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 All About Travel Insurance

Tom Ogg
Why I wrote this article

I wrote this article because I have received so many e-mails and reviews from CruiseReviews.com readers that have lost money because they did not have travel insurance, or they had the wrong policy. One family posted on Cruise-Chat.com that they were insured by Access America who refused to pay on a valid claim for one reason or another. Another couple from Spain was sold a cruise line’s insurance, but when the honeymoon couple arrived in Miami to check in for the cruise, the wife’s passport was in her maiden name and the cruise reservation was in her married name. The cruise line refused boarding and treated them as a “no-show” and refused to pay on the insurance that had been sold the couple. The stories go on and on. Medical emergencies and evacuations not covered by insurance, passengers being injured in accidents on third party vendors in foreign countries that were not covered and financial failures of cruise lines that had sold insurance to passengers who not only lost the money for their cruise, but also lost the money they paid for an insurance policy that failed with the cruise line.

I decided to do some research and try to find the best deal out there and at the best price. 

First, do I really need travel insurance?

Everyone has his or her own tolerance for risk. If you travel all the time and are not taking high-risk trips, have adequate medical insurance and are well insured for other types of losses, then you may not find travel insurance worth it. On the other hand, if you are taking high-risk trips, do not have adequate medical insurance to cover international situations and are not covered for many of the things associated with traveling, then you may want to consider buying trip insurance. Here are some signals that you will want to purchase insurance.

High-Risk Travel: If you are leaving the country, you will probably want to purchase insurance to protect yourself from potential losses if something should happen.

If you have any medical problems that could flare up while traveling, you definitely should purchase travel insurance to cover medical expenses, medical evacuation costs and trip interruption losses. If you are at risk of having a potential heart attack, stroke or any other medical condition, you need travel insurance. "At risk" also includes folks that are over weight, have high blood pressure, are out of shape and are generally more likely to experience medical discomfort than someone without these conditions.

If there is any potential that you might have to cancel or change your travel plans, you should purchase travel insurance to cover the cost of the trip should you cancel

If there is any possibility that the airline, cruise line, hotel or resort could go bankrupt (either by their own cause, or because of  world events) between the time you book the trip and your departure date, you should purchase travel insurance to cover financial failure

If you are planning on tight airline connections to get to an international destination to board a ship, you should purchase travel insurance to cover lost luggage and personal effects as well as missed connections.

If you are participating in any high-risk activity during your trip such as SCUBA diving, surfing, skiing, mountain climbing, bike riding, hiking, water skiing, parasailing, horseback riding, off road exploring or any other risky activity, you should purchase travel insurance just to be safe should something happen during the activity.

If you intend to “do your own thing” for shore excursions on an international cruise, you should purchase travel insurance to cover the likelihood that you could miss the departure of the ship in a port of call.

Should I purchase the tour company or cruise line’s insurance or purchase it from a third party?

Hemphill Harris Tours stranded hundreds of people all over the world that paid for travel insurance Hemphill Harris sold them. Premier Cruise Line, Renaissance Cruises, American Hawaii Cruise Lines, United States Cruises, Commodore and so on all sold their own travel insurance. The insurance they sell is only as good as the underlying company that offers it and time has proven it is very difficult to understand the true nature of a company’s financial situation. One of the interesting things regarding companies offering self-insurance is that during the last 12 months while prices for cruises and tours have fallen to create demand, the cost of the insurance has remained constant making it much more expensive than third party policies that are based on the cost of the travel event.

Here is one fellow's experience from Cruise-Chat.com about buying insurance directly from Princess Cruises.

" Here is something we've found out the hard way:
If you are booking a cruise on Princess to include your kids in a their own staterooms, as we did for our son, 43yo, and another cabin for our daughter, 45yo, all together three cabins, and you pay the total bill, be aware that if one of them cancels, as our son did, HE gets the insurance credit of 75% for HIS NEXT cruise within ONE year limit. The beef there, is that I paid for his stateroom and I should get the credit. It took me two and a 1/2 years to convince Princess that I am the one with a checkbook and finally, it took a Notary Public's certified letter to change and send ME the credit.

