Booking cruises is easy. If you know where you want to go, and the kinds of ships you like, it’s really hard to go wrong. Similar ships offer the same kinds of experiences for roughly the same prices. Going on a Seabourn cruise to the Med is only slightly different than sailing on Silversea or Regent.
Travel insurance used to be the same. Most policies offered similar protection and the companies reliably paid their claims. COVID-19 changed all that. Witness this review published on Squaremouth for a popular “Platinum” travel insurance policy:
My group of 4 were in the Philippines March 12th when the whole world flipped upside down. Had to abandon our trip. Lost thousands of dollars in pre-paid flights and tours. Cost us an extra $5000 to evacuate and get home. [Company name] won’t cover a ******* dime of it. I bought the coverage thinking we’d be ok. They totally screwed us. Would never purchase from them again. Also their 24 hr service is a joke. I tried frantically to get a hold of them from March 11- 20th. Couldn’t even get them to reply to an email. Worthless ******* company. Worthless policy. Offered absolutely zero help through this entire experience. **** them. **** them, **** them, **** them. I hope covid-19 puts them out of business. **** them……**** them.
This policy cost thousands of dollars for four guests and it was sold by a company with a solid reputation. Similar reviews have been written by thousands of cruise ticket holders because their favorite cruise lines won’t give them cash refunds for cruises that were cancelled, or which government authorities deemed unsafe. Both the insurance companies and the cruise lines resort to the fine print in their policies or simply refuse to honor their commitments.
This has made the search for travel insurance policies more critical now than ever before. Buying the wrong policy can cost you thousands in refunds, or hundreds of thousands, if you end up in intensive care or need to be evacuated back to the United States.
Risks you seldom experienced before COVID-19 include quarantines, being turned away from boarding due to Positive tests, having cruises end early due to COVID-19 outbreaks onboard, and cruise lines or airlines going bust.
With these happy thoughts, let’s look at some features you may want to include in the travel insurance policies for your next cruise or resort stay.
Permitted Reasons to Cancel and Receive Refunds for Cruises, Air Fares, Deposits, Taxes, Fees, Etc.
CANCEL FOR ANY REASON (CFAR): This insurance is increasingly rare. It roughly doubles the cost of ordinary insurance, and many policies limit reimbursements to 50% or 75% of the cost of the trip. CFAR policies must be taken out within a few days of making the final payment, or even the same day you place the deposit. You also must buy enough coverage to reimburse the full cost of the entire trip. CFAR claims have reportedly tripled since COVID-19, which is why this insurance is now so difficult to get. On the other hand, it’s the easiest to collect – if you can afford the cost.
CANCEL FOR MEDICAL REASON: This requires a letter from your doctor, and it should be included in any insurance you buy.
CORONAVIRUS CANCELLATION: Many of the newest policies explicitly permit you to cancel a cruise and receive a refund, if you are infected with COVID-19. Believe it or not, most non-CFAR policies, do not provide refunds if you’re infected with COVID-19. They classify it as a “known hazard,” for which the insurance company is not liable, along with sky diving or swimming with sharks.
CANCEL FOR WORK REASON: This is included in many of the more expensive, deluxe policies, but not in the most economical ones. It takes a letter from your boss, or a notarized letter from you –if you’re self-employed – to be refunded cruise costs.
CANCEL FOR FINANCIAL DEFAULT: This in increasingly important, and sometimes included in deluxe policies or as an extra-cost option. (Any extra-cost option is for a very significant risk!) If a cruise line or airline goes bankrupt or ceases operation before your cruise, this will protect what you’ve paid for the cruise. It usually won’t protect you if your travel agent goes out of business since this an even greater risk.
PRE-EXISTING CONDITIONS: If you have a second heart attack right before you’re scheduled to leave, you may not be reimbursed, unless you have this coverage. Usually you get it at no cost, if you buy the policy at the same time you make the deposit on the trip. Though, sometimes it is available within 15 days of making the final payment. It applies to both cancellations and medical events. It’s the best reason for buying travel insurance right away.
