Cruise Line Insurance is a Poor Buy

A recent British survey of cruise passengers has revealed that one-third of respondents said they never took extra money with them when going on a cruise holiday, the majority thinking they wouldn’t need it. And among the 43 per cent who said they took extra cash on board, most took only 100 to 150 pounds.

Obviously these folks were in for a rude shock once they set sail and realized that except for meals—and not even all meals—everything else on a cruise costs as much, or more, than it does at comparable locations ashore. The days of 25-cent, duty-free beer are long gone.

Though cruise companies sell their trips by touting just the basic fees—as airlines do when quoting baseline airfares—the cost of cruising is no small matter. Many experienced cruisers confirm that they spend at least as much on taxes, port charges, tips (virtually mandatory), and shipboard goods and services—drinks, pizzas, ice creams, souvenirs, gifts, jewellery, clothing, and more drinks—as they do on paying their tariffs.

Another miscalculation many make is buying an insurance supplement from the cruise line thinking it is more convenient and cheaper than buying a standalone travel insurance plan from an independent vendor. By comparison, the in-house cruise insurance sold to North American customers is a poor buy, with far lower limits than standalone travel medical insurance. By contrast, European passengers are often required by their booking agents to buy supplemental medical insurance with limits in the millions of pounds or euros. They know that getting stuck in a foreign hospital, especially one in the US or Canada, can be horrendously expensive.

A $10,000 medical emergency care limit, which is common of the plans sold by cruise lines, is hardly enough to cover more than one day in a Miami or Houston or New York hospital for someone evacuated from a Caribbean cruise. And once evacuated to Miami or Houston or New York, the patient must then find their way home at their own expense. In addition, the patient will have to pay the bill up front and then file for reimbursement from the cruise line.

Standalone travel insurance plans, particularly those issued in Canada and the UK, cover medical expenses into the millions of dollars or pounds (up to $5 million for Canadians and $10 million pounds in the UK). High-limit medical coverage plans are available from American insurers too, but they are distinct from the more routine trip cancellation and delay plans that comprise the bulk of travel insurance sales in the US. They are worth seeking out and buying, though, as they too can cover up to $500,000 of medical costs, and occasionally up to $1 million.

Most cruise lines in North America sell their plans mostly for the trip cancellation delay and missed airline connection benefits, but you have to read the fine print very carefully to understand what the cruise line really covers and what it leaves to the airlines and tour packagers to cover. I know of many cruise passengers who have been caught in the middle, with no one accepting responsibility for a failed trip. And if you are going to get any negotiable benefit back from a cruise line for a failed connection, delay, or rerouting, it will likely be in the form of a credit for some future cruise—rarely a cash refund.

The bottom line: Standalone travel insurance with a high medical limit is cheaper and offers a lot more protection than in-house cruise line coverage. Sharpen your pencil and compare. Just remember, cruise lines are in the business of making money from cruise passengers—not covering their insurance needs.

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