasons ranging from illness to job loss diminish the closer you get to the sail date. Another critical note is that you might miss the time-sensitive window to be waived for a pre-existing condition: The clock starts ticking as soon as you make a first deposit or payment, toward any aspect of your trip -- from flights and hotels to shore excursions and the cruise itself. So, even if you haven't yet paid for the vacation in full, estimate its total cost. You can change that amount on a policy up to the date of departure. In fact, you'll be able to change everything about the policy, apart from the number of travelers.

It's natural not to want to plan for calamities, such as falling overboard or dying on a cruise, being sexually assaulted or having your belongings stolen. But, Harvey counters that the extreme stuff -- medical evacuation, for instance -- can bankrupt you without proper travel insurance, which is why finding time to shop for travel protection should be at the top of your trip-planning to-do list.

"When you're comparing cruises to go on, it's probably the best time to compare the insurance you'd want," he concludes. "There's no advantage in waiting."

Here's our insider advice to ensure smoother navigation through travel insurance's finicky fine print:

Does travel insurance protect me if I have to cancel a cruise because something happens to my family or home?

Most policies are pretty liberal in covering unforeseen events that, while unrelated to your travel plans, would likely cause you to cancel them. If a family member -- including spouse, kids, parents, grandparents, grandchildren, aunts, uncles, nephews and nieces -- falls ill or dies pre-cruise, you could cancel the trip and put in a claim. Policy buyers are also covered if something happens to their home to render it uninhabitable. If the roof caves in, the house burns down or a winter storm bursts pipes, you're covered if you cancel or interrupt your cruise to deal with the emergency.

Am I covered for an accident involving alcohol?

Alcohol consumption is usually an exclusion. Succumb to alcohol poisoning, or wreck your rental car after a few rounds at a bar in port, and it's enough to void emergency health coverage for an otherwise insurable accident. Insurers rely heavily on medical records to assess your claim, Harvey says.

Am I covered for medical tourism?

It's best to rethink having lip-fillers injected at the ship's medi-spa. Policies tend to incorporate wording to this effect: "No payment will be made for loss caused by or resulting from traveling for the purpose of securing medical treatment." That means insurers have grounds to deny any claim -- from lost luggage to emergency medical treatment for an accident -- if you're traveling abroad seeking treatment or cheaper surgery. Depending on the insurer, "treatment" could be interpreted to include Botox, teeth whitening or acupuncture treatments, now offered by many cruise line spas. And, the prohibition applies equally if you extend your cruise vacation with a week at a plastic surgery clinic on land.

What if something bad happens during my bungee-jumping shore excursion?

Cruise lines have been amping up the thrill factor with more adventurous shore excursions, but Harvey cautions that insurance often specifically exempts hazardous sports and activities. Bungee-jumping or zip-line-loving cruisers do have options, though: Travelex Travel Select lets you purchase an upgrade to waive the exclusion; Travel Guard Adventure Travel Protection is an example of a new breed of policy specifically designed for the modern adventurer and doesn't come with hazardous sport exclusions. And, policies often won't cover competitive sports, competitions and tournaments. So, for example, you aren't protected if you're injured while taking part in a 10-K race organized ashore.

Am I covered during pregnancy?

From the insurer's standpoint, policies aren't designed to cover foreseeable events, meaning pregnancy that's progressing normally or routine childbirth wouldn't be insurable if you're close to your due date. But, if traveling leads to an unplanned birth in a foreign locale, you're covered if the birth is significantly premature -- therefore a complication and also a medical emergency. Luckily, cruise lines' own rules make this a fairly straightforward claim: Most don't allow you to set foot onboard after 24 weeks (the end of the second trimester). And, as far as insurance companies are concerned, giving birth before 24 weeks likely qualifies as a complication, so you'll be covered. Also, if you're cruising in your first or second trimester and have a bad fall and want to check that the baby is ok, you'll be covered. But, popping by the infirmary to check on normal pregnancy symptoms wouldn't qualify for coverage, Harvey advises.

What if my cruise is canceled or I need evacuation because of a country's political upheaval?

