Notice: We are not insurance professionals. What’s mentioned below is our interpretation based on reading the policies provided by the insurers mentioned below. If you have questions about coverage, consult your insurer.
Cruzely.com is an affiliate with the travel insurers mentioned in this article. We receive a small commission (at no cost to you) if you purchase insurance through the links included in this article.
You don’t have to look far to see examples of where insurance for your trip can definitely pay off.
Just in the past few years 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 a season of hurricanes, whose tracks took them right through the heart of the Caribbean and Florida, causing cruise lines scramble to adjust itineraries. Follow that with mechanical issues aboard cruise ships, which in the past have caused cruise lines to cancel trips and adjust the schedules of others.
All of these are just a few examples we’ve seen over the past few years. 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. (Note that when cruise lines cancel trips they often provide refunds to passengers. Other travel arrangements, however, may not be covered.)
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 to add coverage when buying your trip — many people opt for this protection.
Let’s be clear: Any coverage is better than no travel insurance on your cruise. That said, there are quite a few reasons why you may 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.
It all comes down to the specified reasons for cancellation of your trip.
Say you have to cancel your trip. Most people don’t realize that having travel 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 just cancel and get your money back. You get a refund only if the reason for the cancellation comes from one of the reasons laid out in the insurance policy.
(Note: The insurance sold by cruise lines now usually includes “cancel for any reason coverage” that pays you back 75% of your fare as cruise credit should you cancel on a whim. To get 100% of your money back, you must cancel for a predetermined reason laid out in the policy. Most third-party insurers will sell “any reason” coverage that allows you to cancel for any reason you want and be compensated. It does cost extra.)
We have found that most third-party travel insurance plans actually offer more reasons that you can cancel your trip and get all of your money back.
For Royal Caribbean’s Travel Protection Program, that list of predetermined reasons where you’ll receive 100% of the fare paid back includes many common things, such as sickness or death of you, your travel partner, or immediate family.
It also covers things like if your home is made uninhabitable by fire, flood, vandalism, or natural disaster. As well, if you have to serve jury duty or get in an accident on the way to the port, you are covered.
But third-party insurers typically cover these items and many more. For example the list of predetermined reasons that are covered by AIG Travel Guard includes all of the following in addition to what’s mentioned by Royal Caribbean’s plan:
- Your destination being made uninhabitable or inaccessible due to a natural disaster
- Being called to active military service (or leave is revoked)
- A terrorist attack in the city you’re traveling to within 30 days of your arrival
- You are laid off from your job (assuming you’ve been there at least one year)
- You are required to work
- You are the victim of an assault within 10 days prior to your departure date
Chances are that few people will have these issues pop up, but it is nice to know they are covered should they cause you to have to cancel your trip. 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 case 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 coverage, 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.
However, compare that to the “Gold” plan offered by AIG. For emergency evacuation you are covered 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 sickness or injury that you had within 60 days before the start of your policy. Royal Caribbean has the same 60-day policy. Travel insurer 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 Travel Guard, for example, the pre-existing conditions requirement is waived if you meet several simple requirements, including purchasing insurance within 15 days of your initial trip payment. (There is an additional charge for this waiver.)
Either way, it’s important to note that pre-existing conditions can be covered by third-party travel insurance, but usually 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.
When we search for traditional travel insurance from Travel Guard, however, a $4,500 trip costs just $281 for a couple — a savings of nearly $100 for generally better coverage.
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.
Note: Cruzely.com is an affiliate with the travel insurers mentioned in the article above. We receive a small commission (at no cost to you) if you get a quote for insurance through the links included in this article.