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How cruise firms pass the buck to insurers that won't pay out

Travellers who are forced to cancel a cruise could be left all at sea if their insurance won't pay out
Travellers who are forced to cancel a cruise could be left all at sea if their insurance won't pay out Credit: adam eastland / Alamy Stock Photo 

Cruise passengers forced to cancel because of Government travel restrictions or serious illness could find themselves saddled with hefty bills that will not be covered by travel insurance.

Just three in 10 travel insurance policies will pay out if a customer chooses to cancel their cruise because of changes to Government travel advice, while 30pc won’t cover passengers who are compulsory quarantined, according to research by Defaqto, a ratings service.

Cruise companies typically refuse to refund cancellations, meaning a passenger could end up paying the full price of a holiday they don’t go on.

Most firms advise travellers to purchase insurance covering cruises, but Brian Brown, of Defaqto, warned holidaymakers not to assume they would be covered.

For example, someone who had booked a cruise to Sri Lanka but chose to cancel after the recent terrorist attacks led the British Government to advise against all but essential travel would not be covered by just under 70pc of policies.

Mr Brown also pointed out that there are very different levels of cover with 12pc of policies not covering cruises at all.

“Travellers intending to go on a cruise need to check very carefully that theirs is not one of the policies that don't cover cruises at all, or where cruise cover is optional and they haven't selected it,” he said.

“Most travellers should buy travel insurance from the point at which they book their holidays to ensure they are covered in the event they need to cancel before travelling.  

"They should also make sure they disclose any medical history the insurer asks about. Failing to do so could well lead to the insurer refusing medical claims.”

Martyn James, of Resolver, a complaints service, said cruise firms should not be passing the buck on cancellations to insurers.

“The insurance industry is there to protect you from incidents like this happening but that shouldn’t absolve the [cruise] companies from their own responsibilities,” he said.

Malcolm Tarling, of the Association of British Insurers, said travel insurance would pay out for many non-refundable expenses incurred by cancellations but that refunds would have to be sought elsewhere before claiming.

“You must exhaust all other means first,” he explained. “Where there are legal obligations on travel providers then they should be meeting those. The primary purpose of travel insurance isn’t to cover these risks it is to cover emergency medical expenses and that is what the policies are priced for.

“It can look like buck-passing from one industry to the other with the poor punter stuck in the middle – but if they have tried all other means then the insurer will deal with the claim.”

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