Still one of the fastest-growing sectors of tourism, cruise has rebounded post-pandemic with passenger volume expected to reach 31.5 million passengers sailing this year, according to Cruise Lines International Association’s 2023 State of the Cruise Industry Report. The research shows that 73 percent of younger consumers surveyed will consider taking their first cruise, with most turning to travel advisors to book their trips. Phocuswright’s recent travel research also saw travel advisor bookings growing steadily since September.
But unlike 2019 bookings where consumers might add a supplier cancellation waiver to their purchase, today’s cruise traveler is aware that this type of vacation has many moving parts where things can – and do – go wrong after departure, including on-trip incidents like lost or stolen belongings, illness or accidents. And with travel costs soaring in an uncertain economy, travelers are looking for ways to avoid these costs coming out of their pocket.
About a third of travelers plan to spend more on travel this year than in 2022, according to a recent World Travel and Tourism Council report. And since Americans spend about 10 percent of their annual income on vacations, it makes sense to protect that investment. Purchasing third-party travel insurance has become the gold standard, says Angela Hughes, owner of Trips and Ships Luxury Travel in Winter Garden, Florida, noting that 90 percent of her clients opt for plans offering pre-departure and post-departure coverage when they cruise.
“I train my agents to always offer travel insurance because I think everybody needs it; there are so many incidents that can happen – from the death of a loved one, to a heart attack, to dying on the trip – that makes having travel insurance benefits super important,” she says.
“A honeymoon couple in their 20s doesn't need what a 70-year-old needs, and there can be a difference when they buy it themselves versus buying it through the cruise line or tour operator,” she explains. “In some cases, the cruise lines’ waiver may not extend to an expensive pre- and post-package; it just applies to that cruise piece, not their air or the additional 10 days they added on. So, if they’ll be in Tanzania, they may want more evacuation coverage or extra rental car insurance in Europe.”
Alice Stickney, travel consultant for Fairfield, N.J.-based Alice Travel, adds that her team emphasizes clients are buying trip protection, not just cancellation protection.
“While it does have trip cancellation benefits, we have just as many claims post departure as we do pre-departure,” she adds. “I travel a lot with groups, and because they've seen these things happen, they come in to make a deposit and say, ‘Don't forget to do my insurance’.”
Anything can happen…to anyone…at any time
Both Stickney and Hughes have seen many unexpected problems and emergencies arise during a cruise. Several years ago, on one of Hughes’ Caribbean group cruises, the teenage son in one of the families had a bad accident.
“He slipped on the ship and a sprinkler poking out of the side of the wall severely injured his eye. It was awful,” she recalls. “They turned the entire ship around and took him back to the Cayman Islands for hospitalization. We weren't far, but that resulted in an entire ship missing their flights out of Miami.”
Hughes had one client who was in a European port when her mother died, and another who suffered a heart attack during a river cruise in Switzerland. Thankfully, Hughes’ clients had all purchased travel insurance that was able to reimburse them for their covered medical and travel costs.
Stickney was recently on a group cruise when her client had a heart attack onboard.
“We called the insurance company, and they had an ambulance waiting when the ship docked in New Orleans the next morning.”
The insurance company paid for the wife’s expenses while she stayed with him, and for a nurse to fly home with the couple.
“They had transportation waiting at the airport to bring him to his house, which was two hours away, and the nurse stayed with him all the way home,” adds Stickney. “Clients that have traveled with me have seen this, and they're more interested in getting their insurance more than ever.”
Dispelling the ‘I don’t need insurance’ myth
“People might think, ‘I'm healthy; I don't need insurance’, but my husband’s aunt – who was in her early 60s and healthy – died during a flight to India,” says Hughes.
“She got up to go to the bathroom, said she didn’t feel well and died of a blood clot. It was so expensive to take care of everything and travel insurance picked up a lot of that.”
Most clients who don’t purchase insurance end up regretting it if something unexpected happens, she adds.
“My client stepped on some glass in Mexico and it was a $15,000 upfront cash payment to be stitched up in the hospital,” she says.
Understanding the value of travel insurance versus a supplier waiver
But while travelers appreciate the value of travel insurance, most don’t understand the difference between non-insurance supplier waivers provided by cruise lines or tour operators and travel insurance with pre- and post-departure benefits provided by travel insurance companies. That’s why advisors should be aware that waivers often may only reimburse for travel-related issues like a cancellation or interruption related to the cruise but don’t offer insurance benefits to protect you in the case of covered events like airline cancellations or other on-trip things like travel delays, emergency medical care and transportation, or lost, stolen, or damaged personal items, notes Stickney.
“It depends on what the client is most concerned about, what their age is and what they're booking,” she says. “If you're buying a cruise and getting the air separately and also booking a hotel, the supplier waiver will only cover the portion that they're responsible for.”
If that flight is canceled due to a snowstorm, your client is on their own to get to the next port if they miss the ship, for example.
“So, with travel insurance, you can bundle all your non-refundable trip expenses together and insure that, and get post-departure benefits with that. Then, they have benefits for cancellations as well as for things like medical emergencies that may come up after departure also. We do give them both options, and let them decide; 90 percent of the time, unless it's a ridiculously big differential, they take the travel insurance.”
Timing is everything
Although travel insurance can be purchased at any point before a trip, Hughes notes that advisors may not know that there are advantages to the customer buying early, especially if they have a pre-existing medical condition.
“Policies will fluctuate on what's available based on how far out you are, but in a lot of cases, if the customer doesn’t purchase within the policy’s required time period from initial deposit, it can become a liability for the advisor. A client can come back and say, ‘We wanted to cancel for any reason, and now we're outside of that deposit time period’ or ‘We have a pre-existing condition we wanted covered and it’s too late now’,” she explains.
Global assistance service is key
Beyond a lost baggage allowance and picking up the hospital tab, travel assistance is perhaps the most valuable component, especially in an emergency when a client is distraught and afraid, says Stickney.
“Having somebody not only reimburse covered expenses, but also arrange everything for you is very important,” she explains.
“A client of mine was on a cruise out of New York, and the day after they sailed, she fell down the steps and broke her arm, her shoulder and her neck. Thank goodness they had travel insurance because her husband called us from the ship and said, ‘I don't even know what to do’. We told him the first thing to do is call the insurance company, tell them you’re traveling and that this is an emergency. They will work with you on whatever has to be done.”
When the ship got to Cape Canaveral, Stickney’s client was taken to the hospital. They had to fly her home on an ambulance plane because she couldn't sit up. And all the arrangements were taken care of – which was priceless.