4 Ways Third-Party Travel Insurance Is Better Than What the Cruise Lines Sell

You don’t have to look far to see examples of where insurance for your trip can definitely pay off.

Just a few months ago there were major outages in computers behind some of the nation’s largest airlines, causing cancellations and delays in airports around the country. Then there was Hurricane Matthew, whose track took it right through the heart of the Caribbean, causing cruise lines scramble to adjust itineraries. Follow that with a mechanical issue aboard the Carnival Liberty, which caused the cruise line to cancel a couple of trips and adjust the schedules of several more.

342x342 Beach ChairAll of these are just a few examples we’ve seen over the past few months. The truth is, delays and disruption can hit your trip — and chances are you won’t see them coming at all. This is one of the reasons why many cruise passengers elect to purchase insurance for their trip, even though the vast majority of people don’t see delays.

For those purchasing travel insurance, they rest easier know that if something does disrupt their trip, they won’t have the same worries as unprotected passengers in getting their money back on the cruise.

But as we all know, insurance is also a business — and a lucrative one at that. Seeing the profit potential, cruise lines have gotten into the insurance business. You might have seen their offerings when you purchased your cruise. With their convenient purchase process — you simply click a checkbox when buying your trip — many people opt for this coverage.

However, there are quite a few reasons why you would want to consider traditional travel insurance through a third party insurer instead of what the cruise lines offer…

Third Party Insurance Usually Offers More Coverage

Now, you should know that not every insurance company offers the same exact coverage. Nor is every cruise line’s insurance the exact same. That said, in general third-party insurance offers much better coverage than the cruise line plans.

Say you have to cancel your trip. Most people don’t realize that having trip insurance only pays if you cancel for predetermined reasons. So if you simply wake up the day of your trip and don’t want to go, you can’t cancel and get your money back. (Note: Most insurers will sell “any reason” coverage that allows you to cancel for any reason you want and be compensated. It does cost extra.)

For Royal Caribbean’s Travel Protection Program, that list of predetermined reasons includes only:

  • Sickness, injury or death to you, your traveling companion, or members of your immediate family
  • Involvement in a traffic accident on your way to your cruise
  • You home is made uninhabitable by a natural disaster
  • You are called into active duty by the military to provide aid/relief for a natural disaster
  • You are subpoenaed or called to jury duty

Compare that to the list of predetermined reasons that are covered by Allianz, a third-party insurer: (Get a quote from Allianz here)

  • Sickness, injury or death to you, your traveling companion, or members of your immediate family
  • You become pregnant
  • You need to attend to the birth of an immediate family member’s child
  • Your tour operator, airline or cruise line ceases operations due to
    financial default
  • Involvement in a traffic accident on your way to your cruise
  • You’re summoned by a court order or subpoena to serve on a jury or
    appear in court
  • You or a traveling companion legally separate or divorce after your
    plan’s effective date but before your scheduled departure date
  • Your primary residence is uninhabitable because of a natural
    disaster, fire, flood, burglary or vandalism
  • Your destination is uninhabitable because of a natural disaster, fire,
    flood, burglary or vandalism
  • You or a traveling companion is hijacked
  • A terrorist event happens at your U.S. or foreign destination within 30
    days of the day you’re scheduled to arrive
  • You or a traveling companion is terminated or laid off from a company
    after your plan’s effective date
  • You or a traveling companion, serving in the U.S. Armed Forces, is
    reassigned, or have personal leave revoked, except because of war

Put like this, it’s easy to see the traditional coverage offered by third-party travel insurance can often be more comprehensive than what the cruise lines sell.

Third Party Insurance Can Offer Higher Compensation

One of the big reasons that people purchase travel insurance isn’t just for in they cancel their trip. The medical coverage is also a big draw. Many people are scared of what happens in they get sick on their trip and have to be admitted to a foreign hospital. In many cases, traditional health insurance doesn’t apply in foreign countries, so travelers are on the hook for those bills. Luckily, travel insurance will typically cover foreign medical expenses.

But there can be major differences in the coverages, depending on which insurance you pick. Carnival’s Travel Insurance Program offers decent medical coverage for its purchasers. Medical evacuation is covered up to $30,000. Repatriation (the cost of getting you back home) is covered up to $30,000 as well. Accident and sickness medical expenses are covered up to $10,000 each.

Compare that to the “Classic” plan offered by Allianz. For emergency medical evacuation and repatriation of up to $500,000. Yes, that’s half a million. Emergency medical services are also covered up to $25,000 — 2.5 times as much as what Carnival’s plan offers.

Other coverage of the plans typically (but not always) compensate at rates equal or higher than what cruise lines provide.

Third- Party Insurance Can Be More Lenient on Pre-Existing Conditions

Do you have an on-going illness? Well the bad news is that most plans exclude pre-existing conditions from their coverage. So if you have an ongoing sickness that needs emergency treatment on your cruise, then you’ll be footing the bill yourself.

For instance, Carnival’s pre-existing exclusions specify any illness, disease, or other condition that you received or were recommended to receive a test or exam within 60 days before the start of your policy. Royal Caribbean has the same 60-day policy. Allianz actually has a 120-day policy and TravelGuard has a 180-day no-go on pre-existing conditions.

But with third-party insurance you can often get pre-existing coverage to cover things that wouldn’t otherwise be under your policy. Sometimes this is an additional rider that you must purchase. Other times it is included automatically. With TravelGuard, the pre-existing conditions requirement is waived if you meet several simple requirements, including purchasing insurance within 15 days of purchasing your trip. (Get a quote from TravelGuard here)

Either way, it’s important to note that pre-existing conditions can be covered by third-party travel insurance, but not with the insurance sold by the cruise lines.

Third-Party Insurance Is Usually Cheaper

You would think that better coverage would mean a higher price. When it comes to travel insurance, that isn’t always the case.

Take a look at this Carnival cruise, which costs nearly $4,500. Insurance for this trip runs $189 per person — or $378 for a couple traveling together.

Insurance Carnival prices
Carnival charges $189 per person for its insurance

When we search for traditional travel insurance from Allianz, however, a $4,500 trip costs $348 for a couple — a savings of $30 for generally better coverage.

A third-party insurer costs less.
A third-party insurer costs less

Keep in mind that rates can vary. It pays to shop around.

If you’re interested in whether you should buy cruise travel insurance in the first place, be sure to read our article explaining all the ins and outs.

For third-party travel insurance, you can get a free quote and purchase directly through the provider. We’ve listed the major companies and their websites here:

Allianz Travel Insurance: http://www.allianztravelinsurance.com
AIG TravelGuard: https://www.travelguard.com
CSA Travel Protection: https://www.csatravelprotection.com
Travelex Insurance: http://www.travelexinsurance.com/

Disclaimer: Cruzely.com is an affiliate with the travel insurers mentioned in the article above. We receive a small commission if you purchase insurance through the links included in this article.