To most holidaymakers, travel insurance is travel insurance. Let’s face it, insurance is hardly the most exciting part of booking a trip abroad anyway, and for most people, the less time spent thinking about it, the better.
But that does not mean that, as insurers, we should not be proactive about helping customers make the right choices when it comes to their travel cover. The ordinary person in the street might not understand the ins and outs of one policy to the next, but we do. It should be a part of our commitment to outstanding service that we ensure every traveller gets the right policy for their needs.
Let’s take bespoke
cruise travel insurance policies as an example. While the popularity of cruises worldwide has enjoyed
steady and significant growth, it is still considered something of a niche market within the travel insurance industry. Plenty of providers do offer cruise policies, especially as add-ons to other policies, but a lack of awareness among the public suggests more could be done to promote them.
What consumers need to know
More and more people understand that if they go, for example, on a skiing holiday, they will need bespoke cover for the additional injury risks. This is down to a lot of good work from the industry marketing winter holiday products effectively.
Cruise insurance requires the same approach. While there is not the same obvious link to injury as skiing, people should be made aware of the special medical contingencies that apply when out on the ocean. If you are on a ship and fall ill or suffer injury, consultation with the on-board doctor is very expensive.
If the condition is serious enough to require transfer to land, the costs of the ship having to divert to port, or even being evacuated by air, can be astronomical. General travel insurance policies are not designed to take account of such costs.
Cruises are also by their nature complex logistical exercises. Multiple landings and stopovers create multiple opportunities for something to go wrong, such as losing luggage. Again, general policies are not written with so many variables in mind.
Then there are specific cancellation or curtailment risks, where for one reason or another a cruise might have to redirect or be cut short altogether. Ordinary travel insurance would not cover you for a lost booking in a certain destination because the itinerary changed.
What can insurers do?
Many cruise passengers still assume that general travel insurance policies will cover them.
According to Defaqto, this is only true in about half of cases - and only then if the customer states they going on a cruise, and is prepared to pay a premium. The proportion of annual multi-trip policies which provide cruise cover is much lower, worrying when you consider the number of people who rely on annual policies they get as add-ons from their bank account, credit card or other insurance products.
The easiest thing brokers and providers can do is ask customers the type of holiday they are going on. This creates an opportunity to explain the special requirements and guide customers to a specific cruise product.
While it is understandable that cruise insurance should cost a little more than general policies to cover the potential higher liabilities, insurers can mitigate this by waiving excesses or offering added-value extras like confinement cover - paying out on missed excursions if a passenger falls ill and cannot leave their cabin.
The biggest concern is the reliance on annual multi-trip policies which offer very little protection for cruise passengers. Underwriters should be much more proactive in ensuring that the organisations which offer these policies as added-value incentives make clear that they do not provide cover for cruises.