Wait, there is more!

Just before the Iraq war, my wife and I booked another cruise (Transoceanic from London to NYC) this October on Grand Princess. Princess then changes the itinerary and the date to Golden Princess. We did not like the itinerary and the new date and our TA cancelled this cruise and booked both of us on Sun Princess (Eastern Carib/10days) also this Oct 22. Now, we find out that since we cancelled the one from England to NYC, Princess will deduct $600.00 from our sons' $1740.- insurance credit. Princess reasoning,- one is allowed to apply the cancellation insurance rebate only to the NEXT cruise, without any new cancellations!

Mind you, the Princess changed the itinerary, the vessel and the date! Oh well, one last cruise on Princess this October (to obviously use up the Insurance refund)
and hopefully many other cruises will be with Celebrity or Royal Caribbean! "

Several insurance companies specialize in travel insurance and are able to spread the risk over a much broader base than an individual tour company or cruise line that attracts a specific demographic that may influence the nature of the insurance product’s claims and settlement process.  After all, that is what it boils down to, just how good is the insurance once a claim is made? It is difficult to believe that a tour company or cruise line will perform when their primary business is providing vacations, not insurance. Third party insurance is without a question the way to go.

OK, what should I look for in an insurance company?

First, the insurance industry is heavily regulated so all of them are required to remain financially viable. This is a major benefit in itself. There seems to be three things of importance one needs to look at when shopping for insurance. I am going to try and put them in their order of importance.

1. Settlement of Claims:

This should be your primary concern. What good is cheap insurance if the insurance company is not going to make good on your claims. As in the case of the couple on Cruise-Chat.com (look under the NCL forum, “NCL Dream becomes a nightmare” thread) what good was the policy they purchased from Access America? This kind of nonsense should be your first warning about an insurance company.

If the insurance company has a good history of settling valid claims then it makes sense to pursue a quote from them.

2.  Insurance Inclusions:

Once again, what good is a policy if it doesn’t cover the specific losses that is the reason for your claim? Here are some of the most important things to look for. I have listed them in their order of importance from my perspective.

Medical Evacuation: I was once on the QE2 Eastbound when a gentleman had a heart attack a couple of days out from Boston. He was not covered by insurance, but the ship’s doctor had no recourse but to call for an emergency evacuation in order to limit the cruise line’s liability in a wrongful death lawsuit. If the gentleman died and they had not made every effort to save him, virtually every attorney would hold the cruise line responsible for the client's death. His wife pleaded for the doctor to just let him stay in the infirmary, but the doctor had no choice. The seas were running about 40 feet and the QE2 changed its course to head to within helicopter range of Newfoundland. After three hours or so in heavy seas, a helicopter arrived to pick the guy off the top deck of the ship. Because of the movement of the ship in the heavy seas, the helicopter was unable to pick the fellow up and called for a single winged aircraft to act as a spotter plane so that the helicopter could get into the proper position. It took almost an hour after the second aircraft arrived, but they successfully rescued the gentleman from the deck of the ship. It was estimated that the cost of the rescue was in the range of $40,000. Of course the gentleman and his wife were responsible for the expense, not to mention the rest of the medical expenses once he was delivered to the hospital in Newfoundland.

If you are at any risk whatsoever, you should make sure that you are covered by medical evacuation insurance to resolve such a tragedy. If you are traveling internationally, I would strongly suggest medical evacuation insurance in the amount of $50,000. To travel without this is absolutely foolish. I have seen medical evacuations on virtually every cruise I have taken (and that’s a lot.)

Trip Cancellation: My favorite story about trip cancellation is when Tom and Mary Milano read a review I wrote on the Sea Princess where a fellow was held in the ship’s infirmary for two days until arriving in Puerto Vallarta and was then put off the ship pending a doctor’s statement of health. He missed the ship and was subsequently evacuated to San Diego for treatment for a mild heart attack. Fortunately, he had travel insurance and was fully covered for trip interruption, medical and medical evacuation. I wrote of the importance of insurance and how everyone should buy it if they have any risk whatsoever. Tom read the article and then called his travel agent to purchase travel insurance for his next cruise that he had just booked. Lo and behold, Tom suffered an injury shortly before the cruise and was able to recapture his investment in the cruise from his insurance company.

