Serious question: Why does anyone buy trip insurance unless old or tight budget?

[old nutter]

If you have had cancer or heart problems you can end up having to pay anything up to 30%, even if you haven't still got problems. I have seen some companies quoting up to $4000 for two weeks in the USA for a UK resident who has had cancer in the past year.

 

Some companies will quote and then get on all sorts of support sites and I am sure some of these companies just say they will then quote for people with past conditions and give silly figures in the hope that the punter will opt to buy insurance without medical cover for a more realistic figure.

 

All insurance is a gamble for both sides. Like all gambling, the house owns the game and always wins. Travel insurance is a gamble and it is poor value if you never need it. However, if things go wrong big-time the trip could easily end up up the bankruptcy court. It really is a big-time gamble with no wins for the traveler if all goes well but huge potential losses if not.

[sjbdtz]

OP, I have a slightly different question for you.

 

 

If you start a thread WITHOUT the preface "Serious Question: ",

are we to estimate that you're just trying to stimulate chatter

amongst us?

 

 

Reminds me of the notion that whenever somebody starts a phrase with

"To be honest...", I immediately assume they haven't been so far, and aren't usually.

 

 

:D

 

 

 

.

[The Mister]

All insurance is a gamble for both sides. Like all gambling, the house owns the game and always wins. Travel insurance is a gamble and it is poor value if you never need it. However, if things go wrong big-time the trip could easily end up up the bankruptcy court. It really is a big-time gamble with no wins for the traveler if all goes well but huge potential losses if not.

Insurance is not at all the same as gambling.

 

Gambling is the *creation* of risk / variance. (Abstaining results in neither gain nor loss; participation guarantees one or the other.)

 

Insurance is the reduction or mitigation of risk / variance. (Abstaining results in your remaining exposed to adverse peril; participating results in paying a small price to protect against said peril - locking in an affordable "loss" to mitigate the potential for a much larger one.)

 

The idea that a person "wins" when something terrible happens is wrong. Voluntarily *rejecting* insurance is itself a kind of gamble.

 

However, rereading your post, it seems you actually agree, at least on the last point.

Edited July 25, 2014 by The Mister

[smeyer418]

I don't comment on UK insurance its so much different that it is here in the US.

Not all states are "highly regulated" some are some aren't. Florida is one of the higher regulated states but that didn't stop someone from opening a reimbursement plan, claim it wasn't insurance and creating havoc among some TA's...it went belly up.

and finally I bought an Amex policy last year that had no prior existing condition restrictions as long as you had medical coverage in effect and you could buy that up until the day you sailed without a restrictionon prior existing conditions. That may have been because of NY's requirements or could in fact be because of the Federal law(I don't want to get into a political discussion but the ACA does away with prior existing conditions exclusions as long as you have reasonable continuous coverage but if it applies to travel insurance is beyond me-Amex obviously thought it did. ).

 

I was ex vp and general counsel of a national ppo which had contracts in every state and for full disclosure NCL service provider for emergency medical issues is On Call International of which I was a small part owner a number of years ago!

[The Mister]

I don't comment on UK insurance its so much different that it is here in the US.

 

Not all states are "highly regulated" some are some aren't. Florida is one of the higher regulated states but that didn't stop someone from opening a reimbursement plan, claim it wasn't insurance and creating havoc among some TA's...it went belly up.

All states are regulated by the NAIC. The basic rules are mostly uniform. Some states do have additional regulations in place, but consumer protection and financial regulations are mostly the same.

 

Having said that, however, those regulations are a mere deterrent of criminal behavior, and cannot 100% prevent people trying to take advantage of others. The behavior you describe is, in fact, criminal (in all states) and was hopefully prosecuted (or in process).

Edited July 25, 2014 by The Mister

[smeyer418]

All states are regulated by the NAIC. The basic rules are mostly uniform. Some states do have additional regulations in place, but consumer protection and financial regulations are mostly the same.

