When you make your cruise reservations, you will almost certainly be offered the opportunity to purchase travel insurance – whether you book through a travel agent, an internet site, or directly from the cruise line. You may be tempted to save a few dollars by skipping the optional cruise insurance. These are three things you should know when making that decision.
(1) It Is Definitely Worth It To Buy Cruise Insurance.
As a general rule, it is always worth it to buy some type of cruise insurance. The expense that you would likely incur if you had to cancel or interrupt your trip would far exceed the premium amount for a reasonable cruise insurance policy. Once you have made cruise reservations for your entire family, you will likely have run up a meaningful bill– likely thousands of dollars. (See recent summary on prices of various family cruises.) Most cruises are fully refundable until the final payment date. That date, however, typically falls 90 days in advance of the cruise. If you cancel after the final payment date, you will incur a monetary penalty. The penalty increases the closer you get to the embarkation date – anywhere from 25% to 100 percent.
A wide range of life events can pop up for you or a member of your travel party in the three months before a cruise that could require canceling. It doesn’t necessarily mean that something bad or catastrophic has to happen. For instance, I had a friend who discovered that she was pregnant shortly after the final payment date. By the time her cruise was set to depart, she would have been too far along in her pregnancy to board the ship, under the applicable rules of the cruise line. Pregnancy was a covered event under her cruise insurance policy, so she was relieved to learn that she wasn’t going to forfeit any of the money that she had already paid the cruise line.
While serious illness or death would obviously be covered, many other circumstances outside of your control could force you to cancel your paid trip. In addition to the pregnancy example, many cruise insurance policies also would cover cancellations due to: extension of the school year (e.g., excess snow days!), jury duty, court subpoena, involuntary job loss, robbery of your home or business, victims of certain crimes, and various negative events at your destination.
The risk of forfeiting the entire value you paid for your family’s cruise should itself warrant insurance. But, your potential losses are not capped by the value of the cruise. There are many potential mishaps that you may encounter while on your vacation that could add thousands of dollars in unexpected expenses. For instance, the cost of a medical airlift or evacuation should you or a family member fall ill while in the middle of the ocean or in a foreign country with sketchy medical service. A true medical evacuation and transport could easily exceed $25,000. (See, e.g., USA Today, Five Myths About Medical Evacuations and Cruise Safely, Medical Evacuation From a Cruise Ship).
You may wonder whether your regular medical insurance or homeowner’s insurance and the like may cover some of these risks. That is highly unlikely. If you are considering that as a fallback, you should confirm with your insurance company before departing.
In short, travel insurance helps protect you and your family if things go wrong before or during your trip. You should expect a good travel insurance policy to cover:
- Medical emergencies on the cruise ship, on excursions, or while the ship is in port (cost of actual medical care)
- Costs if you get left behind by your cruise ship
- Travel costs if you have to cancel your trip at the last minute (for a covered reason)
- Costs if you have to leave your trip early
- Costs of emergency medical evacuations (costs associated with removal and transport)
If you don’t purchase travel insurance and something goes wrong, you will be on the hook financially for solving the problem, and it will likely be up to you to work out any necessary arrangements (as opposed to having someone else facilitate).
(2) You Can Wait To Buy Cruise Insurance Until Shortly Before Final Payment.
You will be offered travel insurance at the time you make reservations. But, you are not required to purchase it right away. Most cruises are fully refundable until the final payment date. So, you are not actually risking anything until that payment is made. You can wait until closer to that final deadline.
As you are deciding when to purchase cruise insurance, be mindful of the review period for the policy. You will have some period of time to review the policy closely and change your mind for a full refund of the policy premium – usually about 10 days. Thereafter, the premium is non-refundable. If you purchase the policy too early, you could easily face the situation where you cancel or change your cruise prior to the final payment deadline, but cannot get a refund on the insurance – a policy that is no longer of any use to you.
Knowing that you don’t have to buy cruise travel insurance immediately, you have time to shop around for the best fit for your family — which leads to the third essential thing you should know.
(3) You Can Buy Cruise Insurance Outside The Cruise Line.
While most cruise lines offer some form of travel insurance, the cruise line offering is often not your best option. Most travelers are better off buying cruise insurance somewhere else where they will likely get better coverage at a cheaper price.
The policies that cruise lines offer often have less attractive features than other policies. For example, many cruise lines offer to let you book another trip if you have to cancel your cruise. But, limit you to rebooking within 12 or 24 months. In contrast, third-party insurance companies will just send you a check to cover your costs and let you decide how and when to use the money.
Another potential unattractive feature found in some policies is that they provide only “secondary coverage,” rather than primary coverage. In other words, the secondary policy will only apply once you have attempted to obtain payment from your other insurance sources, such as homeowners, private medical, credit cards, etc. Secondary coverage delays your ability to get reimbursed.
Once you look beyond the cruise line’s offerings, you have many options open to you. If you book through a travel agent, the agent will have policies to sell and/or recommend. Also, many of the major insurance companies that offer home and auto insurance also offer travel or cruise insurance. So, when looking for cruise insurance you could start by asking your insurance agent what they can offer you. You should also ask friends and family that have bought travel insurance in the past.
Ultimately, you will need to examine the different options side by side. Compare what different travel insurance companies cover, what they charge, and how much they cover. Some companies may only cover 50% of your travel expenses for last-minute cancellations. Some will cover more and some may even cover less.
Several websites offer tools comparing travel insurance: www.insuremytrip.com; www.squaremouth.com; www.tripinsurancestore.com.
Common features of a comprehensive policy include coverage for trip interruption, trip cancellation, trip delay or missed connections, baggage loss or delay, medical expenses, medical evacuation, repatriation, involuntary job loss, or pregnancy. A good policy will extend coverage when these events happen to you, or you have to cancel because the event happens to a travel companion. You will also want a policy that provides full reimbursement regardless of when a cancellation occurs.
Shopping for travel insurance may not be as fun as perusing shore excursion options, but it should provide you and your family peace of mind, even if you never have to use it.
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