COVID-19 Cruise Cancellation Protection

Photo by Patrick Van Brussel on Unsplash

First published April 1, 2020

The House Subcommittee on Economic and Consumer Policy recently announced an investigation into the experiences some consumers have had when acting on Centers for Disease Control’s advice not to travel abroad. After cancelling their vacation plans, these would-be travelers have reportedly been disappointed by their travel insurers.

The Subcommittee invited three insurance executives to testify in mid-March. They declined. The Subcommittee has now requested each produce information on denied coronavirus-related claims and sit for a transcribed interview.

The attached looks at one segment of travel protection products — those sold directly by major cruise lines. A few interesting observations come out of this review:

  • Cancellation protection for cruises is often provided outside of any insurance contract (and therefore outside of state insurance regulation);
  • The most likely benefit from cancellation for fear of exposure to coronavirus on a cruise is a voucher toward another cruise not a cash refund; and
  • Cruise lines are selling protection against their own cancellation policies — policies they are free to change and some now have in a bid to attract new bookings.

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Jason Schupp

Jason Schupp

Founder and Managing Member of Centers for Better Insurance, LLC