 

Having said that, however, those regulations are a mere deterrent of criminal behavior, and cannot 100% prevent people trying to take advantage of others. The behavior you describe is, in fact, criminal (in all states) and was hopefully prosecuted (or in process).

the Naic is not a regulatory body. Its the National association of insurance commissioners the individual commissioners do have such authority. They do draft suggested uniform laws which some legislators pass and some ignore. Yes its criminal in most but actually not all states. Having spent some time being called in by some of the commissioners I can tell you some states are more serious about the rules than others.

 

http://www.naic.org/index_about.htm

[OzCanuck]

Insurance is not at all the same as gambling.

 

Gambling is the *creation* of risk / variance. (Abstaining results in neither gain nor loss; participation guarantees one or the other.)

 

Insurance is the reduction or mitigation of risk / variance. (Abstaining results in your remaining exposed to adverse peril; participating results in paying a small price to protect against said peril - locking in an affordable "loss" to mitigate the potential for a much larger one.)

 

The idea that a person "wins" when something terrible happens is wrong. Voluntarily *rejecting* insurance is itself a kind of gamble.

 

However, rereading your post, it seems you actually agree, at least on the last point.

 

Thank you - I was going to post the same thing. And - contrary to popular belief, it's not as over-the-top profitable as one would imagine. Loss ratios in general are lower than most other classes; but acquisition costs (i.e. commissions) and expenses are higher. And it only takes one or two medical repatriations to destroy a year of good results.

 

I don't really see what this discussion is all about. Buy it if you feel you want it, don't buy it if you don't want it?? And if you do want it - try and buy an annual policy which will bring that 5-10% rate down to 1-2%, depending on your travel habits. An insignifcant amount for protection.

[The Mister]

OK, so, as a person who works in the insurance industry, I have access to financial professionals who know a bit more about this issue from the "inside". So I asked some questions and got some answers.

 

The most telling response is, unsurprisingly, right in line with what people here on CC have been saying all along:

The wholesale/broker market has typically very low loss ratios [claims], but very high expense ratios [i.e., commission rates, but also cost of administration, etc.].

 

The newer internet based direct to consumer products are much cheaper hence higher loss ratios and lower expense ratios.

 

fwiw if you want to buy this product never buy it from wholesaler ie Orbitz, Travelocity, etc it is always overpriced with bloated commission rates. Go to Squaremouth or Insuremytrip instead.

 

"Rich" loss ratio does not necessarily equal high profitability. I watched an old employer choke on a warranty book with a 25% loss ratio a few years back.

Oh, and thank you, OzCanuck! It seems you've ninja'd me as well. :)

Edited July 25, 2014 by The Mister

[The Mister]

the Naic is not a regulatory body. Its the National association of insurance commissioners the individual commissioners do have such authority. They do draft suggested uniform laws which some legislators pass and some ignore. Yes its criminal in most but actually not all states. Having spent some time being called in by some of the commissioners I can tell you some states are more serious about the rules than others.

 

http://www.naic.org/index_about.htm

Thank you for your clarification. I defer to your knowledge / expertise. (It's been a while since I've had anything to do with the commissioners, so I'm a bit rusty.)

[smeyer418]

Thank you for your clarification. I defer to your knowledge / expertise. (It's been a while since I've had anything to do with the commissioners, so I'm a bit rusty.)

LOL you are welcome. I do think sometimes its a definition. Travel Insurance is still relatively profitable compared to some lines. As almost always the more entrants-competition- keeps prices down. Sometimes the companies sacrifice profits for volume. and sometimes competition cannibalizes profits too...

BTW not all states allow the Insurance commissioners the power to regulate prices(or profits) only whether they have adequate reserves. and lastly most but not all of the companies re-insure large claims.

[smeyer418]

I am posting this separately since its ot and will probably be reported and taken down.

My presence was "requested" by the Insurance Commissioner of Illinois. getting from NY to Springfield is not the easiest thing and I had one of those days with cancelled flights running to make a plane and the small plane having to be called back to the gate to get me.

I had a lawyer with me from a white shoe firm in Chicago. The meeting did not start out well. He yelled at me something about being a carpetbagger and I yelled back. after a few minutes of that, I asked what he wanted and he said a couple of things nothing major...and I said we can do that! So the meeting didn't last that long. we had a couple of hours to kill before my flight back and we could either do a fancy lunch or fast food and visit Lincoln's grave. We grabbed a Wendy's lunch and visited the grave. it was a sunny winter day and we proceeded to eat the lunch one a picnic table in the cemetery. The lawyer told me she had never eaten Wendy's before and it wasn't bad. They issued the license the following day....

