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Cruise Line Scams: Travel Insurance
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:
Flickr photo by TheTruthAbout
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?
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Flickr photo by TheTruthAbout
Filed under: North America, Canada, United States, Travel Health, Cruises, Central America, Caribbean
Reader Comments (Page 1 of 2)
Zitka Kammerer Jan 18th 2011 8:41PM
Cruise line travel insurance or travel insurance in general, is not a scam. All travel providers, whether a cruise line or a tour operator, offer this service as an option, and it is up to the client to accept it or decline it. The topic of travel insurance is a matter of educating the consumer about his/her options, for travel insurance protection. Yes, travel agencies do make additional commission when they sell travel insurance with the vacation; that's how they earn part of their paycheck. However, the idea is to recommend to a client, to protect his/her travel investment, not just to make additional commission.
The question is not about "can I cancel for any reason?" Clients can always cancel for any reason, the cruise line or tour operator won't and can't force you to take a vacation. The question, when purchasing travel insurance protection, should always be, "am I covered to cancel for any reason?". Two different questions.
Travel insurace companies offer di ... More to accept it or decline it. The topic of travel insurance is a matter of educating the consumer about his/her options, for travel insurance protection. Yes, travel agencies do make additional commission when they sell travel insurance with the vacation; that's how they earn part of their paycheck. However, the idea is to recommend to a client, to protect his/her travel investment, not just to make additional commission.
The question is not about "can I cancel for any reason?" Clients can always cancel for any reason, the cruise line or tour operator won't and can't force you to take a vacation. The question, when purchasing travel insurance protection, should always be, "am I covered to cancel for any reason?". Two different questions.
Travel insurace companies offer different policies, different coverage. It is in the best interest of the consumer, to find out what type of policy he/she is getting. That question can only be answered and addressed by the Travel Insurance Company. Additionally, most companies offer "pre-existing conditions coverage", provided the policy is purchased within a time frame specified by the insurance company, usually 15 days after vacation purchase initial deposit. This has to be clearly explained to the client.
Whether the client is purchasing a vacation online, direct with the vendor or through a travel agent, he/she should take the time to talk to the Travel Insurance Company prior to purchasing the policy to make sure all questions are properly addressed. No travel agent should be answering these questions. The role of the travel agent is to recommend purchasing travel insurance protection. However, consumers need to address specific questions about the policy coverage, file claims, etc... with the Travel Insurance Company.
Last but not least, I have had clients book and cancel an entire European Vacation and they were refunded their money by Travel Guard prior to travel. They had a policy that had a medical cancellation clause and they were protected. It was a matter of helping them choose the right policy, for their needs.
In any case, information about this subject can be easily found on-line or if working with a travel agent, he/she should be able to provide phone numbers to the client, for the Travel Insurance Company.
kaye g.ullman Jan 18th 2011 8:48PM
we had to cancel a Xmas cruise on Oceania this past Dec.2010 due to my illness.
The insurance bought through Oceania reimbursed us very quickly .
Karley Woodard Jan 19th 2011 12:08AM
I think travel insurance usually is a scam, or at least not worth the money.
Helga Wetzold Jan 19th 2011 1:41AM
Sounds very noble. Reality it is not. I had PLATINUM insurance from Princess Cruise Line. Fell needed 8 stitches, sprained ankle and hand. Dr on ship was great, told me don't worry we put bill on your credit card and the insurance will reimburse you.
Called insurance when I got back, told me have to apply to Medicare, they won't pay because it happened in another country, but you still have to apply. Getting an answer out of Medicare is another waste. Then applied to secondary insurer who also would not pay. So now I paid for Insurance and $500.00 for services on Board. That was in November. Not only was my cruise a total waste since I could not walk, insurance does nothing about it but have never gotten any answers accept forms I requested. Even send it certified, so far not one penny from insurance company. Was my 9th cruise, never bought insurance before and with this treatment do not even want to go on a cruise again. Princess deceived me and their loyal customers by using an insurance company which collects money but makes it impossible to get money paid. In my opinion the biggest ripp off. Wonder what happens if someone really gets sick???? Very SCARY!!!
