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Travel Insurance Primer for Cruise Travelers

Travel Insurance Primer for Cruise Travelers (Photo: Norwegian Cruise Line)
Travel Insurance Primer for Cruise Travelers (Photo: Norwegian Cruise Line)

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The last thing most of us think about when we plan a cruise is the list of elements that can go wrong before and during our vacation. But, as Robert Gallagher, Senior Vice President and CEO of AIG Travel reminds us, "…there are many risk factors unique to cruising."

Flight delays caused by weather or a mechanical problem can keep us from arriving to our embarkation port in time. The airline can lose our checked bags. We can get sick before we board or, even worse, mid-cruise. We might make a boneheaded move in a port of call and miss the ship. Plus, a host of other general issues can scuttle a vacation, such as the illness or death of a family member, cancellation of plans by a travel companion, job loss, airline delays and lost baggage.

Those reasons and so many others are why travelers seek insurance coverage. It provides that extra bit of calm and control we all crave. More importantly, it prevents you from losing money due to unforeseen circumstances and travel emergencies, and insurance fees are typically just a small percentage of your vacation expenditure.

Updated March 12, 2020

What Does Travel Insurance Cover?

One misconception about travel insurance is that it's only necessary for travelers in ill health, those who pack valuable items in their suitcases or those who plan wildly expensive trips. It's important to recognize that travel insurance policies can bail us out of a multitude of quagmires. For example:

Trip Interruption

Say your ship develops a serious mechanical problem, which necessitates the cancelling of the entire voyage and you're forced to disembark at the next port of call. While the cruise line will generally assist passengers in such predicaments, a travel insurance policy will give you ultimate coverage and reimburse you for any unexpected out-of-pocket expenses (such as a hotel stay while you wait for an available flight back home) that the cruise line may not cover.

Additionally, your insurer's hotline representatives may actually be able to get you home faster than the cruise line's travel department, which is busy trying to assist everyone else onboard, which is often thousands of passengers.

Also, in some cases, the cruise line may only return you to your original port of departure, which then may necessitate additional transportation from there to your home. As an example, when Carnival Triumph had mechanical problems that required it to be towed to New Orleans, most passengers were bussed back to the originating port of Galveston. Those with travel insurance could have flown directly from New Orleans to their home airport in most cases.

Trip Cancellation

You're unexpectedly stricken with appendicitis a week before your cruise embarks. If you don't have trip insurance and cancel your cruise now, you'll be hit with an excessive cancellation penalty and may even lose out on the value of the trip altogether. Insurance will reimburse you for those out-of-pocket costs you can't get back.

Trip Delay/Missed Connection

You're on the way to the airport when your taxi breaks down, and you end up missing your flight. Or you're on the first leg of flights to the cruise port, and a mechanical delay means you'll miss your connecting flight -- and your ship. Travel insurance covers these sorts of trip delays and missed connections.

Baggage Delay/Loss

You make it to the Port of Miami on time, but the airline misdirected your luggage to Cleveland. Your formal attire -- and all your other clothes and accessories -- will literally miss the boat. If your bag is delayed a certain number of hours (policies vary), your policy will reimburse you for "necessary personal effects" such as a new outfit and toiletries to tide you over until your bag is delivered.

If your bag is lost and never returned, you can claim for the lost piece of luggage as well as what was inside it. The amount you'll recoup is capped by the terms in your policy. Some policies also include coverage to make sure your bag gets to the next port of call.

Medical Expenses

One minute you're focusing your camera lens on the Parthenon and jockeying into the best position for the shot; the next minute you've stepped on a rock, slipped, fallen and broken your ankle. You require immediate medical treatment.

AIG Travel's Gallagher says that, "Regular health insurance plans typically don't pay -- or pay in full -- for medical care outside of the United States." The appropriate trip insurance coverage will get you patched up right away without exorbitant out-of-pocket expenses. (Note: In many countries, you must pay a doctor or hospital up front, but a travel insurance policy will reimburse you for those expenses in a timely manner.)