[CrossBluePerchance]

Must've been a fairly long meeting if the lawyer had time for a sex change from 'he' to 'she'? ;)

[smeyer418]

Must've been a fairly long meeting if the lawyer had time for a sex change from 'he' to 'she'? ;)

 

LOL only in Illinois is it covered by insurance...and I don't think I id'ed her before the last few sentences...

[chrispb]

Err, because I will be in a foreign country and if I have an accident or become ill I still want to own my house when I have recovered. This is especially true when I visit the USA.

 

Absolutely.

 

We, in the UK, have had it drummed into us for years that it is wise to buy insurance before travelling. There were numerous reports in the press about young people having accidents or illnesses and parents having to either sell their homes or re-mortgage to pay hospital bills. I think people have now wised up because I haven't read about this happening for a couple of years.

 

I think we are way ahead of the US with travel insurance and it seems to me that you guys across the pond pay a LOT more than us. Our insurance is such a small amount that it's no big deal to buy it anyway.

[Jobeth66]

I'm the US insurance risk manager for a multi-billion dollar multi-national. I evaluate risk/reward on insurance products for my company every single day.

 

I don't take a trip without purchasing trip insurance. Can I afford to eat the cost of the vacation? Definitely. Do I want to? Definitely not. If I can spend less than 5% of the cost of a trip - or what may seriously be the equivalent of a really nice family dinner out, or (for a really BIG vacation) the price of a night in a NYC hotel - in order to protect my investment, you can bet darn well I'm going to.

 

Do I shop around and get the best deals I can find? Certainly. I always purchase medical primary insurance (and there's a good policy where if you purchase within the first 14 days, they do make their medical primary at no additional cost).

 

I used to work for a brokerage that handled Atlantic City & Las Vegas casinos. Resorts International, Hilton and Trump were my clients. Trust me, none of them built large gaudy casinos by giving money away. For every "pokerpro" that makes money, the house makes more. That's a waste of money.

[pokerpro5]

So why did I ask what everyone's "breaking point" was regarding insurance prices?

 

I asked because most of the answers I got to my previous question were quite poor.

 

My initial question was, "Why does anyone buy travel insurance unless you're old, in poor health (or have a relative in poor health), or on a tight budget?"

 

I reasoned that it was foolish to buy trip insurance unless you were in one of the above categories. My reason was based upon the fact that the cost was very high compared to what coverage you were receiving.

 

Most of the answers I received were of the following variety:

 

- I am buying it for peace of mind

 

- I bought it (no reason given) and I had to file a big claim later on, so I made the right decision (aka results-oriented thinking)

 

- It's paying a small amount of money to protect a larger investment

 

- Foreign medical expenses and evac expenses are so high that I have to protect my savings

 

 

All of the above answers, while appearing reasonable on the surface, would also be valid if the insurance were to cost double or triple of what it currently does.

 

It would still give you peace of mind. It would still protect you from high foreign medical costs. It would still be a relatively small investment to protect a larger investment.

 

We even had someone in the thread who laughably said they would pay quadruple (!!) for their same trip insurance coverage.

 

But that aside, I put that question forward because insurance rates that were double would change nothing except for your value. You would have the same coverage, but would just be paying double for it.

 

So why would some of you find that unacceptable? Why would some of you refuse to buy it at that point?

 

Because you would deem it to be of such poor value that it wasn't worth buying, even if it were protecting you somewhat from financial hits due to misfortune.

 

And that was my point in the first place. Trip insurance is already of very poor value. It doesn't need to double in rates to get there.

 

Yes, there are some cheaper trip insurance firms, and those have been posted in this thread. (See? Something good actually came of this whole thing. I really wasn't trolling!)

 

But even the better value trip insurance companies are still offering poor value. As was already explained here, the trip insurance industry's main costs were commission and overhead, NOT claims! That's bad news for the consumer. It means that a very small percentage of overall premiums end up back in the pockets of the insured -- which means you're getting terrible value.

