Carrier default coverage

[wishIweretravelling]

I am booked on the Crystal 2022 world cruise. There is some concern as to whether the cruise line will go bankrupt, given that its parent company has defaulted on debts.  

I paid an initial deposit on booking and then another required deposit later. With the first deposit, I purchased trip insurance for that amount, and then more insurance with the second deposit. The insurance includes coverage for carrier default for "required payments."  

 

I have three questions:

 

1. In August 2021, when I must make the required final payment for the cruise,  can the insurer refuse to cover things that were not reasonably foreseeable at the time I took out the policy initially (such as Covid or carrier default) but might in August be considered foreseeable? 

 

2. If the insurer can exclude such things from coverage, what are my options?

 

3. The cruise line offers a discount if you pay in full in May instead of August. If I take them up on this, could the insurer refuse coverage because the payment is not "required"?

 

[iamtrustworthy]

22 hours ago, wishIweretravelling said:

I am booked on the Crystal 2022 world cruise. There is some concern as to whether the cruise line will go bankrupt, given that its parent company has defaulted on debts.  

I paid an initial deposit on booking and then another required deposit later. With the first deposit, I purchased trip insurance for that amount, and then more insurance with the second deposit. The insurance includes coverage for carrier default for "required payments."  

 

I have three questions:

 

1. In August 2021, when I must make the required final payment for the cruise,  can the insurer refuse to cover things that were not reasonably foreseeable at the time I took out the policy initially (such as Covid or carrier default) but might in August be considered foreseeable? 

 

2. If the insurer can exclude such things from coverage, what are my options?

 

3. The cruise line offers a discount if you pay in full in May instead of August. If I take them up on this, could the insurer refuse coverage because the payment is not "required"?

 

Hi wishIweretravelling,

 

Which exact trip insurance policy did you buy? Who did you buy it from? And, if you have a link to see its coverages online, will you give that to me?

 

Steve Dasseos

[wishIweretravelling]

It's a Travel Guard Silver. 

 

Edited January 2, 2021 by Host Kat
Per author's request.

[iamtrustworthy]

3 hours ago, wishIweretravelling said:

It's a Travel Guard Silver.

 

Hi wishIweretraveling,

 

Your Travel Guard Silver plan covers Financial Default when the insurance plan is purchased within 15 days of Initial Trip Payment:

 

Item b under Trip Cancellation and Interruption:

Financial Default of an airline, Cruise line or tour operator provided the Financial Default occurs more than 14 days following an Insured's effective date for the Trip Cancellation or Trip Interruption Benefits. There is no coverage for the Financial Default of any person, organization, agency, or firm from whom the Insured purchased travel arrangements supplied by others. This coverage applies only if insurance was purchased within 15 days of Initial Trip Payment;

 

“Financial Default” means the total cessation or partial suspension of operations due to insolvency, with or without the filing of a bankruptcy petition by a tour operator, cruise line or airline.

 

Steve Dasseos

 

 

[wishIweretravelling]

Thank you. I understand all of that. I did purchase within 15 days of initial payment. I am just trying to make sure that, as I make additional payments on the cruise and thus additional payments to cover that on my insurance, will the insurance continue to cover things that might at those later dates be considered foreseeable. And, if I make the early payment to get the discount, will that payment be considered a required payment and thus coverable.

[iamtrustworthy]

On 1/2/2021 at 1:28 PM, wishIweretravelling said:

Thank you. I understand all of that. I did purchase within 15 days of initial payment. I am just trying to make sure that, as I make additional payments on the cruise and thus additional payments to cover that on my insurance, will the insurance continue to cover things that might at those later dates be considered foreseeable. And, if I make the early payment to get the discount, will that payment be considered a required payment and thus coverable.

You will need to increase your policy's coverage within 14 days of any payment of any kind on your trip. Travel Guard says 15 days but it's really 14 calendar days after you pay the money and not 15 days.

 

You don't want your travel agent to forget to make the increase, so use this form if you want to be sure it's done correctly:

https://buy.travelguard.com/tgi2/policytools/modifypolicy.aspx?br=tgdirect
 

The date you fill out the form counts as date of the trip cost increase even if Travel Guard doesn't process it right away.

 

Steve Dasseos

Edited January 4, 2021 by iamtrustworthy

[ipeeinthepool]

Steve,

 

If I understand this thread correctly, the OP made a deposit on a cruise and is now making additional payments as the time for the cruise is approaching and was increasing insurance coverage along the way.  For example let's say the cruise cost $7,000 and the OP made a deposit of $1,000 last year and will make the final payment next month,  are you saying the OP only has to insure $1,000 last December and should increase it to the full $7,000 within 14 days of final payment?  I always assumed that I needed to insure the entire amount at the time of initial purchase because I knew the complete cost of the cruise.

[wishIweretravelling]

4 hours ago, ipeeinthepool said:

Steve,

 

If I understand this thread correctly, the OP made a deposit on a cruise and is now making additional payments as the time for the cruise is approaching and was increasing insurance coverage along the way.  For example let's say the cruise cost $7,000 and the OP made a deposit of $1,000 last year and will make the final payment next month,  are you saying the OP only has to insure $1,000 last December and should increase it to the full $7,000 within 14 days of final payment?  I always assumed that I needed to insure the entire amount at the time of initial purchase because I knew the complete cost of the cruise.

Some policies require that. Many don't. For some, you don't need to buy insurance until final payment .  For a world cruise, you need to put down a pretty hefty deposit, and only a couple of insurers will even touch insuring a cruise of that length and expense. The one I have requires only that I insure the amount currently at risk. So, I pay as I go along.

