Should You Insure Your Cruise?

June CasagrandeNovember 27, 2018
On a similar note...
On a similar note...

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Ask anyone if you should buy travel insurance for a cruise and they’ll answer before you’ve finished your sentence: Yes. Absolutely. After all, what if something goes wrong?

Easy for them to say. They’re not the ones who’ll have to pay the premiums.

The medical plan that covers you at home may not cover you in certain destinations, such as Cuba, for instance. Check with your insurer to learn what medical coverage you’ll have onboard and in every port. If you’re not covered for every step of your journey, you need a travel insurance policy that covers catastrophic medical expenses, including emergency helicopter transportation.

How do I decide if I need cruise insurance?

But if your health plan has your back when you travel, the question of whether to purchase cruise travel insurance comes down to weighing how much of your travel costs you stand to lose versus how much you have to pay to insure them.

Imagine you’ve shelled out $1,500 for a nonrefundable cruise and cruise travel insurance will pay that full amount if you cancel for a covered reason. Sounds great, but an absurd hypothetical illustrates a problem: If the insurance itself costs $1,500, it would be a terrible deal because it’s guaranteed you’ll be out the $1,500 whether or not you have to cancel your trip. If it cost $750, it would be a good purchase only if your odds of canceling were better than one in two. If it cost $500, it would be a good buy only if your odds of canceling were greater than one in three.

Insurance is typically nowhere near that expensive, and you can’t know how much your trip will cost to insure till you get a quote. But it’s certain the insurance company knows the odds you’ll cancel better than you do, and they add a profit margin on top of their own financial risk. So the cards are already stacked against you.

Yet it still makes sense to purchase trip-cancellation-only insurance if you’re prepared to absorb the loss. If you’re not, that could be a clue that you’re spending beyond your means for travel.

What should I consider when purchasing cruise travel insurance?

  • Think about missed connections. Travel insurance is best known for covering cancellations due to illness or emergency. But sometimes it’s your airline’s fault you missed your cruise. Policies vary, but many compensate you if you miss your ship’s departure because your flight was canceled or delayed. Often, this means you’ll be reimbursed for the cost of flying to a port where you can catch up with your ship, and sometimes it will cover a hotel in the interim.

  • Consider the risk of lost, misdirected or stolen luggage. If you’re in Miami and the airline sent your clothes to Mumbai, many policies will reimburse costs. If your luggage is lost or stolen, even the jewelry, electronics and other valuables inside could be covered.

  • Remember elderly or sick family members. Your own health isn’t the only risk variable when you book a nonrefundable cruise. If a family member falls ill, you may need to cancel to be by their side. Family emergencies are covered by many cruise insurance policies.

  • Comparison shopping pays off. You can either go directly to a cruise travel insurance provider like AIG, or you can use a one-stop comparison site like Travel Insurance. Be sure to compare at least a few options before you buy.

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