"Riot or civil unrest" is a common exclusion, so if you bought insurance months before cruising to a place like Egypt -- where unrest in early 2011 prompted many lines to cancel -- chances are you won't be reimbursed for the canceled or aborted cruise.

Nor are you likely to be reimbursed for travel expenses incurred while trying to evacuate an unstable destination. Only MH Ross, TravelSafe and Travel Insured International policies agree to cover nonhealth-related evacuations that ferry travelers out of danger zones. Some policies do, however, let you claim under "travel delay" and "missed connection" benefits for unanticipated costs of lodging, etc., as you await evacuation.

"It's important to know where your carrier stands on all these issues," says Harvey. Best in situations of civil unrest is a "cancel for any reason" upgrade, available with many policies, which reimburses up to 95 percent of canceled trips. Or, if the cruise line cancels or cuts short your trip, hope that it will refund your costs.

What are my options if a country's political situation deteriorates before my cruise starts?

You can't cancel a cruise for fear that something bad might happen and expect a refund. So, if cruising into a danger zone isn't your idea of relaxation, fear of civil unrest isn't a covered reason to abort an upcoming cruise that's still scheduled. Terrorism is a covered reason for some policies but not for others, so check with individual insurers. And the wording is especially finicky -- if a bombing in your homeport the week before embarkation leaves the terminal functioning normally, you won't be eligible for a refund; if bombs have destroyed the terminal, you will.

What if my ship's engine breaks? What if the cruise is ruined by poor weather?

They seem like very different disasters, but insurance treats mechanical or weather-related snafus in exactly the same way. You aren't covered for "loss of enjoyment" from the ship breaking down and skipping the port you most wanted to see, or a pelting rainstorm ruining your private-island beach day, but you'd still have a significant claim if you suffered a measurable financial loss or personal injury as a result. Did you buy a nonrefundable shore excursion for a port that ended up cut from the itinerary due to fog? You're covered, and Travel Insured International even offers a "change of itinerary" benefit on some plans, spelling out your claim under this cruising scenario. Were you tossed about when the ship listed in a gale? Keep receipts from a hospital or doctor's visit, and make an emergency medical claim. Stranded on a nonfunctioning ship, eating Spam? If your return home were delayed, coverage would kick in once you disembarked and started incurring unforeseen costs of lodging, food, local transportation or rebooking flights.

missed the ship

What if I overslept and missed my cruise or missed embarking after a shore excursion?

It all comes down to why you weren't able to get on the ship. Oversleeping isn't a covered reason to interrupt or cancel travel. On the other hand, you'll have a claim for "common carrier delay" if the local bus taking you back to the ship breaks down, the last ferry is canceled or you're in a traffic accident on the way to the airport. If you fall ill and have to be taken to hospital, you could be protected for a missed departure, as well.

What if I'm robbed?

Some plans provide limited or no coverage specifically citing robbery or assault, warns Harvey, giving the example of an excursion group whose cash, jewelry and cameras were stolen at gunpoint while they were ashore touring St. Kitts in November 2010. Some policies do cover the value of what was stolen. Others cover stolen luggage, but not other types of belongings or incidents of theft. And as a rule, travel insurance never reimburses lost or stolen spending money.

What if something happens to me while I'm depressed or suicidal?

Cases of suicidal crew or passengers throwing themselves overboard aren't unheard of. In September 2010, for instance, a Chinese passenger on a two-day gambling cruise lost $386,000 in the casino and jumped to his death en route to Hong Kong. The next month, an Israeli cruise ship passenger left a suicide note before disappearing into the waters off Cyprus. Mental illness and medically diagnosed depression are conditions that, if they were severe enough to contribute to some ill-fated event, such as a suicide or a medical emergency, would void a policy. So if a despondent cruiser jumps off the bow, causes a car accident in port, or otherwise needs to see a psychiatrist urgently -- or if you have to cut short a cruise to deal with an emergency involving someone who's clinically depressed back home -- travel insurance may not be much help. Milder depression that's under control with medication is often classed as a pre-existing condition.

What if I fall overboard?