Financial Default by a Travel Provider

No one wants to think about this but we all need to be cognizant of the financial health of our travel suppliers. Some insurance policies cover financial default of airlines, hotels, cruise lines and tour operators. (Note: Many policies offered directly through cruise lines do not include financial default coverage. Check each policy carefully before purchasing.)

Emergency Evacuation/Repatriation

If you watch the news, you've probably seen video clips of helicopter evacuations from cruise ships in the middle of nowhere. This may be necessary in cases of health threats -- such as heart attacks or strokes -- in which you require immediate care that goes beyond what's available in your ship's sick bay. If the next port of call is too far away, a medevac may be the only option to save your life or the life of a loved one.

Gallagher says that an emergency evacuation from a cruise ship can cost thousands if not tens of thousands of dollars; it's a big bill to pay out of pocket but it's covered in many trip insurance policies, such as AIG's Travel Guard products and Berkshire Hathaway Travel Protection's WaveCare. (Many cruise-line insurance policies do not include emergency medical or evacuation benefits.)

Trip insurance may also cover the repatriation of remains if a death occurs during an insured vacation.

Involuntary Job Loss

Two months before embarkation, your travel partner loses his job and can no longer afford to go on vacation. Without insurance, you may be left holding the bag to either pay an additional single supplement to continue with your plans, or to cancel and get hit with the full force of the cruise line's cancellation policy.

Note: Not all policies offer job-loss coverage, and not all policies cover both you and your travel companions; check the terms of your policy and ask the insurer if it's available as part of a package or add-on service.

War or Terrorism

Incidents related to terrorism and labor strikes may be included in insurance policies. However, like so many other aspects of insurance, there are caveats. It's always advisable to carefully check your policy's description of coverage to determine how these events are covered.

For example, sometimes a policy will cover a traveler if an act of terrorism occurs in his/her hometown or trip destination within a certain number of days of embarkation -- as few as seven or as far out as 30 days. However, if you're just nervous about terrorism and want to cancel a trip to a destination that has not experienced a recent attack, travel insurance will not cover you -- unless you purchase more expensive "Cancel for Any Reason" coverage.

Does Everyone in the Group Need Insurance?

Yes ... and no. It's not strictly necessary for everyone in your group to purchase a policy, but you'll receive more comprehensive protection if you do.

The first thing to know is that your insurance policy only protects you; if you want the rest of your family or travel companions to have the same protection, then they must be added to your policy (or take out their own). The one exception is that some policies cover children under 17 traveling with an insured guardian at no additional charge. Check the policy's fine print.

However, one of the most appealing aspects of travel insurance is the fact that traveling companions and family members (spouses, domestic partners, children, grandparents, grandchildren, daughters- or sons-in-law, nieces and nephews, etc.) count when it comes to covered reasons for canceling your cruise. If your travel companion falls ill and can't make the cruise, or your aging mother is rushed to the hospital, your policy should reimburse you for canceling your trip.

Take this example: Sue and Jim are traveling together. Sue buys an insurance policy, but Jim does not. A week before the cruise, Jim gets appendicitis and must cancel his trip. Since he doesn't have trip insurance, he forfeits all the money he's paid to the cruise line and airline. Since Sue has insurance, she can cancel her trip and make a claim on this "event" (her traveling companion getting sick and canceling). She can do this since her policy includes traveling companions in its cancellation coverage.

But it gets trickier. Say it's Jim's father, not Jim, who gets sick, forcing Jim to cancel his cruise. In this case, Sue is also out of luck, despite her insurance policy. That's because her policy protects her if something happens to her travel companion and he's forced to cancel -- but not if he cancels because something happened to a member of his family not traveling. However, if they both had travel insurance, Jim could be reimbursed for canceling his cruise because his father's illness is covered, and Sue would also be reimbursed because her travel companion canceled for a covered reason.