 

Many other forms of insurance have a much higher rate of return to the average insured. This includes auto, health, and home. Life insurance is a mixed bag when it comes to value, but you can do fairly well if you shop around properly.

 

The worst-value insurance for the consumer tends to be the "one and done" policies -- where you are insuring a single event. This is because such insurance can be sold for a deceptively low price, as the insurance company's exposure is relatively small.

 

A good example of horrible value (but often-purchased) insurance is the LDW (loss damage waiver) at rental car companies. It appears on the surface to be a great bargain. For just $9/day (sometimes more), you can protect yourself against having to pay for any damage to the car, regardless of fault! Wow!! Just $9 per day to insure a car worth $20k or more? Sign me up! But do the math and reality sets in. Multiply by 365, and you're paying $3286 per year for ONLY COLLISION COVERAGE on a vehicle that isn't worth very much. That's a markup of about a factor of 8. Car rental companies now also sell daily liability insurance, as well, and make even more money from suckers. You actually have fools paying as much as $30/day for supplemental rental car insurance!

 

(Funny aside - About 15 years ago I was dating a girl who worked for Enterprise, and she stopped seeing me after we argued about whether or not the LDW was a good value!)

 

So while most of you believe it's "reasonable" to pay 5-7% of your trip value for trip insurance, yet it would be unreasonable to pay 10-14%, keep in mind that 5-7% left "reasonable" territory a long time ago.

 

I will say that I did learn one thing from this thread, which I will be examining next time I travel to a non-Canada foreign country. That's foreign medical insurance. I think that might actually be a valuable thing to have, even if also a poor value, simply because of the catastrophic financial consequences that can occur from not having it and running into some awful luck.

 

However, for most of you insuring the cost of your trip itself.... all I can say is that you're being taken for a ride and probably don't realize it.

Edited July 25, 2014 by pokerpro5

[Laszlo]

However, for most of you insuring the cost of your trip itself.... all I can say is that you're being taken for a ride and probably don't realize it.

 

You either must be stuck in a room all day with nothing to do or your going to try and sell us something.:roll eyes: You have repeated yourself time after time on this thread. Its time to get over it and move on

Edited July 25, 2014 by Laszlo

[HowardK]

I agree on the LDW, and wouldn't have dated that person in the first place had I known her views! Most credit card companies offer insurance within their term agreements to begin with so LDW is sometimes and often redundant.

 

I myself personally, do not balk at the $139 insurance cost given it comes to $19 + a day. I consider it part of the sunken cost of the trip along with port fees, cabs to and from hotel/ship and the DSC.

 

I would agree if I did my research I would get a better deal with a Third party but in my estimation (correct me with specifics) I might be saving $60-$70 on the policy.

 

And with less claims, I agree with you it seems the insurers are making a larger profit margin than other types of insurance.

How much shoud such coverage be then, perhaps a third as much?

 

On one hand, the lower rate of return could be good in the sense that less claims are needed. On the other hand, given that lower claim/premium %; the premiums should be lowered to be more in line with other areas.

 

The same can be said for other areas; is it worth buying a extended warranty on a car, computer or TV? On a $400 laptop I would argue no since a Amex card could double the manufacturers warranty.

On a TV, I did pay $130 for 4 years on a $1100 tv, but had the price lowered and used some of that towards the extension. I won't get into cars though thats something for a car forum.

 

If i estimate my total cruise cost (hotels, etc.. everything, at $1,600- the $139 I am comfortable with. For $300, I would be looking at a third party if it was a higher cost.)

[pokerpro5]

I agree on the LDW, and wouldn't have dated that person in the first place had I known her views! Most credit card companies offer insurance within their term agreements to begin with so LDW is sometimes and often redundant.

 

I myself personally, do not balk at the $139 insurance cost given it comes to $19 + a day. I consider it part of the sunken cost of the trip along with port fees, cabs to and from hotel/ship and the DSC.

 

I would agree if I did my research I would get a better deal with a Third party but in my estimation (correct me with specifics) I might be saving $60-$70 on the policy.

