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Cruise Insurance: Everything You Need to Know

SmarterTravel

Planning for a cruise involves a combination of imagination and forethought. You can picture yourself basking on the deck next to the pool, but you also have to make real decisions about your itinerary, your accommodations, and how to handle unforeseen problems during your trip. But planning for the unexpected, be it lost luggage or a twisted ankle, can be as simple as purchasing cruise insurance.

Cruise travel insurance can provide vital protection for risks that can run into thousands of dollars. But it remains something of a mystery to some travelers. A typical reader’s question goes something like this: “Do I need cruise insurance? What does it cover? Should I buy from an independent broker or via the cruise line?” Those are all good questions, and the answers depend on your specific circumstances. Below is an overview of cruise insurance basics.

What Cruise Insurance Covers

Cruise insurance typically covers three basic risks:

  • Loss of nonrefundable advance payments and deposits in the event that unforeseen circumstances require that you cancel a cruise. Typically, you must prepay a cruise in full, often many months in advance of sailing. Cruise lines impose refund limitations that escalate the closer you are to sailing date, often ending with 100 percent nonrefundability. The trip cancellation insurance (TCI) element of cruise insurance repays you for any amounts you can’t recover from the cruise line, provided you cancel for a “covered” reason. Some cruise lines, including Carnival and Royal Caribbean, include a “cancel for any reason” clause that offers future cruise credit if you need to cancel your trip for a non-covered reason.
  • Extra costs of traveling home before your scheduled return in the event you suffer an accident or illness during a cruise, or a close family member at home suffers an accident or illness. Unexpectedly cutting short your cruise to fly home—perhaps from a distant port—usually entails a severe airfare penalty. The trip interruption insurance (TII) component of cruise insurance compensates you for whatever extra airfare expenses and fees you need to pay to get home early.
  • The costs of emergency medical treatment or emergency evacuation in the event you suffer an illness or accident too severe to be treated by the cruise ship’s medical facilities. Your regular health insurance likely does not cover doctor visits and hospital stays outside the U.S., or emergency evacuation to a shore hospital or a U.S. medical facility for treatment—both of which could rack up astronomical costs. The medical and evacuation (medevac) component of cruise insurance pays any such costs you can’t recover from your regular health insurance.

Each of these three possibilities entails a substantial financial risk—up to tens of thousands of dollars—that most travelers probably can’t afford. That’s why you need basic cruise insurance that covers all three contingencies.

Most comprehensive cruise travel insurance policies also cover a handful of other potential problems, such as lost baggage and delayed flights.

Almost all policies allow you to cancel or return early in the event of sickness or an accident affecting you, a traveling companion, or a close family member remaining at home. This almost always includes spouses, parents, and children; some policies also allow include aunts, uncles, nieces, nephews, and other extended family members. (Read your policy carefully before booking.)

Some cruise insurance policies include an option that allows you to cancel for any reason, including business reasons (not covered by any others) or even if you just don’t feel like getting out of bed. However, these policies tend to be more expensive.

Where to Buy Cruise Insurance

You can buy cruise insurance directly from the cruise line, through a travel agency/booking site, or from a third-party broker.

It might seem convenient to simply purchase your cruise line’s insurance policy and be done with it, but you’ll want to read the fine print carefully to make sure the coverage meets your needs. According to Cruise Critic, SmarterTravel’s sister site, “Cruise-line insurance usually offers secondary coverage … and is more limited than similarly priced coverage you can buy on your own. (For example, cruise-line coverage generally doesn’t cover its own financial default.) Third-party travel insurance companies offer more inclusive policies that provide more protection, and these are often the best bet.”

In addition to checking whether your coverage is primary or secondary—a primary policy kicks in immediately, while secondary coverage might require you to attempt to get your costs reimbursed through other private insurance first—you’ll also want to check whether your coverage excludes claims associated with pre-existing medical conditions. Many cruise insurance policies bought via a third-party broker will waive these exclusions as long as you purchase the insurance within a week or so of the time you make your initial deposits and payments.

While you might end up purchasing cruise line insurance in the end, you’ll often find the best travel insurance for cruises by doing a little shopping around. Try one of the online agencies that compare policies from different suppliers, such as InsureMyTrip, QuoteWright, SquareMouth, and TravelInsurance.com. All of them provide user-friendly entry forms for your trip particulars, then display policies and costs that meet your needs. Insurance companies underwrite the actual policies.

If you cruise frequently, you might want to consider annual travel insurance, which offers coverage for numerous trips over a year-long period for a set premium. Annual insurance often pays for itself within two to three trips.

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Editor’s note: This story was originally published in 2008. It has been updated to reflect the most current information. Christine Sarkis and Sarah Schlichter contributed to this story.

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