What's Not Covered?

Insurance policies of all types are tricky, and it's not always clear what's covered and what isn't. When you're researching policies, carefully read the description of coverage and call the insurer to resolve any questions you may have. Here are a few things that aren't usually covered by travel insurance:


Don't bother filing a claim because it rained each day of your Caribbean cruise. Inclement weather is not covered. Of course, if a hurricane impacts your trip, then trip delay, trip cancellation or trip interruption coverage may be available to you, provided you purchased your insurance before the hurricane became a named storm.

Disease Outbreaks/CDC Advisories

Very few insurers offer cancellation options based solely on advisories issued by the CDC or other government agencies. If you feel you may need to cancel a trip entirely due to a known outbreak of disease in your destination, such as coronavirus, your best option is to buy a policy that allows you to cancel for any reason.

Medical benefits on policies you purchase after an outbreak becomes a "known event" may be severely limited. During existing outbreaks, you should research policy choices carefully before purchasing, as some will still provide medical coverage for travelers who become ill with the disease in question, while others will not.

If you purchased a policy prior to the outbreak and become ill or are quarantined during the trip, you should contact your insurer as soon as possible, just as you would for any other illness or covered event.

Other policy options, like trip interruption, travel delay and missed connection coverage will typically cover you in the unforeseen event that your cruise is cut short, your ship is denied entry to the departure port or is quarantined, preventing you from returning home on schedule.

But again, once knowledge of the outbreak is widespread, everything related to it becomes a foreseen issue in insurance terms and some policies cover those, while others do not. It pays to read the fine print of the actual policy documents before you make your purchase decision.

Itinerary Changes

Travel insurance covers your trip but not changes to the itinerary. The skipping or swapping of a port won't warrant a claim. You agree to those things in your purchase contract with the cruise line.

Frequent-flyer Award Tickets

Airline tickets purchased with frequent-flyer miles aren't covered. However, insurers will reimburse the redeposit fee if you cancel the award before embarking on the first leg of the trip or cover the change fee if you must reschedule your return ticket due to a covered event.

A La Carte Policy Additions

In addition to comprehensive packages, insurers also offer a cadre of a la carte add-ons. They may include:

Cancel for Any Reason

As the phrase suggests, you can cancel your trip for any reason (such as concern over traveling to a particular area due to political unrest or disease outbreaks) -- a luxury normal insurance policies won't allow. Most insurers require this policy add-on be purchased between 14 and 21 days following your final cruise payment.

Read the description of coverage to find out what percentage of your trip deposits are reimbursed under this type of "cancel for any reason" terminology. Sometimes a policy includes 100 percent reimbursement, but the average is 75 percent of the trip costs, and some cover as little as 50 percent.

These policies are more expensive (roughly 40 percent more than a standard policy) and may only make sense in certain circumstances -- say, a particularly costly itinerary or during a known event.

Airline Accident Coverage

This insurance provides extra death and/or dismemberment coverage, but only in the case of an aircraft accident. The insured can select coverage in a variety of dollar amounts; half a million dollars in coverage can cost less than $50 per traveler. While airline accident coverage is typically a supplemental add-on, it might be included in the cost of comprehensive standard policies.

Before buying one of these add-ons to cover excursions that include small planes and/or helicopters, read the coverage documents carefully or contact the insurer to verify that those types of aircraft are covered.

Car-rental Collision Coverage

If your plans include the rental of a vehicle, car-rental collision coverage can be useful. This type of coverage can cost $15 or less per day. One caveat is most policies will only cover cars, not trucks or even vans, so be sure to read the fine print or call your insurance provider for clarification before you reserve your rental vehicle.

Upgraded Medical Coverage

Some companies offer an add-on that upgrades the amount of medical coverage and/or lowers your deductible.

Emergency Evacuation

While evacuation/repatriation is generally included in top-of-the-line policies, you may also purchase more comprehensive, standalone evacuation policies from companies like MedJetAssist. The company will send a plane and medical personnel to you no matter where you are and no matter what your health crisis is. You get to choose where you'll be evacuated to ... no questions asked.

