Here is an informative excerpted article by Alfred Borcover
of the Chicago Tribune about why you should
consider trip insurance. The complete article was published
in the Orlando Sentinel.
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If there are any lessons to be
learned from the recent demise of four cruise lines that impacted
thousands of travelers, they are:
Pay for your cruise with a
credit card, not by check and not by cash.
Buy trip cancellation insurance
to protect your vacation investment against sudden illness, a
death in the family or default by a cruise line or tour company.
In December, Commodore Holding Ltd., parent company of Commodore
and Crown cruise lines, canceled future cruises on three ships and
filed for bankruptcy. Last September, Port Canaveral-based Cape
Canaveral Cruise Line folded. A week later, Premier Cruise Lines,
a budget-oriented operation also based at the port, suddenly
ceased sailing when the investment bank of Donaldson, Lufkin &
Jenrette, which was keeping the line afloat with about $55 million
in loans, pulled the plug and left 2,800 passengers with
abbreviated voyages or no voyages at all.
Last June, Toronto-based World Cruise Co., another budget-oriented
line that featured around-the-world voyages, ceased operation and
left 225 passengers stranded in Tahiti and several hundred others
who had paid for a cruise with no ship at all.
So there you are, on a cruise having a blast, or eagerly awaiting
your trip of a lifetime. And all of sudden, your vacation is in
the tank. And you've already paid thousands of dollars for your
dream trip...........
What's a person to do? Who can you scream at first? Well, if you
opted not to pay by credit card and then declined to buy trip
cancellation and interruption insurance that includes trip cost
financial default protection, you might as well scream at
yourself. A defunct cruise line or tour operator won't be around
to listen. And there's nothing your travel agent can do.
On the other hand, if you pay for your cruise or tour by credit
card and you buy trip cancellation insurance, you have fall-back
positions. People also buy travel insurance for the other
coverages policies provide--trip interruption, travel delays,
baggage loss, emergency medical expenses and medical evacuation.
When a cruise line or tour company goes under and you have paid by
credit card, the best thing to do is not get hysterical, but
prepare to take action. While your agent can help you, you can
help yourself by having your payment records ready. If you charged
your trip, start by contacting your credit-card company.
"Under the Fair Credit Billing Act , it would be considered a
billing error if the product, or in this case the cruise, was not
delivered as agreed," said Cindy Liebes, an Atlanta-based attorney
for the Federal Trade Commission, which oversees the act.
"The law says you only have 60 days from when the original charge
showed up on your bill to make a claim," Liebes said. "But many
credit-card companies will often honor those billing errors after
the time limitation. So we usually advise consumers to try to
charge it back [seek a refund] and see what happens. Legally the
charge-card company is not obligated to honor the claim, but they
will."
Liebes said consumers also can try to get refunds under the
"claims and defenses" provision of the Truth in Lending Act, but
it has complex limitations too. "There are a couple of things we
usually advise consumers if they call," Liebes said. "Buy trip
insurance -- definitely not through the cruise line, but through
the insurance company or the travel agency. And if something
happens, go through their credit-card company to get a chargeback.
If you get a letter back saying 'no,' keep fighting. The squeaky
wheel often gets oiled."
In the case of Premier Cruises, Dan McGinnity, spokesman for
Travel Guard, based in Mineral Point, Wis., said, "We expect our
exposure -- the amount of money we will pay out in covered claims
-- is going to exceed $1.5 million."
Travel Guard covers not only trip cancellation and interruption,
but financial default. McGinnity said Travel Guard encourages
people to seek chargebacks from their credit-card companies. He
also noted that Premier carried a $15 million surety bond,
required by the Federal Maritime Commission, to pay passengers as
well as suppliers for nonperformance. "For policyholders, we
settle the claims and then work with the bondholder for financial
reimbursement."
Travel Guard bases the cost of its policies on the price of the
trip. Premiums range from $45 per adult (for a trip up to $500) to
$859 (for a trip costing $9,001 to $10,000). The policy also
covers $10,000 in medical expenses, $20,000 for emergency medical
transportation, and lost or stolen baggage coverage, trip delay,
baggage delay and pre-existing medical conditions if the policy is
purchased within seven days of the initial trip deposit.........(
End of
article )
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Note: Travel Insurance offered
by the cruise lines do not cover you if the cruise line goes out
of business. Only certain 3rd party insurance companies cover that
possibility.
Some policies do not cover
preexisting medical conditions, while others require that the
insurance be purchased within seven to 14 days of making the
initial cruise deposit. Many policies purchased from the cruise
lines exclude coverage for preexisting medical conditions.
Find out more about travel insurance
online
Hint: To be sure you are getting the
kind of coverages you want, read all the fine print and understand
fully the benefits and limitations of the policy on offer, before
you buy.
In addition to what most policies
provide--trip interruption, travel delays, baggage loss, emergency
medical expenses and medical evacuation, here are some suggested
questions to ask when calling an insurance provider:
-
Will the policy cover loss due to
default or bankruptcy of travel suppliers?
-
Does
the policy cover travel delay due to weather or other unforeseen
circumstances?
-
Will the policy cover cancellation
charges and expenses due to injury or sickness of your traveling
companion though he/she is not your family member?
-
Will the policy cover cancellation
charges and expenses due to injury or sickness of a member of your
immediate family though he/she is not traveling with you?
-
Will the policy cover cancellation
due to outbreak of strike, riot or civil disturbance at your
destination or places en-route?
-
Does the policy cover loss or
injuries due to war, acts of terrorism, hijacking and natural
disasters?
-
Will the policy cover cancellation
due to any natural disaster happen to the insured person's
residence before or during your journey which requires your
presence on the premises?
-
Will the policy cover breakage or
damage to fragile articles or documents in your luggage?
-
Will the policy cover loss of travel
documents, and/or travel tickets and additional travel &
accommodation expenses incurred to replace them?
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