Did You Know Pre-Departure Waiver Plans
Aren’t Really Travel Insurance Plans?
What is commonly know as a “pre-departure waiver / protection” plan is mostly a promise to pay on the part of the cruise line, tour operator or travel supplier for the trip cancellation and trip interruption benefits. These plans can include elements of insurance to pay claims for trip delays, accident and sickness medical benefits, evacuation and/or baggage protection.
“The difference between the almost right word and the right word is like the difference between a lightning bug and a lightning bolt” – Mark Twain
Is everything called “travel insurance” really insurance?
No. The phrases “travel insurance”, “trip insurance” and “cruise insurance” are glibly thrown around causing many people to assume all plans are essentially the same – they are not.
Steve’s biggest Pet Peeve is the Deceptive selling of “non-travel insurance pre-departure waiver / protection plans” as “Real Travel Insurance Plans”
I (Steve) used to be a Certified Financial Planner (I’m still an insurance agent). I get frustrated with how honest people are led to believe that they are getting a real trip, travel or cruise insurance plan by the very companies arranging their travel.
Here’s Why: Insurance is actually a legal term and it has certain understandings associated with it. Yet, many people in the travel business, who are not insurance agents, seem to apply the phrase “travel insurance” to every type of “protection plan” and “waiver plan”.
Take a look at Chris Elliott’s article “6 questions to ask before buying trip insurance” for more information (I, Steve, am in it, too).
Travel Insurance and Cruise / Travel Supplier Waiver Plans seem the same. They are not. Here’s why:
Cruise Line / Travel Supplier Waiver Plans
|Coverage type||Trip Cancellation Travel Insurance is regulated by your State’s Insurance Department (If you have a dispute, your State’s Insurance Licensing Department can help you)||Pre-departure waiver programs are not 100% Travel Insurance. They contain elements of insurance, but are mostly a promise to pay on the part of the cruise line, tour operator or travel supplier. (If you have a dispute, your State’s Insurance Department cannot help you)|
|Does the plan include any “Real Insurance”?||Yes, wording in the Certificate of Coverage that references an Underwriter means that you have a “Real Insurance” company involved.||Travel Supplier Waiver Plans may include an insurance portion. Certificate of Coverage wording referencing an Underwriter means that part is the “Real Insurance”.|
|How You are Paid In the Event of a claim for a Covered Reason||A check in US Dollars – 100% Cash Back||A check in US Dollars or non-transferable Partial Cruise Credits that have to be used within one year. The credits are not insurable when you use them for the second trip, so don’t cancel that second trip. The payment depends on the reason you have a claim.|
|How Pre-existing Conditions are covered||You get your claim paid in US Dollars||A check in US Dollars or non-transferable Partial Cruise Credits that have to be used within one year. The credits are not insurable when you use them for the second trip, so don’t cancel that second trip.|
|How You are Paid In the Event of a Cancel For Any Reason claim||A check in US Dollars – 75% Cash Back||Non-transferable Partial Cruise Credits that have to be used within one year. The credits are not insurable when you use them for the second trip, so don’t cancel that second trip.|
|How Is Independently Arranged Travel Covered? (what you book on your own)||You get 100% cash back of all non-refundable, prepaid trip costs including third party airline tickets and any side trips or excursions.||Just the cost of the cruise or the tour is covered. The items covered through the travel supplier waiver plans are items that are purchased directly from the travel supplier.|
|Trip Cancellation coverage||Travel Insurance Trip Cancellation covers you until the moment you leave home||Travel Supplier Waiver Plans’ cancellation fee waiver often ends 24, 48 or 72 hours prior to departure|
|Travel Supplier Default||Yes, this can be covered if you meet the rules||No coverage|
|How is the Price Calculated?||Price based on age of traveler – usually less expensive if you are under age 86. Most of our plans cover children 17 & under for free.||Usually one price for all ages – tends to be less expensive if you are over age 80. No one is covered for free.|
|Family Members||Usually the Insured’s spouse, domestic partner, child, parent, sibling, grandparent or child, step-parent, child or sibling, son- or daughter-in-law, parents-in-law, brother- or sister-in-law, aunt, uncle, niece or nephew, legal guardian, legal ward.||Usually your immediate household members|
|Terrorism||You can cancel or interrupt when it occurs in a city on your itinerary||May or may not be covered|
|Emergency Medical||Up to $1,000,000||Often limited to $10,000 or $25,000, but can be higher|
|Emergency Medical Transportation||Up to $1,000,000||May be limited to $25,000 or $50,000|
Read this unsolicited testimonial one of our clients sent us:
Here’s just one more reason why it pays to get independent travel insurance. As you know, my husband and I booked our travel insurance through you for our Oceania Mediterranean cruise. But on the same trip, our parents booked through the travel agency because they are upper 70’s/80 and the rates were much cheaper to get the basic insurance. However, they are also deviating their trip and adding a hotel stay at the end – as well as prepaying for some independent tours.
Here’s what I found out when I inquired as to what the cancellation policy was on their insurance: Those travelers who book insurance through the cruise line (or the agency booking the cruise) do not have coverage on ANY independent arrangements. When traveling to other countries in particular, it is customary that arrangements must be guaranteed on a credit card in advance and there are usually very strict cancellation penalties. In the case of our trip, my in-laws will be responsible for those costs, but we will not. Julie A., St. Louis, MO
Here’s Wording From An Actual Cruise Line Plan:
“Guests must cancel their cruise prior to departure and must file a cancellation claim with ________, the program administrator, to be eligible for future cruise credits. Credits expire one year after issue date, are non-transferable and not applicable to holiday or inaugural sailings. Credits have no cash value and, if applied to a booking of lesser value, will not result in any difference refunded in cash. Credits may not be used for deposits, only final payment and can be used only on the cruise brand originally booked. Only original copies of credit letters can be accepted; copies or altered letters may not be used.”
This is what the Cruise Line says are benefits to the Travel Agent: (Read: Not to you, the customer)
- Commission Protection: We recognize the frustration that can result when a canceled cruise vacation erodes your commission. At _______, we want to make sure that your hard work is compensated. _______ provides commission protection if your insured client then cancels their cruise vacation. You receive your actual commission amount on fully-paid bookings with _______, up to a maximum of the penalty imposed should your client cancel their cruise for any reason.
- Easy Enrollment: _______ is automatically included on your client’s invoice. To enroll your clients, simply advise your clients to pay the total invoice amount, inclusive of _______ when making their final payment. Your client is enrolled upon our receipt of the full payment for their vacation, including this plan’s amount.
You don’t want to be tricked into buying, do you?
PPS - Even though TripInsuranceStore.com is the world's most informative travel insurance website, you are still responsible to know the coverage terms, conditions, limitations, and exclusions of your plan. No comments or explanations confirm or deny coverage. You need to refer to each plan's policy wording.
PPPS - The Trip Cancellation coverage begins at 12:01 a.m. on the day after the date the policy is purchased. All other coverages begin when you leave home for your trip when your departure date is in the future.
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