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Travel Insurance for the Default Benefit?


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I hate to bring this up, as I hope its just being overly cautious, but i posted about this in our Roll Call for our May 2021 British Isles Cruise.  This trip is a major financial investment for us, and while final payment isn’t due until January 2021, we have started to book airfare and excursions.  It got me thinking, we buy travel insurance for all our cruises no matter what, but a good majority of people do not.  Is it time to start thinking about booking travel insurance for the Default protection benefit?  With uncertain times ahead, I think it may be the most prudent thing to do.  Interested to hear your thoughts on this.  We have been looking forward to this cruise for a year, and I certainly hope it still goes as planned!

 

Hope you all are safe and healthy.  

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Could you please explain what the Default Protection plan  is?    I'm interested in what others have to say but I have not heard of that term/plan before.

Thanks

Joe

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1 hour ago, waltd said:

Could you please explain what the Default Protection plan  is?    I'm interested in what others have to say but I have not heard of that term/plan before.

Thanks

Joe


basically means if they go bankrupt and close up shop. If that happens there is almost 0 chance guests will get any of their money paid back. 
 

24 minutes ago, Coral said:

There is a travel insurance forum:

 

https://boards.cruisecritic.com/forum/499-cruisetravel-insurance/

 

There are some smart people on that forum.

 

True. But I also asked here since we had a Princess cruise booked for next year and was curious what people thought about the financial stability of Princess in particular. 

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17 minutes ago, Steelers0854 said:

 

True. But I also asked here since we had a Princess cruise booked for next year and was curious what people thought about the financial stability of Princess in particular. 

It would probably be better to look at the whole Carnival Corp picture.

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7 hours ago, waltd said:

Could you please explain what the Default Protection plan  is?    I'm interested in what others have to say but I have not heard of that term/plan before.

Thanks

Joe

Steelers
who sells this type of policy in Ontario, Canada that would cover Princess bookings?

Edited by dog
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Have you checked with your credit card company to see if they would cover a bankruptcy?  Most credit card companies will get you a refund if the goods and services you purchased are not delivered.  In a bankruptcy; clearly you did not receive the goods and services you paid for. 

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Indeed, there are some more detailed answers on the insurance board. I’ll just point out a couple of things.
 

First, the default clause covers third-party default meaning you must have bought your cruise through a travel agent, not booking directly with the cruise line. There may be exceptions, but I am not aware of them.

 

Second, the cruise line must cease operations entirely, not just suspend them for reorganization. Bankruptcy doesn’t count if the cruise line keeps operating. 

Some insurance policies have a list of approved suppliers. Others are not covered.

 

This is a kind of insurance that people didn’t give much thought until now. If you are concerned about it, find that section in the Certificate of Coverage and read it carefully. Be sure you understand the terms. Seek professional advice if necessary.

 

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travel Agencies in Ontario Canada cover you incase of bankruptcies if they are members of TICI. Mentioned this to Steelers several more nths ago. New times, so must look into changes. 

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Coverage varies widely depending on policy.  Be sure to read the full Description of Coverage document including the definitions to know if your policy includes Default/Bankruptcy and if you must be a third party (or not).

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It’s one of the reasons I like this Nationwide policy so much. Below is the coverage and you can see it’s broad and offers great coverage. 
 

Remember that while Carnival is the parent company, the brands are essentially run as separate business lines. So if Carnival had to cut costs seems to be the Elimination of an entire brand under the umbrella would be easiest. No idea how this would be classified. Appears Princess is a wholy owned subsidiary and so to me, if Carnival shuttered the Princess line it would be covered. I’m sure some insurance lawyer would disagree with me. 


 

 

Nationwide Luxury Cruise Policy excerpt:

 

Bankruptcy and/or Default of Your Travel Supplier that occurs more than fourteen (14) days following Your Effective Date. 
Coverage is not provided for the Bankruptcy or Default of the agency from whom You purchased Your Land/Sea 
Arrangements. Your Scheduled Departure Date must be no more than twenty-four (24) months beyond Your Effective Date. 
Benefits will be paid due to Bankruptcy or Default of an airline only if no alternate transportation is available. If alternate 
transportation is available, benefits will be limited to the change fee charged to allow You to transfer to another airline in 
order to get to Your intended destination. This benefit only applies if the insurance has been purchased within final payment 
for the Trip and for the full cost of the Trip;

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2 hours ago, Steelers0854 said:

It’s one of the reasons I like this Nationwide policy so much. Below is the coverage and you can see it’s broad and offers great coverage. 
 

Remember that while Carnival is the parent company, the brands are essentially run as separate business lines. So if Carnival had to cut costs seems to be the Elimination of an entire brand under the umbrella would be easiest. No idea how this would be classified. Appears Princess is a wholy owned subsidiary and so to me, if Carnival shuttered the Princess line it would be covered. I’m sure some insurance lawyer would disagree with me. 


 

 

Nationwide Luxury Cruise Policy excerpt:

 

Bankruptcy and/or Default of Your Travel Supplier that occurs more than fourteen (14) days following Your Effective Date. 
Coverage is not provided for the Bankruptcy or Default of the agency from whom You purchased Your Land/Sea 
Arrangements. Your Scheduled Departure Date must be no more than twenty-four (24) months beyond Your Effective Date. 
Benefits will be paid due to Bankruptcy or Default of an airline only if no alternate transportation is available. If alternate 
transportation is available, benefits will be limited to the change fee charged to allow You to transfer to another airline in 
order to get to Your intended destination. This benefit only applies if the insurance has been purchased within final payment 
for the Trip and for the full cost of the Trip;

 

Once again, this is third party so it only counts if you booked your cruise through a travel agent, not directly with the cruise line. The travel agent is the intermediary (second party).  That is why the second sentence is included.

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In the USA we have protection through the Fair Credit Billing Act (1974) and some additional laws and regulations that require credit card companies to give us "chargebacks" in the case of bankruptcies.   So, in most cases a resident of the USA can recover all their payments (made on a major charge card) in the event of a bankruptcy.  Our own experience has been that the money is generally credited back to one's account within a few days.  So in our country, paying for insurance against bankruptcy might mean spending unnecessary money on insurance.  

 

We have never had a problem getting our money back with bankruptcies.  When Regent Cruise lines when bankrupt, AMEX returned our money the same day.  When Renaissance Cruise lines went under we also got our money back the same day.  Most recently we filed a chargeback request to recover money lost when Flybe Airlines went bankrupt (this past March) and quickly got our money refunded.

 

 

Hank

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