Should You Have Cruise Insurance?

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According to a study conducted by the Cruise Line International Association, 28.5 million passengers set sail on a cruise in 2018. While numbers won’t be as high in 2020 due to the pandemic, many travelers are eager to start planning their next trips out on the water.

Among the many considerations in booking a cruise is whether to buy cruise insurance. Here’s what you should know.

What is Cruise Insurance?

Cruise insurance policies protect you and your traveling companions from problems such as medical emergencies, trip cancellations, accidents and other events that cause financial loss related to the trip.

Here are some problems that are typically covered by cruise insurance:

Bad weather conditions, such as storms and blizzards, that cause travel cancellations or delays
Equipment failure that causes a cancellation or delay to your travel
A sickness or injury covered by the policy that prevents you from traveling
A strike resulting in a trip interruption
A hijacking, quarantine, subpoena or being required to serve jury duty

You can purchase cruise insurance directly from the cruise line or through a third-party travel insurance provider. Although policy details vary by plan type and insurer, carrier cruise insurance may only protect your cruise investment, while a third-party cruise insurance policy can offer more robust benefits for the entire trip. Cruise insurance benefits can include:

Trip cancellation coverage: Reimburses you for nonrefundable payments, up to the cost of the trip, if you have to cancel your trip for a problem covered by the policy.
Travel delay coverage: Reimburses you for the cost of meals, accommodations and other miscellaneous expenses if your trip is delayed for a problem covered by the policy.
Trip interruption coverage: Reimburses you for nonrefundable payments, up to the percentage listed in the policy, in the event you have to cut your trip short for a problem covered by the policy. A travel delay benefit may also include coverage for extra expenses incurred due to an interrupted trip.
Lost or damaged baggage coverage: If your bags are lost, stolen or damaged, baggage coverage will reimburse you for the actual cost of the bags, the value of the bags, or the cost for repair or replacement, whichever is less. For example, the Carnival Vacation Protection Insurance plan offers up to $1,500 in coverage if your belongings are lost, stolen or damaged.
Cruise disablement coverage: If your ship doesn’t make it to port or the ship stalls, some policies offer this benefit to make up for your invoicnence.
Emergency medical and dental benefits: Reimburses you for medical expenses due to an injury or sickness while vacationing.
Emergency transportation benefits: If local medical facilities are unable to provide the appropriate medical treatment, this benefit will reimburse you for medical transportation costs up to the policy limit.

Cruise Lines Offer Limited Coverage

While most cruise lines offer cruise protection plans, cruise lines might not be the best place to buy a policy. A travel insurance policy from a third-party company can offer you better coverage. Here’s why:

Limited emergency medical and dental coverage. Generally, cruise line protection plans only offer cancellation waivers and some post-departure benefits, like emergency medical and dental coverage. However, these benefits tend to be modest in coverage. Selecting a plan with adequate medical benefits is especially important considering that the cost of emergency transportation can cost between $50,000 and $100,000, according to the Centers for Disease Control and Prevention.

For example, Carnival Travel Protection offers emergency medical and sickness benefits up to $10,000 and emergency evacuation benefits up to $30,000. But buying a plan from a third-party insurer such as the April Cruise Plan offers an emergency medical and dental benefit of up to $100,000 and an emergency evacuation benefit of $250,000.

“The cost of an emergency evacuation varies based on where you are and where they need to take you,” says Carol Mueller, vice president at Berkshire Hathaway Travel Protection. “Travelers can understand that the coordination for evacuating someone off a cruise ship that is out to sea is immense, and the corresponding costs to do so can be astronomical. You must protect yourself from the risk of incurring those emergency medical expenses.”

Cruise lines offer limited trip delay coverage. If you miss the cruise departure due to a flight delay, it can be costly to meet the cruise at the next port of call. Therefore, it’s important to ensure your plan has a robust trip delay benefit and missed connection coverage. For example, Berkshire Hathaway Travel Protection’s WaveCare offers up to $1,000 for trip delay and up to $500 of missed connection coverage, while Celebrity Cruise Insurance offers a $500 trip delay benefit but doesn’t offer missed connection coverage.

What’s Not Covered by Cruise Insurance?

There are many types of events that are not usually not covered by cruise insurance:

Foreseeable events. Cruise insurance policies generally do not cover your financial losses that arise from a reasonably foreseeable event. A foreseeable event is a situation that may have been known or was expected before it happened. Essentially, if you’re purchasing a policy with the intent of canceling or you are worried about a certain situation, it’s likely a foreseeable event.

For example, the coronavirus outbreak was considered a foreseeable event on Jan. 22, 2020, by Allianz Travel. While many travel insurance providers decided to extend trip cancellation coverage after January in a goodwill effort, foreseeable events can nix your coverage.

Or, as another example, if the National Weather Service issues a hurricane warning, the storm is a foreseeable event and can affect your coverage if it affects your travel plans.

Some plans offer cancel for any reason coverage. For example, the April Cruise Plan offers a “cancel for any reason” upgrade that will reimburse you up to 75% of trip costs as long as you meet the policy’s requirements.

Certain unforeseen events. Although many cruise insurance plans won’t cover foreseeable events, some policies may not cover all unforeseen events either. In fact, most cruise insurance policies have a lengthy list of unforeseeable events that are specifically excluded from coverage, such as:

Epidemics and pandemics
War (declared or undeclared)
Civil disorder or unrest
Terrorist attacks
Nuclear reaction, radiation or radioactive contamination
Travel bulletins or alerts
Government prohibition or regulation
Participation in certain dangerous activities, such as mountain climbing or skydiving
Participation in professional, amateur, scholastic or intramural sporting events
Normal pregnancy or childbirth, or elective abortion or fertility treatment of you or your traveling companion
Mental, nervous or psychological disorders
Being under the influence of drugs or intoxicants (unless prescribed by a physician)
Intentionally self-inflicted injury, suicide or attempted suicide

It’s important to note that some policies may only provide a cruise line credit for trip cancellation or interruption due to a problem covered by the policy. For example, the Carnival Vacation Protection Insurance provides a 75% cruise credit if the cancellation reason doesn’t qualify for a cash refund. These credits may be worth a lot less than the cost of your trip, depending on the policy.

Supplier default. Another exclusion in some cruise insurance plans is supplier default. In the event your cruise line supply goes out of business, some plans offer financial protection to recoup the losses from your cruise investment. But many policies purchased directly from cruise lines may not offer this coverage.

Do I Need Cruise Insurance?

A lot can go wrong when cruising, so it’s worth considering cruise insurance. From making medical emergencies more manageable to helping you meet up with your ship if you miss a connection, cruise insurance could be a smart purchase.

“Particularly, when it comes to cruise, you want to make sure you have some sort of cruise insurance policy in place since these trips require a huge investment,” says Mueller. “Additionally, cruise lines have long-tail cancellation exposure, so a lot can happen between the time you book your trip and the time you depart.”

When deciding which policy to choose, compare all of the options so you can find the best fit for your coverage needs and budget. Additionally, check your credit card perks for the card you’re paying with to see if you have any built-in travel coverage. You don’t want to pay for coverage you already have. Check out these best credit cards for cruises.