Lissette Jan 18th 2011 8:45PM
BerkeleyCare was wonderful during my family's trip to the Bahamas aboard Royal Caribbean in 2009. My father passed away while we were in Nassau. Needless to say, this was sudden. BerkeleyCare provided the assistance we needed in such a confusing and scary time. Sometimes we don't think about it but the cost of medical care, etc. is ridiculous outside of the U.S. where your insurance card may not work. We had to pay for 3 days hospital stay up front and the return of his body cost us almost $10,000. It is crazy not to get it.
Mayra Enquist - President, Holiday Travel World Jan 18th 2011 8:55PM
As a travel consultant that sells third party travel insurance, let me clarify the misconception that's being portrayed here. First off, that "higher percentage commission" can only be achieved if I'm licensed to sell, which by the way, cost for same is reimbursed by insurance company, so it's a win, win, for me, the insurance company and oh, yes, my clients, as I handle all claim procedures, on their behalf, as a courtesy, for their business. Maybe you should be highlighting travel consultants, as I can't think of many businesses that cater "service" to their clientele. It's now a lost art! If anyone has experienced having their cruise line handle all their claim procedures, I'd like to know. Will not hold my breath while waiting!
Barb Jan 18th 2011 9:00PM
We had to cancel our cruise just as we were about to board a Royal Caribbean ship last year. We were traveling with my father, who suddenly became ill. I called from the port. We had every penny back within a couple of weeks. Worth every penny!
Kel Jan 18th 2011 9:20PM
As a travel agent I am highly offended by this AOL article. We offer our customers travel insurance and in this day of airline delays, lost baggage, etc tht portion is valuable. Also we have had at least two cases in the last year where a customer had to cancel for a medical reason and would have lost a substansial portion of their cruise cost without insurance. Personally I carry travel insurance and believe in it highly. If a customer does not buy insurance we have them sign a release to protect us in the event something happens they acknowledge that they were offered instuance and declined it. As for our prefferred insurance we use Travel Guard, they have worked with us very well and have been timely in their handling of claims.
Jeff Jan 18th 2011 9:44PM
I have to agree with Kel. We have been in the travel agency business for over 30 years and would never think of not offering and explaining travel insurance to our clients. If you trust your travel agent with your travel plans then trust us with your insurance. I also find this article misleading and one sided. What would make someone think that they can get the best coverage for the best price in travel insurance by using the agent that sells them auto and home isurance? Because they sell insurance? Not quite. We have used TravelGuard for years and find them to be honest and very price competitive for the coverage they offer. We also have never had a complaint about their handling of a claim. I think Mr. Owens needs to do more research and be objective for his next 15 minutes of fame.
James Owens Jan 18th 2011 10:37PM
Since it seems you don't know what you're talking about, maybe the term that best suits this article is: "Cruise Line "Questions" : Travel Insurance. Sometimes we are such "experts" that we forget that there are people who work in, and are using the particular thing daily, maybe we can use their expertise in such matters.
stephanie Jan 19th 2011 9:10AM
I agree with the responses here . I have bought travel insurance for almost all of my crusies. A few years back I had purchased a cruise and took out insurance with Travel Guard. About 3 weeks before my trip my mother (she was not going on the trip) became seriously ill and I had to cancel. The insurance company was great, just a few forms to fill out and I received practically a full refund. They were great. I will always insure my trip !!!
Holly Jan 18th 2011 10:20PM
If you need to be Medi Flighted to the states- you will wish you purchased travel insurance! Most people do not even consider the possibility of an injury while on vacation or consider the quality of care they would receive outside the U.S if they were injured. Our family of 17 recently took a Carnival Cruise to Jamaica and 2 family members were seriously injured in a jetski accident. The hospital in Jamaica was NOT equiped to handle their injuries (the IV line was held up by a thumb tack on the wall). The travel insurance reimbursed the cost of the Medi Flight, the cost of the airfare for the other 2 family memebers who had stayed behind in Jamaica with the injured, in additon to several other expenses. The people from the travel insurance company were very helpful in assisting us with coordinating everything that needed to be done. Carnival did nothing to help the 13 of us who had to board the ship after the accident.
