Cruise Fanatic, your explanation is very clear and well stated.
One other point is that the cruise lines' rules state that your money is non-refundable as of final payment date. Even if you don't make your final payment, whatever money you *have* paid (deposit, for example) becomes non-refundable as of final payment date. End of story. Those are the rules.
If passengers have purchased insurance, that's between the passengers and the insurance company. It has nothing to do with the cruise line, and in fact, unless you buy insurance through the cruise line, they don't even know if you have insurance or not. If you're past final payment date, you take it up with the insurance company.
If you do buy insurance through a cruise line, it's not even the cruise line that actually sells you the insurance. They sell a policy from an the insurance company with whom they work, such as BerkleyCare. Cruise lines are not in the insurance business.
Cruise Fanatic is quite right that making an exception for one person is no different than not having their rules at all. A lot of cancellations are due to unfortunate circumstances. That's not the cruise line's fault or responsibility, and as much as they would like to help out someone who did not follow the rules, it's just not up to them. They can't. And all the passengers who DID spend money on insurance would feel the same way.
It's not personal, it's business.