 

And with less claims, I agree with you it seems the insurers are making a larger profit margin than other types of insurance.

How much shoud such coverage be then, perhaps a third as much?

 

On one hand, the lower rate of return could be good in the sense that less claims are needed. On the other hand, given that lower claim/premium %; the premiums should be lowered to be more in line with other areas.

 

The same can be said for other areas; is it worth buying a extended warranty on a car, computer or TV? On a $400 laptop I would argue no since a Amex card could double the manufacturers warranty.

On a TV, I did pay $130 for 4 years on a $1100 tv, but had the price lowered and used some of that towards the extension. I won't get into cars though thats something for a car forum.

 

If i estimate my total cruise cost (hotels, etc.. everything, at $1,600- the $139 I am comfortable with. For $300, I would be looking at a third party if it was a higher cost.)

 

Even if credit cards didn't offer free LDW coverage, the LDW would still be a horrible, horrible deal for the reasons I mentioned.

 

But I think you agree with that anyway, from what you wrote.

 

What I don't understand is why you are buying other terrible value warranties which insure you against a relatively small loss.

 

Electronics extended warranties are horrendous for two reasons:

 

1) They are a terrible value in the first place

2) Electronics QUICKLY degrade in value due to changes in technology. So by the time the "extended" warranty kicks in, your computer or TV has dropped substantially in value, even if in brand new condition! (And it's not in brand new condition, so you are extending a warranty on a years-used piece of semi-obsolete electronics! Ouch!)

 

Unfortunately people look at it from the point of view of, "I just spent $1600 on this TV, and I don't want to have wasted that if something goes wrong right after the warranty is over", not realizing that the TV itself at the end of the warranty is worth a fraction of that $1600, even in complete working condition!

 

Anyway, trip insurance falls in the same "one and done" category as the dreaded LDW rental car insurance. The medical portion at least makes sense by a "catastrophic cost if needed" standpoint, but the rest of it is spending a little money (at TERRIBLE value) to potentially save yourself a relatively small amount (i.e. not life-changing money).

 

Simply put, the average consumer should be begrudgingly okay with spending a small amount at poor value to insure against a fluke $100,000+ cost.

 

The average consumer should NOT be spending a small amount at poor value to insure against a $4,000 cost, unless $4,000 is life-changing money to them.

 

The fact that many people in this thread don't understand this is mind-boggling.

[DipBrat]

So why did I ask what everyone's "breaking point" was regarding insurance prices?

 

I asked because most of the answers I got to my previous question were quite poor.

 

My initial question was, "Why does anyone buy travel insurance unless you're old, in poor health (or have a relative in poor health), or on a tight budget?"

 

I reasoned that it was foolish to buy trip insurance unless you were in one of the above categories. My reason was based upon the fact that the cost was very high compared to what coverage you were receiving.

 

Most of the answers I received were of the following variety:

 

- I am buying it for peace of mind

 

- I bought it (no reason given) and I had to file a big claim later on, so I made the right decision (aka results-oriented thinking)

 

- It's paying a small amount of money to protect a larger investment

 

- Foreign medical expenses and evac expenses are so high that I have to protect my savings

 

 

All of the above answers, while appearing reasonable on the surface, would also be valid if the insurance were to cost double or triple of what it currently does.

 

It would still give you peace of mind. It would still protect you from high foreign medical costs. It would still be a relatively small investment to protect a larger investment.

 

We even had someone in the thread who laughably said they would pay quadruple (!!) for their same trip insurance coverage.

 

But that aside, I put that question forward because insurance rates that were double would change nothing except for your value. You would have the same coverage, but would just be paying double for it.

 

So why would some of you find that unacceptable? Why would some of you refuse to buy it at that point?

 

Because you would deem it to be of such poor value that it wasn't worth buying, even if it were protecting you somewhat from financial hits due to misfortune.

 

And that was my point in the first place. Trip insurance is already of very poor value. It doesn't need to double in rates to get there.

 

Yes, there are some cheaper trip insurance firms, and those have been posted in this thread. (See? Something good actually came of this whole thing. I really wasn't trolling!)

