Everyone tells you that you need insurance: car insurance, health insurance, homeowners insurance. The list goes on and on. Then you decide you want to go on a cruise and you’re presented with travel insurance. Is it really necessary to purchase trip insurance to go on a cruise?
Let’s be fair; when you think about insurance in general, most times it’s not used. If you’re a homeowner, how many times have you tapped your insurance company for repairs (those living in flood and hurricane-prone areas not included)? How many times have you needed to use your car insurance? Even if you got the insurance company to pay for broken windows or exterior damage, you’ll likely agree that it doesn’t equate to the amount of money you paid over the course of the year.
So now that you’re ready to go on vacation, do you really need to spend money on travel insurance? And since you probably won’t use it, is travel insurance valuable enough to justify the cost?
You might be surprised by the answer.
What Travel Insurance Promises
The promise of travel insurance is that they will cover you in the event of accidental injury, or even worse, death. Should a medical situation arise that requires you to be transported back home, travel insurance promises to get you there and pay for the expense.
Travel insurance plans also promise to cover policyholders if a weather event results in the cancelation of travel plans. Among other things trip insurance covers is:
- Mandatory evacuation
- Terrorist attacks that occur in the destination city (doesn’t really apply to cruises)
- Labor strikes that cause “complete cessation of travel services of your carrier”
- Baggage loss
- Flight delays that delay your travel for more than 5 consecutive hours
The Reality of Travel Insurance
On the surface, travel insurance seems awesome. The promises on travel insurance websites, if true, is pretty awesome. It’s reassuring to know that if I need to be airlifted back to the States, it will be covered. Or if a hurricane causes the cruise to be canceled (which is very rare), my money will be refunded.
Sounds great. But that’s not how it actually works.
First of all, when it comes to medical situations, if you have insurance through work, you are likely already covered for medical emergencies when outside the country.
Second, whether you choose to go through your personal health insurance policy or use the travel insurance policy should you need medical attention during your cruise, you need to know this: You must pay first.
That’s right; whatever policy you use – personal health coverage or travel insurance – you have to pay the bill out of pocket. Then you can submit a claim for reimbursement.
Similar But Not the Same
At this point, there’s really no advantage to using travel insurance. With traditional insurance, you pay a relatively small amount compared to what you get in return. Sure, in the case of car insurance, you’ll have a deductible. But if your car is stolen or totaled, a $100 or even $1,000 deductible is nothing relative to the 10,000 or 20,000 dollars with will take to repair or replace your vehicle.
That’s not the way things work with medical insurance while on vacation. As I’ve said, all expenses have to be paid upfront while you “hope” your claim will be reimbursed.
Nonetheless, there is an advantage to travel insurance. The insurance you have through your job may not cover all bills submitted for treatment outside the country. Travel insurance promises to take care of those expenses. Assuming you get the right level of coverage. So check the fine print if you decided to purchase travel insurance for medical coverage.
And unlike car insurance where you pay a nominal fee for high repair costs, should you need to be airlifted back to your home country, that’s on you too. Sure, you can submit a claim. That’s assuming you aren’t already dead because you couldn’t afford the medical treatment upfront. But don’t worry; death is covered in a travel insurance plan.
Is Travel Insurance Worth the Expense?
So, is travel insurance worth the money?
That depends on a few things. The first is your mindset. Insurance is basically paying for peace of mind. It’s the knowledge that unexpected expenses will be covered should they arise. Since you’ll have to pay out of pocket anyway for treatment, at least you’ll get your money back.
On the other hand, your mindset might be “if I have to pay for it upfront anyway, why put out more money on a travel insurance plan that I may never use? And if I did use it, I’d still need the money upfront for the medical bill anyway”.
Remember too, that travel insurance plans also cover canceled trips. In the case of a cruise, you’ve already put out of the money because final payment is needed up to 2 months prior to sailing. In the case of Hurricane Dorian, many ships already at sea had to stay there some days after they were scheduled to return to port. That means all the passengers who were supposed to board the ship never did.
Again, travel insurance promises to cover the cost. But you have to look at things in totality.
In the case of Hurricane Dorian, most cruise lines either gave full refunds, issued a credit for a future sailing, provided transfer credits (because a lot of people missed flights being out at sea) and other credits to compensate travelers.
Now, technically, if this happened to you and you had travel insurance, you could submit a claim against your plan. Your trip was canceled and the terms of the policy say that trip cancelation is a covered event.
But remember, you would have to submit a claim to get your money back. Which means that there is a possibility that your claim will be denied. The trip insurance company might decide to deny the claim if the cruise line issues a credit for a future cruise. In which case, you just made a donation to the travel insurance company.
What’s Our Verdict?
After considering everything, what do I recommend regarding travel insurance?
It depends on your level of comfort. If having peace of mind “just in case” is important to you, then, by all means, get it. Travel insurance is not a scam. You just need to be aware of the terms when you sign up.
Additionally, when you look at quotes for travel insurance, it’s relatively inexpensive. So obtaining a policy won’t cost much. And you still get the comfort that any expenses you do pay out of pocket will be covered.
In the interest of full disclosure, I’ve gone on a number of cruises on Norwegian Cruise Line (NCL), Royal Caribbean Cruise Line, Celebrity Cruise Line, and an upcoming cruise on Carnival Cruise Line. I have never used travel insurance and have had great vacations. I did check into it for my upcoming Carnival cruise because of the chaos Hurricane Dorian caused. After contacting travel insurance companies and asking questions I thought you might want answers to, I decided to forgo purchasing a policy.
What do you think? Do you purchase travel insurance when cruising? If so, what are your reasons? If you don’t, why not? Share your thoughts in the comments below.