 

On insurance, don't just assume. Look at the policies. 

[iamtrustworthy]

5 hours ago, ipeeinthepool said:

Steve,

 

If I understand this thread correctly, the OP made a deposit on a cruise and is now making additional payments as the time for the cruise is approaching and was increasing insurance coverage along the way.  For example let's say the cruise cost $7,000 and the OP made a deposit of $1,000 last year and will make the final payment next month,  are you saying the OP only has to insure $1,000 last December and should increase it to the full $7,000 within 14 days of final payment?  I always assumed that I needed to insure the entire amount at the time of initial purchase because I knew the complete cost of the cruise.

I can't say if all companies let you do this, but here's how I explain the "pay as you go":

 

When your trip is farther in the future and you are paying it in stages, an option to consider is this:

 

You would not have to pay for the insurance in full immediately upon purchase in order to get the pre-existing conditions coverage. All our plans allow "pay as you go" which means you must insure your deposit now and as you prepay more trip costs, you must increase the insurance coverage any time (as long as nothing has happened where you would file a claim) before but not later than 14 days of adding any additional trip costs above what has been insured to keep the pre-existing conditions coverage. This does not result in any extra costs, just the incremental price increases. You do have to insure the deposits even if they are refundable. The prices are locked in at your ages and the rates that were in effect when you bought it.

 

The key to making "pay as you go" work is you being organized and letting us know when you increase your trip's cost.

 

Except for one company, you may not use "pay as you go" with a "Cancel for Any Reason" plan.

 

Steve Dasseos

[sparks1093]

3 hours ago, iamtrustworthy said:

I can't say if all companies let you do this, but here's how I explain the "pay as you go":

 

When your trip is farther in the future and you are paying it in stages, an option to consider is this:

 

You would not have to pay for the insurance in full immediately upon purchase in order to get the pre-existing conditions coverage. All our plans allow "pay as you go" which means you must insure your deposit now and as you prepay more trip costs, you must increase the insurance coverage any time (as long as nothing has happened where you would file a claim) before but not later than 14 days of adding any additional trip costs above what has been insured to keep the pre-existing conditions coverage. This does not result in any extra costs, just the incremental price increases. You do have to insure the deposits even if they are refundable. The prices are locked in at your ages and the rates that were in effect when you bought it.

 

The key to making "pay as you go" work is you being organized and letting us know when you increase your trip's cost.

 

Except for one company, you may not use "pay as you go" with a "Cancel for Any Reason" plan.

 

Steve Dasseos

This is very informative and I was not aware that it was an option. 

[Bgwest]

8 hours ago, sparks1093 said:

This is very informative and I was not aware that it was an option. 

Steve turned us on to this approach some time back and this is how we've handled travel insurance on all of our trips since then. Cruises as well as land trips. 

 

Steve is an incredible asset to anyone who travels. Thanks, Steve!!

[Jersey42]

Hey @iamtrustworthy.  This may or may not have been exactly the original poster's question, but with several posts discussing the "pay as you go" approach, can you comment on the following scenario.

 

I purchase a policy today and insure all of my current pre paid non refundable costs. Then, at future date(s), I increase my coverage as I make more non refundable payment(s).

• When I "increase my coverage", am I just adding coverage to the policy I took out today under the terms and conditions of my existing policy?  Or, do the terms and conditions at the time I "increase my coverage" apply?
• Any difference to the answer if the T&C did not change, but "foreseeable events" changed.  For example, when I buy the policy, my carrier is financially healthy, but at the time I increase my coverage, the carrier is getting closer to bankruptcy.

I don't think anyone would have ever thought about these highly unlikely scenarios a year ago, but the world has changed.

 

Thanks for all of your help.

[iamtrustworthy]

12 hours ago, Jersey42 said:

Hey @iamtrustworthy.  This may or may not have been exactly the original poster's question, but with several posts discussing the "pay as you go" approach, can you comment on the following scenario.

 

I purchase a policy today and insure all of my current pre paid non refundable costs. Then, at future date(s), I increase my coverage as I make more non refundable payment(s).

• When I "increase my coverage", am I just adding coverage to the policy I took out today under the terms and conditions of my existing policy?  Or, do the terms and conditions at the time I "increase my coverage" apply?
• Any difference to the answer if the T&C did not change, but "foreseeable events" changed.  For example, when I buy the policy, my carrier is financially healthy, but at the time I increase my coverage, the carrier is getting closer to bankruptcy.

I don't think anyone would have ever thought about these highly unlikely scenarios a year ago, but the world has changed.

 

Thanks for all of your help.

Hi Jersey42,

 

You're welcome.

 

> When I "increase my coverage", am I just adding coverage to the policy I took out today under the terms and conditions of my existing policy?  Or, do the terms and conditions at the time I "increase my coverage" apply?

 

You are just adding coverage to the same policy you bought so no matter what changes took place with that policy after you bought it won't affect you. And, when a company changes the wording they assign a new T & C serial number to it along with the date the new policy is created.

> Any difference to the answer if the T&C did not change, but "foreseeable events" changed.  For example, when I buy the policy, my carrier is financially healthy, but at the time I increase my coverage, the carrier is getting closer to bankruptcy.

 

The circumstances that existed at the time of purchase are "set in stone". Anything that happens in the future is an unexpected event and doesn't count against you.

 

This includes changes to your health. You could be healthy with no known medical conditions when you buy the insurance and days, weeks, months later you find out you have a terrible disease that will potentially impact your trip. You will be covered according to the terms of the policy because what happens to you in the future is unforeseen now.

 

I hope this makes sense.

 

Steve Dasseos