General Information

Financial Default Coverage and Cruise West

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Many travel insurance plans cover financial default of a travel supplier.  This applies to trip cancellation and trip interruption if travel plans are affected because a travel supplier becomes financially insolvent and cannot provide service.  It is common for this coverage to only be available if the policy is purchased within a set time from the trip deposit date, normally 14 days.    In some cases, this coverage is not available until after a waiting period, again, normally about 14 days.

Recently, Cruise West announced they will cease operations.  Almost all of their cruises have been cancelled.  Travel Guard provided an explanation of travel insurance benefits as it relates to Cruise West.  The following is the explanation from Travel Guard.

On September 17, 2010, Cruise West announced that they would be ceasing operations effective September 18, 2010. Many of Travel Guard’s standard retail travel insurance plans include Trip Cancellation and Trip Interruption coverage as a result of financial default.

For trip cancellation, trip interruption and/or trip delay coverage to apply, the following conditions must have been met:

· Insured must have purchased a plan that includes coverage due to financial default, and

· Insured must have purchased the plan within 15 days of making their initial trip deposit, and,

· The financial default must have occurred more than 14 days following the effective date of coverage:

o   This means that for sailings scheduled to depart on or after September 18, which failed to depart, coverage would have to have been purchased prior to September 4, 2010.

o   For sailings that may have been cancelled prior to September 18, 2010, or which had departed but then did not complete their voyage and therefore left passengers stranded, coverage would have had to have been purchased more than 14 days prior to the event.  For example, for coverage to apply for passengers who were not able to depart on the cancelled September 10, 2010 sailing to Newfoundland, coverage would have to have been purchased prior to Aug. 27, 2010.

As illustrated in the scenarios above, coverage is determined by the effective date of the travel insurance plan and that plan’s requirements.

With regard to sailing dates after September 18, 2010 that may still depart, coverage would not apply.

Remember, travel insurance protects travel against unforeseen and uncontrollable circumstances.  Once an event becomes known, such as the financial default of Cruise West, new policies will not cover that event.  Always refer to the certificate of insurance for details.