Question

[BevB]

I have booked a cruise (not sailing until Dec 2011) - have paid the deposit for two and paid insurance (Travelex Select) for two. May have to cancel

the cruise -- but will do it atleast 90 days prior to sailing and before final payment is made. According to RCCL's FAQ's, I will get a full refund. My question -- what about the insurance -- will I get any of my premium payment back as technically the insurance term hasn't even kicked in?

I believe the insurance wouldn't kick in until final payment must be made....am I way off base here or should there be a return premium on this? Thanks in advance for any help or advice.

[klfrodo]

No, you will not be refunded your insurance.

 

Technically, ever since you put down a deposit and purchased the insurance, the insurance company has been at risk.

During all this time, there are a myriad of things that could have happened to you where your travel insurance would have kicked in to make you whole on any financial loses.

Even though you haven't made any claims, they have been there ready to cover you.

 

Most of us purchase the insurance when you did. Mostly to ensure we are protected against known pre-existing conditions, or we already have non-refundable deposits laid out.

[CruisinGerman]

I disagree with the above poster. The only real risk the insurance company is exposed to before final payment date is having to make good on your deposit should the cruise line go bankrupt or otherwise cease operations -- and the insurance companies already have this issue studied quite thoroughly so they know in advance which companies to include, and to exclude, with regard to bankruptcy protection. The other potential, hypothetical risk, is that you were healthy when you bought the insurance, but have since developed some medical condition which can no longer be deemed pre-existing.

 

While you will probably not receive a refund of your insurance, in practice, most of the large insurance companies will let you transfer your purchased insurance to a different cruise if you cancel this one without penalty. So if when cancelling the December 2011 cruise you have a future date and sailing in mind, you can probably ask the insurance company to transfer the insurance over to that new booking.

 

The reason behind allowing you to do this is that, technically speaking from the insurance underwriting perspective, you are not insuring a specific cruise, but rather a series of risks which can be suffered by an insured person and which are proscribed within a range of dates you are paying for. So if it is before final payment and there has been no claim, in most cases the large insurance companies will let you transfer the insurance to a different, future, cruise.

 

Hope this helps.

 

Kind regards,

 

Gunther and Uta

[6rugrats]

I don't have any idea what your policy says, but agree with the poster who stated the insurance company has been at risk since the day you purchased the policy, and I don't believe you would receive your premium back if you cancelled.

 

However, I also agree with the second poster who said to transfer your policy to a different cruise, if this is possible. I have a policy with Travelguard that I've now transferred to three different cruises (first two were chartered!). That is often a solution.

[cruiseco]

I disagree with the above poster. The only real risk the insurance company is exposed to before final payment date is having to make good on your deposit should the cruise line go bankrupt or otherwise cease operations -- and the insurance companies already have this issue studied quite thoroughly so they know in advance which companies to include, and to exclude, with regard to bankruptcy protection.

 

Travelex does indeed maintain a list of companies they WON'T cover for financial default which is valid at the time of the policy purchase. They do not maintain a list of companies they WILL cover for financial default. But you're assuming they have a crystal ball. Say someone books a cruise two years in advance with no cancellation penalty until 90 days prior to sailing. At the time of purchase the cruise line is not on the "black list" so the financial default coverage is in effect. Over the next year, for whatever reason (bad management, several ships sank, etc), the company goes bankrupt -- something completely unforeseeable a year or so previous when the policy was purchased. So the cruiser loses the deposit money, not because of published penalties but because of the default.

 

Because they can't peer into the future to figure out some travel supplier's financial health a year or two in advance, Travelex accepts that this kind of thing can (and does) happen and if it does they acknowledge that they have a responsibility under the plan wording to pay the claim amount. They have accepted the risk and by doing so have earned their premium.

 

The client can always choose to avoid this situation simply by waiting to buy the policy until he/she actually has some money at risk through cancellation penalties. But you can't expose the insurer to a risk of loss (no matter how small or unlikely) and not pay the insurer to shoulder that risk.

 

Also, keep in mind that these Travelex policies cover any kind of travel -- not just cruises. There are hundreds of thousands of travel suppliers out there, most of them private companies and very few which will let an outside third-party like Travelex go rummaging through their financials. Do you deny financial default coverage for these suppliers (like Access America)? Or do you try to provide coverage even when you have absolutely no idea of the financial health of these companies. Travelex chooses the latter.