In insurance terms, claims related to a "man overboard" situation might not succeed unless there's a body to be recovered and officially pronounced deceased, Harvey says. If you survive falling into the ocean, you'll be covered for all costs of the rescue, further medical treatment, and flying home from the nearest port -- unless, of course, you were drunk or suicidal, which would negate the coverage.

What if I suffer a serious accident or fall into a coma?

The key point in any medical emergency is to contact the emergency assistance number listed on your policy as soon as you're able to. If cruising solo, let family members know you have insurance, and give a copy of your policy to traveling companions, a tour guide, cruise director or hotel manager -- it's something not enough insurance purchasers do, says Harvey. Failure to notify an insurer promptly gives justification to deny an otherwise covered claim, he says. "The insurer wants to know whether to transport you back home or to a better facility, and will want to approve expenses regarding your care."

What if I'm sexually assaulted?

Claims of rape typically by crewmembers or fellow passengers happen at nearly twice the U.S. rate on land -- about 56.9 per 100,000, according to cruise crime expert Ross A. Klein's 2008 testimony in Senate hearings on the issue. And, the Cruise Vessel Security and Safety Act mandates that ships log complaints of crimes, including rape, and hand their reports over to F.B.I., Coast Guard and other law enforcement investigators. Even if most policies don't contain wording specifically mentioning rape, you could still have a covered claim. If you sought treatment or had a rape kit done at the local hospital, for instance, you'd make the claim for emergency medical benefits; if you cut short your cruise after the rape, you could file a claim under the trip interruption benefit.

Norovirus Medical file

What if I come down with Norovirus?

Just as when the ship is mechanically incapacitated, the principle of "measurable financial loss" applies here: There needs to be a provable monetary loss for insurance to help in this situation. The inconvenience of a dream cruise dashed by annoying illness doesn't count. Were you too sick to go on prepaid, nonrefundable excursions? Did you pay to see the ship's doctor? Those are valid insurance claims. Whereas if you're stuck in your room feeling like death for a few days, there's nothing to claim, since you didn't incur any real expenses.

What if I have a pre-existing condition?

A pre-existing condition, such as diabetes, a heart condition, or depression requiring medication, doesn't automatically make you uninsurable. You'll need to seek a waiver for this and buy the policy by a certain date -- depending on the insurer, 14, 15, 21 or 30 days after making an initial trip deposit. Only CSA and HTH Worldwide still allow the waiver if the 30-day deadline has passed, as long as you haven't yet paid for the trip in full. Interestingly, some policies apply the waiver broadly to include anyone listed on the policy, so if a traveling companion's pre-existing condition keeps you from cruising, you might have a claim, as well. Even if you buy insurance too late to get the pre-existing condition waiver, you'll still have a number of other useful, trip-related benefits -- depending on the policy, anything from lost luggage to medical emergencies that have nothing to do with your pre-existing condition. The definition of "pre-existing" changes from policy to policy; in general, if your ailment is under control and there's been no change in your treatment recently, you may not be classified as having a pre-existing condition at all.

What if I die while cruising?

It's the worst-case scenario -- and, unfortunately, it's not too uncommon. Death falls under a policy's "medical evacuation and repatriation" benefit, which means your estate would be reimbursed the cost of transporting your body home. Harvey notes that the amount of such coverage varies widely: Travel Guard's Basic (Essential) policy offers $100,000 per person, while Travel Guard Platinum (Cruise, Tour & Travel) lets you expense up to $1,000,000 for repatriation and is one of several policies offering additional life insurance coverage, too. A spouse or family member covered under the same policy would be able to reclaim expenses caused by interrupting the cruise to ferry your body home. A death certificate is needed to activate any claim.

What if I'm offered an unsatisfactory settlement for my ruined cruise?

If a cruise line's compensation isn't enough, put in a claim on your third-party policy instead, advises Harvey. Why your original cruise failed is important only in that it needs to be a "covered reason": spelled out and afforded a benefit under the policy. If that's the case, decline the cruise line's offer of onboard credits, free alcohol or a free future cruise and hand over vouchers they gave you to your third-party insurance provider, who will be in a better position to make you whole for your financial loss -- in cash, not in kind. If you've accepted any cruise line help, such as money to rebook travel arrangements, it'll be deducted from the value of the claim through third-party insurance.