You should be entirely covered for cancellation of your trip.

Bankruptcy Protection:  In this day and age, you should be covered should the vendor (s) providing transportation or services for your trip go bankrupt or otherwise fail to perform. As sad as it is, this is a very real scenario in today’s world and one does not have to go very far to find examples of folks that have lost tens of thousands of dollars when their tour company or cruise line went belly up.

Emergency Medical Expense: Ok, say something does happen and your medical evacuation is covered, how about the hospital costs once you get to the hospital? 

Trip Delay and/or Missed Connection: On almost every group I escort, someone is either delayed in his or her departure, or misconnects on his or her way to the ship. Having the additional cost covered to correct the situation adds options that can resolve the problem quickly.

Assistance and Support: If you do have a problem, what kind of support and assistance does the insurance company offer? Will they actually help you by lending a personalized service to resolve your problems? This is a HUGE benefit when traveling internationally.

Lost, stolen or delayed Luggage:  The inconvenience of having your luggage lost by the airlines is irritating, but the carrier’s liability in these instances is not enough to recover your actual loss. Look for additional coverage in case your baggage is lost or stolen. Also, if you luggage is delayed arriving at your destination, what kind of relief is there for you to acquire items necessary to survive?

Other Miscellaneous Benefits:  Most policies have death and dismemberment benefits, dental benefits and other benefits that may be important to you, however the above list represents the bulk of necessary inclusions you should look for.

3.  Price

Once you have established that an insurance company’s settlement history is excellent and that they offer the inclusions and benefits that meet your requirements, then price becomes the next consideration. Do not be lured into a policy because its price is less than other policies. Also, many travel agents enter into relationships with insurance companies and they only offer that company’s policies. You have every right to demand the particular company’s policy that meets your criteria.

OK, what insurance company do you suggest that meets all of the above criteria?

When I first decided to write this article, I was going to investigate each travel insurance company and prepare a detailed comparison chart showing the differences. It got so confusing that I simply decided to try and find the best choice using the above criteria. I actually found two that were excellent.

However, one had a price advantage for the same policy and everything else being equal, here is the company.

Travel Insured International:

This company has an excellent reputation within the travel industry and also offers rich inclusions. When I priced out a number of different policies, they seemed to be the most competitive. You can use the link that appears below to get a quote from them on your next trip. Note that it does not even require a name to prepare a quote for you. You can feel comfortable that "no one will call." Give it a try. 

Runner up;

Travel Guard:

Travel Guard has an excellent claims history and also rich inclusions, however their policies seem to be more expensive.

I sincerely hope this helps you find the best policy for your needs.

Tom Ogg

March 28th, 2004
I just returned from the Mariner of the Seas and had another medical emergency. This one was interesting because the gentleman was traveling as a solo and thought he had insurance, but wasn't sure what kind or who he was insured with. To cut to the chase, he was involved in a medical evacuation from the ship in Ocho Rios, Jamaica to the hospital in Montego Bay some 2 hours away. The gentleman had severe internal bleeding and time was of the essence. The ambulance demanded payment in full before they would transport him. Luckily, he had enough credit on his American Express card to pay for the transportation and also his treatment in Montego Bay. It was a very frightening experience as if the gentleman had fallen to sleep in his cabin he would have more than likely bled to death. It turned out OK, as he received a transfusion in Montego Bay and then jumped on a flight back to Ft. Lauderdale where he checked himself into a hospital where his medical insurance kicked in. This is what I would suggest that everyone carry with them at all times on a vacation outside of the United States.

A laminated color copy of the front page of your passport
A laminated copy of your U.S. driver's license (could be on the back side of your passport
A credit card with at least $10,000 available credit
Enough cash to resolve potential issues
Complete contact information (including emergency contact information)
Travel Insurance policy number and contact number for claims
Any special medical instructions that would be mandatory in an emergency medical situation

 

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