 

But even the better value trip insurance companies are still offering poor value. As was already explained here, the trip insurance industry's main costs were commission and overhead, NOT claims! That's bad news for the consumer. It means that a very small percentage of overall premiums end up back in the pockets of the insured -- which means you're getting terrible value.

 

Many other forms of insurance have a much higher rate of return to the average insured. This includes auto, health, and home. Life insurance is a mixed bag when it comes to value, but you can do fairly well if you shop around properly.

 

The worst-value insurance for the consumer tends to be the "one and done" policies -- where you are insuring a single event. This is because such insurance can be sold for a deceptively low price, as the insurance company's exposure is relatively small.

 

A good example of horrible value (but often-purchased) insurance is the LDW (loss damage waiver) at rental car companies. It appears on the surface to be a great bargain. For just $9/day (sometimes more), you can protect yourself against having to pay for any damage to the car, regardless of fault! Wow!! Just $9 per day to insure a car worth $20k or more? Sign me up! But do the math and reality sets in. Multiply by 365, and you're paying $3286 per year for ONLY COLLISION COVERAGE on a vehicle that isn't worth very much. That's a markup of about a factor of 8. Car rental companies now also sell daily liability insurance, as well, and make even more money from suckers. You actually have fools paying as much as $30/day for supplemental rental car insurance!

 

(Funny aside - About 15 years ago I was dating a girl who worked for Enterprise, and she stopped seeing me after we argued about whether or not the LDW was a good value!)

 

So while most of you believe it's "reasonable" to pay 5-7% of your trip value for trip insurance, yet it would be unreasonable to pay 10-14%, keep in mind that 5-7% left "reasonable" territory a long time ago.

 

I will say that I did learn one thing from this thread, which I will be examining next time I travel to a non-Canada foreign country. That's foreign medical insurance. I think that might actually be a valuable thing to have, even if also a poor value, simply because of the catastrophic financial consequences that can occur from not having it and running into some awful luck.

 

However, for most of you insuring the cost of your trip itself.... all I can say is that you're being taken for a ride and probably don't realize it.

 

This is a very good and logical post. Personally I never buy cancellation although I do have evacuation and medical insurance through my employer. I travel a lot and I am easily at the point where I have saved an entire price of a trip. So basically my first cancellation will be free and I am also earning interest on this money.

[The Mister]

Yes, there are some cheaper trip insurance firms, and those have been posted in this thread. (See? Something good actually came of this whole thing. I really wasn't trolling!)

Actually, that information has been stated multiple hundreds of times in previous threads on CC such that it's pretty much common knowledge for the majority of cruisers. But thanks anyway.

[HowardK]

Insurance companies are in the business of making profit -- usually a big profit.

 

So you are paying far more than what the benefits they provide are actually worth.

 

Now if you have to use it, of course you come out better than if you hadn't had insurance, but the value is very poor.

 

In my opinion, insurance should only be used to prevent a catastrophic loss, such as:

 

- Insuring against your home burning down or otherwise getting destroyed

- Insuring against your car being wrecked

- Insuring against you injuring someone else while driving and being liable for their medical care

- Insuring against major illnesses or injuries costing you hundreds of thousands or millions of dollars

 

These are losses that would devastate your finances and therefore insurance is smart, even if not the best value.

 

However, I see people doing things like buying dental insurance for $500/year when it has a maximum benefit of $1100. And I'm like, "What?!?!?!?"

 

Or buying an extended warranty for $12 on an item that costs $60.

 

The bottom line is that, if you can afford to eat the cost of the unlikely loss without a real effect on your finances/lifestyle, it is to your benefit to just take the chance.

 

The only exception is when you know there is a high chance something is coming.

 

For example, I won't fault the guy who is highly cavity-prone from buying dental insurance.

 

I won't fault the traveler in poor health for buying trip insurance.

 

I won't fault the guy whose mother is on her last legs buying trip insurance, knowing realistically that she could go at any time, and thus cancel the trip plans.

 

I think a lot of people aren't doing to proper research about what your regular medical plans would really cover in the case of an emergency. It might be a lot more than you think. I also think that some trip insurance purchasers are ignoring high deductibles, spotty coverage, or other loopholes that will only rear their ugly heads when it comes to using it.

