Cruise could run aground in a sea of risks

travel q&a trip insurance

December 14, 2008|By Los Angeles Times

We have made a reservation on a Norwegian fiord/Baltic cruise next summer through my alma mater. It is on a small cruise line, and I am worried about the possibility of financial default. Because of our age, the insurance premium quoted for this trip is about 20 percent of the cost of the trip. Also, the tour operator's brochure specifies that it does not accept credit cards for the final payment. What options do we have to protect ourselves?

Danger, Will Robinson! Danger! Each trip we embark on is fraught with a list of things that can go wrong, but your trip is a veritable encyclopedia of potential problems.

You are right to be concerned about travel-provider defaults; this year alone, we've seen the demise of GrandLuxe Travel and ATA and Aloha airlines, among others. If travelers who booked with those companies paid by credit card, they were, for the most part, covered.

But your final payment can't be made by credit card, according to the terms of the agreement.

And you might not be able to get insurance to cover financial default of a travel provider anyway, especially if it has been more than 15 or 21 days (depending on the provider) from his first payment.

And because you're not protected by the California Seller of Travel Law (because the seller isn't in California), the deck appears to be stacked against you.

"In the absence of these backup measures, the best that a consumer can do is acknowledge the risk and make an informed choice in regard to whether to do business with the vendor," Lori J. Forcucci, a California deputy attorney general in the Consumer Rights Section, wrote in an e-mail.

The part of this dilemma that shocked most was the "no credit card" edict. The provider, Thomas Gohagan & Co. of Chicago, said this was done to keep travel costs low because alumni travel is highly competitive, but this trip is so expensive that charging the traveler 3 percent for the credit-card protection seems like a whisper of an increase.

If the cancellation penalties aren't too severe, your best bet might be to cancel the trip, then turn around and rebook it - with insurance that includes financial default (that's not automatic, so check) and with a policy that might be considerably less expensive than the quote you received. Look at sites such as insuremytrip.com, squaremouth.com and quotewright.com

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