TRAVEL DELAYS: This coverage can include anything from getting drunk in a portside bar and missing the ship, to testing Positive at the gangway before the ship sails. Coverage should include everything from a flight to the next stop to having to terminate the rest of the cruise. Usually reimbursements are limited to 100% or 150% of the cost of the cruise.
EMERGENCY MEDICAL: This should be an ample amount ($50,000 or more) to cover “normal” medical emergencies, either on the ship or ashore. If it includes coverage for COVID-19 events, this should be explicitly stated.
CORONAVIRUS MEDICAL: This coverage should be stipulated within EMERGENCY MEDICAL. It will cover the costs of medical and quarantine services, either on or off the ship. Most U.S. medical insurance and Medicare doesn’t cover services rendered outside the United States, and travel insurance often only includes services outside the U.S. Make sure COVID-19 events are covered, and you’re traveling to areas covered by the insurance.
EMERGENCY EVACUATION: I was on one cruise through the Great Barrier Reef in Australia, where there were two evacuations by helicopter from the ship (fractured skull and stroke), and one by Australia’s famed Motorboat Squadron (crushed hand of a crew member). Emergency evacuation coverage takes you from where the emergency occurred to a hospital in the United States. It can include the services a private nurse or physician on a private jet, and often permits a companion to fly with the patient. The final tab can be upwards of $100,000. Some policies now expressly cover emergency evacuation back to the U.S. for COVID-19, quarantine costs on or off the ship, and your airfare if you’re permitted to fly home after a Positive test.
FREE LOOK: This provides a 14-day window when you first buy travel insurance to examine the policy. If you don’t want to keep it, you’re entitled to a full refund. If you buy a replacement product within the same 14-day period, you can often avoid the pre-existing conditions limitation of some policies.
Free Look will also protect you if you need to cancel the cruise you’ve just booked, but it won’t cover anything but the insurance cost. Still, it’s another reason to buy travel insurance immediately when you place a deposit or make full payment on a cruise.
Next Steps
Start by printing a copy of this article and highlight all the coverages you want to be sure to get. Then, contact an experienced travel advisor that can offer advice on insurance products from several companies and tell you what they cost. Generally, it’s not a good idea to buy the policy offered by the cruise line, unless the insurance has been recently modified to include ample provisions for COVID-19.
Another option is to go to Squaremouth. This is an insurance aggregator that sells travel insurance from many companies online, direct to consumers. They also sell to general insurance agents, but their programs for travel advisors hasn’t been released. Squaremouth focuses on travel insurance that is COVID-19 related, and they have detailed offerings from more than 20 companies. You can either buy yourself or ask for your travel advisor’s assistance. Many companies sell similar insurance products through both channels. You can also pay your travel advisor a consulting fee to help you buy insurance through companies they don’t represent.
It’s almost a full-time job to keep up with travel insurance plans and costs. Many of the insurance companies have taken to publishing monthly updates. Try to get assistance from someone who is familiar with the new COVID-19 insurance products and the companies issuing them. Right now, many of these are sold by companies trying to break into this market but, by the time everyone has resumed sailing, these products may be commonplace and available through all the major insurance companies. Don’t hesitate to contact me if you have questions.
SPECIAL BULLETIN: Virgin Atlantic Joins the Party
Dr. Steve Frankel and his wife have sailed on most of the Seabourn, Silversea, Crystal, Azamara, Oceania, Regent, and Windstar ships on more than 40 cruises. Steve’s company, Cruises & Cameras, LLC, partners with LUXE Travel, a FROSCH Company, and the Signature Travel Network. Since the start of the Covid-19 Pandemic, he’s earned two certificates in epidemiology from Johns Hopkins University’s Bloomberg School of Public Health. He’s using what he has learned in six courses, along with his earlier training in measurement and statistics, to help his clients deal with the realities of the pandemic. His most recent book is How to Plan Your Next and BEST Cruise (Amazon, 2019, 186 pages). His email address is Steve@CruisesAndCameras.com.
One thought on “Buying Travel Insurance is More Complex Than Booking A Cruise”
” You can also pay your travel advisor a consulting fee to help you buy insurance through companies they don’t represent.” This is ONLY if said TA is licensed as an Insurance Agent in your state.