 

I personally think it's a waste of money.

 

You don't need insurance for everything you do in life.

 

 

True, insurance companies are in business to make money; I work for a company that offers insurance in one of their areas. However, cruise ships and casinos are also in business to make money.

 

I think it is a case by case basis, although I found it worth to negotiate the TV down $100 to cover most of the 4 year warranty; I skipped it on my Kindle.

 

What really bothers me though are the port fees. How are they computed?

While I don't mind paying for cruise insurance, I would like to know why the port fees are passed on to the consumer? Maybe that is OT and for another thread, but I typically add on $325-$350 of my base price to account for the DSC/Port Fees/ and Insurance.

[graphicguy]

You can say this about a lot of things. Insurance isn't worth it until you need. it. Butter isn't worth it if you churn your own. A car is too expensive so one can gather the parts and make their own. You can go on and on.

 

Unless you want to park $250,000-$500,000 in a bank, in some foreign nation, to cover you if you have an accident or get ill while in that nation, insurance makes a worthwhile alternative investment.

[pokerpro5]

True, insurance companies are in business to make money; I work for a company that offers insurance in one of their areas. However, cruise ships and casinos are also in business to make money.

 

I think it is a case by case basis, although I found it worth to negotiate the TV down $100 to cover most of the 4 year warranty; I skipped it on my Kindle.

 

What really bothers me though are the port fees. How are they computed?

While I don't mind paying for cruise insurance, I would like to know why the port fees are passed on to the consumer? Maybe that is OT and for another thread, but I typically add on $325-$350 of my base price to account for the DSC/Port Fees/ and Insurance.

 

Port fees are computed by the government, and basically just a way to stick it to the tourist in one additional way. They vary based upon the localities being visited. They are around $200 when you visit Alaska by cruise! Yuck! At least those aren't the fault of the cruise line.

 

The more obnoxious charge is the NCF. You don't see the NCF if you buy from Norwegian normally, but it's there. That stands for "non-commissioned fare", and is a portion of the fare which doesn't pay travel agents commission. It is constant across all stateroom categories, and does not rise and fall. It does vary by itinerary, for reasons I don't understand. It is usually fairly close to the port taxes.

 

Why should this bother you if you're not a travel agent? First off, it degrades the ability of travel agents to give you additional perks, as they make less money overall. Second, when you get a "free" cruise through a casino or other promotion, typically it does NOT include the NCF, so you are forced to pay that plus taxes. For example, a "free" cruise to Alaska still costs a minimum of $880 for two cruisers!

Edited July 25, 2014 by pokerpro5

[pokerpro5]

You can say this about a lot of things. Insurance isn't worth it until you need. it. Butter isn't worth it if you churn your own. A car is too expensive so one can gather the parts and make their own. You can go on and on.

 

Unless you want to park $250,000-$500,000 in a bank, in some foreign nation, to cover you if you have an accident or get ill while in that nation, insurance makes a worthwhile alternative investment.

 

"Insurance isn't worth it until you need it" is garbage talk from agents who try to scare you into buying all kinds of coverage you don't need. Every time I try to renew my auto insurance, I get this obnoxious speech from my agent about all other kinds of insurance I need. I cut her off and tell her I just want to renew my auto, and to drop the sales speech.

 

There are sensible types of insurance to buy, and there are stupid types of insurance to buy. You can't just make a blanket statement like, "It's always good to have insurance" or "Once you need it you'll be glad you have it", because that's the type of thinking which robs consumers of so much value.

 

When buying insurance, you need to assess:

 

- What value am I getting out of this policy?

 

- In the worst case scenario, what will happen? Will I simply find myself annoyed that I lost money, or will it change my life?

 

- Am I buying so much insurance that simply cutting down on premiums would allow me to save more than enough money to cover many small or medium unexpected events?

 

- Is my coverage going to actually help me, or is it full of restrictions? Do I understand the restrictions on the coverage I'm buying?

 

- Did I do my best to purchase the lowest cost insurance for what I need, or did I just jump at the first sales spiel from a high-pressure salesman?

Edited July 25, 2014 by pokerpro5