A standalone emergency evacuation policy is a good choice if you don't plan on getting other insurance but still want coverage for a medical emergency.

Adventure Travel

Some insurance companies provide additional coverage for those participating in extreme sports or other high-risk activities on their vacation. Berkshire Hathaway Travel Protection's AdrenalineCare, for example, offers an upgraded medical expense limit and emergency evacuation limit, as well as an adventure sports exclusion waiver covering more extreme sports than the average policy. This type of policy can apply to scuba diving, rock climbing or even wind surfing.

Types of Travel Insurance: Primary, Secondary, Third-Party and Cruise Line

Not all travel insurance policies are the same, and you need to know which type you're buying, in addition to specific coverages. Just about every cruise line on the planet offers its own travel protection program, but it might not be the comprehensive policy you desire.

Cruise-line insurance usually offers secondary coverage (see below) and is more limited than similarly priced coverage you can buy on your own. (For example, cruise-line coverage generally doesn't cover its own financial default.) Third-party travel insurance companies offer more inclusive policies that provide more protection, and these are often the best bet.

As you look at plans, you'll notice two main flavors of insurance policies: primary and secondary. Primary insurance kicks in the moment something goes wrong -- before or during your trip. Secondary insurance means that you must attempt to collect on any private insurance policies before the trip insurance coverage activates.

For example, if you have secondary insurance and someone steals your camera from your bag in St. Mark's Square, you'll need to try to collect on your homeowner's or renter's policy first. Therefore, secondary insurance can be problematic if the insured can't easily cover out-of-pocket expenses while waiting for insurance reimbursement -- first from your primary plan and then, if not covered, from your travel insurance.

It might not be clear from the outset which type of plan you're looking at, so you need to read the terms carefully. Hint: Primary coverage is usually more expensive, but it generally combines better coverage with the ease that immediate claim service brings. Also, in a package policy, some coverage such as trip cancellation and travel delay might be primary, while others including lost baggage and medical coverage can be secondary.

If you're considering secondary insurance, be sure to review your primary medical coverage before deciding. Will you be out-of-pocket for any medical expenses overseas? (Note: The Social Security Medicare program will not cover hospital or medical expenses that you incur outside of the United States.)

How to Buy Travel Insurance

You can purchase travel insurance through your cruise line, travel agent, a specific insurance provider or even a travel-insurance aggregator site like InsureMyTrip.com. (See below for a list of trip-insurance companies and insurance comparison sites.)

Third-party insurance providers and aggregators can often help you with coverage that is specific to cruise travel (like expenses for catching up to your ship if you miss embarkation due to a covered issue.) Ask your travel agent for guidance; he or she will have knowledge of a variety of insurance company policies and can help match the best policy to your needs. Always comparison shop, looking at what amounts of coverage you get for what price.

No matter which policy you select, you want to be sure that it is underwritten by a reputable and licensed insurer; companies are regulated by state insurance departments. The U.S. Travel Insurance Association is a good place to start to research licensed insurers in your state.

It's also easy to search online for feedback on particular insurance providers. Travel-insurance aggregators like SquareMouth will show you the underwriter for each policy and how it is rated by the A.M. Best Company (an agency that rates financial institutions), as well as provide reviews from previous purchasers.

When to Buy Travel Insurance

You can purchase insurance plans up to 24 hours before your trip departure date, but we don't recommend waiting that long. If you do wait, you may not be eligible for many important benefits, such as the waiver of the pre-existing conditions clause.

If you want to be covered for pre-existing medical conditions, you should buy insurance at the time you make your final cruise payment. Not all policies offer pre-existing coverage, but among those that do, each insurer dictates its own coverage window. The deadline is usually 10 to 15 days after making that final payment -- or after booking your airfare, if you do that first.