Linda Jan 18th 2011 10:44PM
As a former travel agent, I would highly recommend travel insurance. I have seen both sides of the story. On a personal note,my mother- in- law recently went on a cruise an unexpectedly died. This is something that you think would
never happen to anyone you know- but trust me, it does. The insurance
company was very helpful throughout this process and along with the cruise line, (RCCL), helped us navigate the details of this unexpected event. And yes, my husband and I received claim forms from the insurance company that we were not expecting,nor did we even think of making a claim. A check arrived in the mail today for the unused portion of her cruise. Personally, I have never traveled without travel insurance and I will always purchase travel insurance. I totally disagree with this article and may I also say that this is the first time that I have
felt strongly enough to comment on articles on the Internet.
Jim Leary Jan 18th 2011 10:50PM
Why buy travel insurance? To protect your vacation investment. Why do we buy car insurance? Homeowners insurance? Health insurance? For unforeseen events. As a travel agent, I always offer travel protection. Most people decline it, and those who do are FURIOUS when a family member gets sick, they can't go on the cruise, and they can't believe the cruise line won't be empathetic and give them a full refund.
I have heard more stories of people who broke their ankle playing volleyball, or cracked their head open in the pool, only to get an exuberent bill from the infirmary, and they find out their insurance company doesn't cover them outside of the US.
You hope you never have to file a travel insurance claim..... but if you do, you'll be grateful you had travel insurance.
Susan Heller Jan 18th 2011 11:01PM
We got cruise insurance because we thought my father in-law might pass away before we could go on the trip. He didn't. But I was injured in a freak accident that required medical attention and ruined several days of our Alaska trip. Berkley repaid us for the medical bills not covered by our personal insurance and for the side trips we were not able to enjoy. Princess on the other fought us all the way with the personal injury lawsuit. We finally settled after having to travel across country for depositions. I recommend getting the insurance or at least making sure you are insured on your health policy during your cruise or vacation. Get a rider if you are going to travel outside the USA or wherever you live. Recently, I was in PV Mexico and found myself in the hospital with dysentry polite word for diarrhea...I didn't take my own advice and ended up paying over $3,000.00 in bills. GET THE INSURANCE. Susan Heller.
Terri Jan 18th 2011 11:00PM
You bet your butt that travel insurance is worth it! My husband and I paid an additional $80. each for travel insurance when booking our cruise. A family member became gravely ill, and we had to cancel. We had every penny of our money back in under 3 weeks, minus the $160. cost for the insurance, which was a small pittance to pay for a $4000. cruise! It was WELL worth it!
Zitka Kammerer Jan 18th 2011 11:32PM
I am happy to see how many travel professionals have voiced their opinion about this article. It is sad and dissapointing to see, that someone takes the time to write an article, which lacks substance and does not provide accurate information.
I find that this article is not only misleading, but conveys an erroneous message. Perhaps, in the future, articles like this one, should be written by professionals in the field or industry which is being highlighted. Many travel insurance companies, would have been happy to assist with this article. If Mr. Owens wants a list of some the companies, I will be glad to provide one to him.
It is not fair to attack cruise lines with this type of undocumented/altered information. Many other non-cruise related travel providers offer Travel Insurance protection to travelers. Does that make them part of the scam too?
GAYLA Jan 19th 2011 2:41PM
We will traveling soon on a cruise what co do you suggest for ins
Barbara Jan 18th 2011 11:26PM
I have been on three cruises and for two of them had to make use of the travel insurance. My health is precarious at best and I had to be transported to a hospital in the U.S. both times. You can bet that I will purchase the travel insurance each time I am lucky enough to go on a cruise.
My friend had to cancel her cruise on the morning of departure as she got word that her mother had passed away. Because of the insurance she was able to be reimbursed the whole amount of the cruise.
Suziq000 Jan 19th 2011 12:14AM
As a cruise travel specialist I would recommend that you ask for COMPLETE explanation and price breakdown for the type of travel insurance you are purchasing. It is highly "recommended" that I sell the travel insurance BUT I make sure to thoroughly explain the various prices in addition to what they will and will not cover. I sell Travel Guard Insurance along with the cruises but I am always very careful to make sure that my customers know what they are buying. I also receive a commission from selling the travel insurance but ultimately it is up to my customer to decide whether they want to spend that extra money. I honestly try to provide my customers with the best information that I can and never "pressure" them into purchasing something they do not want.