Mona booked a cruise with Palm Tree Cruises that was due to depart in October 2022. Two weeks before Mona’s cruise was due to depart, Palm Tree Cruises told Mona that her cruise was cancelled due to administrative challenges. Mona’s travel agent told her that Palm Tree Cruises would not refund the cost of her tickets.
Mona made a claim under her travel insurance policy for the cost of her tickets. The insurer declined Mona’s claim because the policy excluded cover where Mona’s loss was caused by the financial default of a cruise provider.
Mona complained to FSCL.
Dispute
Mona disagreed with the insurer’s decision. Mona had received information from another passenger that showed that Palm Tree Cruises had cancelled a July 2022 cruise due to a crew strike. Mona said that it was likely that her cruise was cancelled because Palm Tree Cruises’ crew were on strike.
The insurer said that the cancellation of an earlier cruise was not relevant to Mona’s insurance claim. The insurer said that there was nothing in Palm Tree Cruises’ cancellation email to Mona to suggest that a crew strike was responsible for the cancellation.
Review
We reviewed Palm Tree Cruises’ cancellation email to Mona. There was no reference to a crew strike in the email, whereas the information Mona received about the earlier July 2022 cruise specified that it was cancelled due to a crew strike.
We agreed with the insurer that it was more likely than not that Mona’s cruise had been cancelled due to Palm Tree Cruises’ financial default. Palm Tree Cruises’ only ship had been seized due to the company’s financial default just days before Mona’s cruise was cancelled.
Resolution
We explained to Mona that because it was more likely than not that her cruise had been cancelled due to Palm Tree Cruises’ financial default, the insurer was entitled to decline her claim. We decided that Mona should discontinue her complaint.
Insights for consumers
It is important to read your insurance policy thoroughly and understand what is covered. Any claim you make is subject to the terms of your policy. The insurance policy wording sets out what risk the insurer is prepared to cover.
Travel insurers do not usually cover loss caused by the financial collapse of a travel provider, such as a cruise company.
