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.
Trip InterruptionSay 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 CancellationYou'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 ConnectionYou'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/LossYou 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 ExpensesOne 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 ProviderNo 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/RepatriationIf 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 LossTwo 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 TerrorismIncidents 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.
WeatherDon'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 AdvisoriesVery 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 ChangesTravel 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 TicketsAirline 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.
Cancel for Any ReasonAs 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 CoverageThis 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 CoverageIf 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 CoverageSome companies offer an add-on that upgrades the amount of medical coverage and/or lowers your deductible.
Emergency EvacuationWhile 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 TravelSome 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.
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
Annual Fee for Medical Evacuation Family CoverageMedJetAssist 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 LineIn 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.
Trip Insurance Companies
- Allianz Global Assistance: www.allianztravelinsurance.com; (866) 884-3556
- Berkshire Hathaway Travel Protection: www.bhtp.com; (844) 411-2487
- Generali Global Assistance: www.generalitravelinsurance.com/; (800) 874-2442
- HTH Travel Insurance: www.hthtravelinsurance.com; (888) 243-2358
- Travelex Insurance Services: www.travelexinsurance.com; (800) 228-9792
- AIG Travel Guard: www.travelguard.com; (800) 826-5248
- TravelSafe Insurance: www.travelsafe.com; (888) 885-7233