Cruise Crisis
by Rudy Maxa for Marketplace

Last week, 2,800 passengers aboard four luxury ships operated by Premier Cruise Lines of Port Carnival, Florida, were booted off their ships in mid-vacation when the company suspended operations. Turns out Premier was broke. Our Savvy Traveler, Rudy Maxa, tells you what you can do to protect yourself from a similar fate.

The odds are slim that any of the six million or so American and Canadian cruise passengers this year will be on board a ship seized by creditors. But just try telling that to the unfortunate passengers whose vacations were ruined last week. You may not remember Regency Cruises, but the passengers were kicked off that company's ships for the same reason several years ago.

As the big winter cruise season begins, how do you protect yourself from the unexpected when planning a cruise? There's a one-word answer: Insurance. But the trick is to shop carefully. Most cruise lines, like tour operators, will sell you trip insurance when you book your travel. If you get sick before a cruise or if there's death in your immediate family, you won't forfeit your deposit or payment. Your insurance will cover that. If your flight gets delayed and you miss your ship's departure, your insurance will pay for a flight to get you on board. You may also be reimbursed if your luggage is lost.

But Sue Shapiro of GIANTS, a co-operative of 2,000 North American travel agencies, says you should buy your insurance from a third party, not your cruise or tour company, so that you'll be covered if the company runs into financial trouble. In other words, even if the passengers aboard Premier's ships had purchased trip insurance from Premier, it wouldn't cover the money they lost when their vacations were cut short. However, if they had insurance from a third-part insurer, two of the larger are Access America and Travel Guard, they're due a refund. Most people buy cruises from travel agents, and Sue Shapiro says some agents aren't happy about bringing up the prospect of disaster when someone is booking a dream vacation. But, says Shapiro, whoever thought Pan Am or Eastern would go out of business? Sometimes bad things happen to good people.

Patti Edwards, a senior agent at Cruise Holidays, a big cruise agency in Kansas City, Missouri, told me she feels so strongly about third-party insurance that she asks her clients to decline it with a signature, so she can't be accused of failing to offer it. Generally, about half of all cruisers buy insurance, though it adds about ten percent to the cost of a cruise.

Also, make sure your policy covers pre-existing medical conditions. That way, for example, if you have a heart condition when you buy your trip insurance, you'll get your money back if you have a heart problem before or during your trip. Beth Godlin, a vice president at Access America, a third-party insurer, says her company's policies generally will cover pre-existing medical problems if a passenger buys insurance within seven days of purchasing a cruise.

And buy a cruise from a travel agent that knows cruises. Patti Edwards at Cruise Holidays says she's been steering clients away from Premier for a while because she was concerned about the company's ability to stay in business. Always pay for your cruise, or any travel arrangements, with a credit card. Then, if things go bad, it's the credit card company's problem and you won't be up the creek without a paddle.

I'm Rudy Maxa, The Savvy Traveler, for Marketplace.

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