If you aren't eligible for this waiver, your insurer will look back into your medical history (ranging from 60 to 180 days depending on your policy) and will not cover any condition for which you sought medical treatment during that time. (We're talking everything from eczema and asthma to heart angina and strokes.)

When it comes to buying travel insurance, don't worry if you've paid for your cruise but haven't yet purchased your airline tickets. You can estimate the airfare cost when buying your travel insurance and then give your provider your exact travel itinerary once those tickets are booked. Likewise, if you're arranging your plane tickets first, buy your travel insurance within two weeks of that purchase, and enter your full cruise fare, even if you have not purchased it or have only paid the deposit.

You just need to be sure to pay for travel insurance within the booking window of whichever travel purchase comes first. If reimbursement is required, it will be based on your actual receipts for the purchases, not your estimates at the time you purchased your insurance.

Remember, too, that you can't purchase travel insurance and expect it to cover events that are already in motion. For example, you book a Caribbean cruise that departs during hurricane season but procrastinate on purchasing travel insurance. Once your local weatherman announces that a hurricane is howling along the path of your cruise itinerary, it's too late for you to buy travel insurance and be covered for any travel cancellations or delays caused by the storm. You'd only be covered if you had purchased the insurance prior to the naming of the tropical storm.

Real-world Examples

The per-person price paid for a trip insurance policy will vary depending on many factors, including the insurer, where the traveler lives, the traveler's age, cost of the trip, when the policy is purchased (i.e., at the time of the trip deposit or later), pre-existing health conditions and what the policy covers.

Here are some examples of what you might expect to pay.

Policy to Cover a 7-Night $1,599 Mediterranean Cruise.

For example, Travel Guard's Preferred plan offers extensive primary coverage including, but not limited to, the following:

  • Trip cancellation = 100% of insured trip cost
  • Trip interruption = 150% of insured trip cost
  • Trip interruption (return air only) = $750
  • Trip delay = maximum of $200/day, with coverage capped at $800 total
  • Missed connection = $1,000
  • Baggage and personal effects lost, stolen, or damaged = $1,000
  • Baggage delay = $300
  • Medical expense = $50,000
  • Emergency evacuation = $500,000
  • Accidental death & dismemberment = $30,000

If you're between 35 and 59 years old and plan to insure a cruise fare of $1,599 per person, the cost of Travel Guard's Preferred plan would be approximately $125 (the price varies by a few dollars by age). The per-person cost edges up to just over $150 for 70-year-old travelers, then jumps to $282 for travelers over age 80.

You can also elect "add-on" coverage. For example, an extra $10 gets you upgraded medical expense and emergency evacuation coverage. Spend another $95 and you can add 75 percent Cancel for Any Reason coverage; 50 percent reimbursement is available for a more moderate extra charge of $23. Car rental collision coverage is also available for just over $13 per day.

Annual Fee for Medical Evacuation Family Coverage

MedJetAssist offers annual policies for individuals and families. Residents of the United States, Canada and Mexico are eligible for these plans, which cover medical evacuation and repatriation, both domestically and when traveling outside of the country of residence.

The company ensures that a jet will be available whenever the insured needs it; policy members who are hospitalized out of the country can choose to be transported to any hospital of their choice around the world. Annual family memberships start at $325 for domestic travel (policies for individuals start at $189/year), while short-term memberships start at $99.

Bottom Line

In the end, only you can determine if trip insurance -- and which type -- is right for you.

Can you afford to lose the money you've spent on this cruise vacation? Can you roll with the punches when the airline loses your luggage? Do you have an elderly or ill relative who may suddenly require your assistance, causing you to cancel your cruise? What if you lose your job? What if you get promoted and can no longer take time off to go on vacation?

The answers to these questions will guide you to the conclusion of whether trip insurance is needed or not. Determine your tolerance level for loss and go from there.

Travel Insurance Resources

Trip Insurance Companies

Travel Insurance Comparison Sites

Medical Evacuation Services

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