As the world is becoming an increasingly uncertain place, your personal health care plan may not cover you abroad and credit card provided travel insurance can be hit and miss depending on the card. Even the good credit card insurance, such as that from the Chase Sapphire Preferred® Card, won’t cover you if your financial circumstances change (i.e., you lose your job). With those factors in mind, it’s very often now that the answer is: Yes, you should insure your cruise.

The purpose of travel insurance is to cover the nonrefundable costs associated with your trip in case of an unforeseen event. Odds are that you won’t use your travel policy, but you need to have it, just in case, unless you are willing to risk thousands of dollars on your nonrefundable cruise reservation. However, that doesn’t mean that you should go into the decision uninformed.

The do's and don’ts of insuring your cruise

One of the reasons that many people skip travel insurance is because it can get complicated, so here are some tips that will help as you try to decide what insurance is right for you.

Do know what’s covered

Is a job loss covered? How about a death in the family? Be sure to read the terms and conditions of the policy, particularly the schedule of benefits and coverage details, which serve as a summary.

For example, is a COVID-19 related issue covered? The answer depends on when you bought your policy, since pandemics and epidemics are often specifically excluded. So if you bought the policy after your insurance company declared COVID-19 to be a pandemic, you may not be covered for COVID-19-related reasons. There are also several companies now including COVID-19 related illnesses as covered reasons but fear of traveling doesn’t qualify.

Bottom line: Know what is covered and what isn’t.

Don’t automatically buy coverage from your cruise line

Your travel insurance may end up costing up to 4%-8% of the cost of your trip, so it's a good idea to comparison shop to make sure that you are getting the best deal. You could also check with your travel agent or an independent site, such as SquareMouth (a NerdWallet partner) or InsureMyTrip, which compares policies from several providers.

A little bit of research can frequently get you better benefits for less money. And finally, make sure that your cruise insurance is “primary” coverage, which picks up the cost before forcing you to go through your homeowners policy.

Do consider whether you want a standard or Cancel For Any Reason (CFAR) policy

A standard policy has good protection and comes with a list of restrictions on what’s covered. If you want to make sure that you are covered for any reason, whether that’s a pandemic or a last-minute change in plans, look into a “cancel for any reason” add-on to your policy. A CFAR policy is just what the name sounds like. You can cancel your trip for any reason you want and are restricted only by the timing of your cancellation notice (usually two days prior to your trip, but check your policy as terms vary).

CFAR insurance isn’t free though, and comes with a few conditions. First, it can cost 40%-50% more than a standard policy, and it generally won’t cover 100% of your uncovered costs. You’ll find that 50%-75% of coverage is more common.

It’s also important to note that you cannot simply buy CFAR by itself. You must buy a travel insurance policy that is eligible for a CFAR add-on. Many insurance sites will include a CFAR filter in their search tool. You'll also need to buy the policy within a certain time frame after purchasing your cruise, which will vary based on the insurance company.

Don’t wait to buy your insurance

You may be able to get complimentary “bonus” benefits, but it usually means buying your policy shortly after booking your cruise. For example, Travelex will cover you for a pre-existing condition (yours or an immediate family member’s), but only if you purchase the insurance within 15 days of making your initial trip payment. That limit applies to purchasing CFAR, as well. After the 15-day period, you can purchase only standard insurance. These restrictions are common and you should ask about them when looking to book a trip and are considering travel insurance.

Not sure which travel insurance plan you want? Don’t worry, you’re covered. Most plans will give you a “free look” period. With Travelex, that’s 15 days, while InsureMyTrip notes that many of its partners give you 10 to 14 days.

The bottom line

A cruise is too expensive of a purchase not to insure. Before you buy it though, make sure that you know what you are looking for. A travel agent can be an excellent place to start, but you can also do much of the research on your own.