Trip Insurance When Combining "Real Money" and "Bonus Dollars" FCCs

[Bgwest]

Hi Steve, I'm here with another "down in the weeds" question. 

 

Like last time, let me create a scenario to bounce off of you. 

 

Let's begin by stipulating I have a $9,375 FCC that Princess provided me after cancelling a cruise. Let's go further and stipulate that of this total amount, $7,500 is the part of the FCC that represents my "refund of cash paid" for the cancelled cruise and $1,875 is part that represents the Princess 25% "bonus" associated with "Option 1". Same with the 50% bonus from Pause 1 with only the numbers being different. 

 

Now I'm sitting here with $9375 that I'm ready to apply to a new cruise. Right now! And when I buy the cruise I have in mind, I'm going to contact you and purchase a Travel Insured Worldwide Trip Protector policy. All pretty well straight forward so far, right? Not so fast. Travel Insured's position, and for all I know all of the trip insurers, is that they will NOT insure any "bonus dollars" that I receive.  Here's where it gets complicated. 

 

The $9375 I have in my Captain's Circle account that will go to funding my new trip is a mixture of "real money" and "bonus dollars". Once these monies are mixed, it's impossible to re-separate them. Much like mixing a quart of whole milk with a pint of chocolate milk. The resulting mixture can never be separated into the individual components that went into the mix. Same with the "real money" cruise dollars and the "bonus" cruise dollars. How in the world can the determination be made to insure only "real money" and not "bonus dollars".

 

So, here's where I'm going with all of this. When I purchase this new cruise that, for the sake of this part of the scenario, we'll say cost's exactly $9375, how do we style a TI WTP policy?

 

Now let's complicate it a bit further. Let's say the new cruise that I'm purchasing costs only $4,000 rather than $9,375. Now I'll have FCC left over in my Captain's Circle "bank". How would I then insure the $4,000 cruise? Remember, the "real money" and the "bonus dollars" remain mixed but are now only partially being removed unlike the first example where the entire amount was used to pay for the cruise. 

 

To add another layer of complexity (mind you, all of these scenarios are very much real life possibilities), after I've somehow insured the the $4,000 cruise, I'll have $5,375 left over from the original stipulated $9,375 FCC that Princess has put into my Captain's Circle "bank" (remember that original stipulation?). Now when I use that $5,375 to purchase yet another new new cruise, how in the world am I going to insure that? By this time the "real money" and the "bonus dollars" thoroughly homogenized. 

 

I can certainly understand any insurer being unwilling to insure "bonus dollars". But for the life of me I cannot figure out the mechanics of how they are going to make this happen.

 

All of this follows nearly exactly what I'm looking at doing (only the numbers are different) for several upcoming cruises. This isn't a theoretical exercise. I'm going to be coming to you when it's time to book these cruise using FCCs and I'm bewildered how these cruises will be insured given the position of the insurers.

 

Thanks for letting me ramble in the weeds.

Bill 

 

 

[iamtrustworthy]

18 minutes ago, Bgwest said:

Hi Steve, I'm here with another "down in the weeds" question. 

 

Like last time, let me create a scenario to bounce off of you. 

 

Let's begin by stipulating I have a $9,375 FCC that Princess provided me after cancelling a cruise. Let's go further and stipulate that of this total amount, $7,500 is the part of the FCC that represents my "refund of cash paid" for the cancelled cruise and $1,875 is part that represents the Princess 25% "bonus" associated with "Option 1". Same with the 50% bonus from Pause 1 with only the numbers being different. 

 

Now I'm sitting here with $9375 that I'm ready to apply to a new cruise. Right now! And when I buy the cruise I have in mind, I'm going to contact you and purchase a Travel Insured Worldwide Trip Protector policy. All pretty well straight forward so far, right? Not so fast. Travel Insured's position, and for all I know all of the trip insurers, is that they will NOT insure any "bonus dollars" that I receive.  Here's where it gets complicated. 

 

The $9375 I have in my Captain's Circle account that will go to funding my new trip is a mixture of "real money" and "bonus dollars". Once these monies are mixed, it's impossible to re-separate them. Much like mixing a quart of whole milk with a pint of chocolate milk. The resulting mixture can never be separated into the individual components that went into the mix. Same with the "real money" cruise dollars and the "bonus" cruise dollars. How in the world can the determination be made to insure only "real money" and not "bonus dollars".

 

So, here's where I'm going with all of this. When I purchase this new cruise that, for the sake of this part of the scenario, we'll say cost's exactly $9375, how do we style a TI WTP policy?

 

Now let's complicate it a bit further. Let's say the new cruise that I'm purchasing costs only $4,000 rather than $9,375. Now I'll have FCC left over in my Captain's Circle "bank". How would I then insure the $4,000 cruise? Remember, the "real money" and the "bonus dollars" remain mixed but are now only partially being removed unlike the first example where the entire amount was used to pay for the cruise. 

 

To add another layer of complexity (mind you, all of these scenarios are very much real life possibilities), after I've somehow insured the the $4,000 cruise, I'll have $5,375 left over from the original stipulated $9,375 FCC that Princess has put into my Captain's Circle "bank" (remember that original stipulation?). Now when I use that $5,375 to purchase yet another new new cruise, how in the world am I going to insure that? By this time the "real money" and the "bonus dollars" thoroughly homogenized. 

 

I can certainly understand any insurer being unwilling to insure "bonus dollars". But for the life of me I cannot figure out the mechanics of how they are going to make this happen.

 

All of this follows nearly exactly what I'm looking at doing (only the numbers are different) for several upcoming cruises. This isn't a theoretical exercise. I'm going to be coming to you when it's time to book these cruise using FCCs and I'm bewildered how these cruises will be insured given the position of the insurers.

 

Thanks for letting me ramble in the weeds.

Bill 

 

 

Hi Bill,

 

Coincidentally, I have been emailing my companies about this very subject because, as you correctly stated "of the trip insurers, is that they will NOT insure any "bonus dollars" that I receive".

 

I don't have this answer yet because I think the companies don't have it figured out yet. When I get the answer, I'll put it here. If this thread isn't active I'll create a new thread for it.

 

Steve

[SusieQft]

Hi Steve.

What if the cruise line issues the 100% FCC (or FCP -- Future Cruise Payment) for the amount you paid, and a separate FCC for the 25% incentive bonus.  Is the 100% FCC or FCP insurable, or is that still being figured out also?  I do understand that the separate 25% FCC is not insurable, since it is an incentive and not representing actual money paid by the customer.

 

Also, Crystal has an offer to cancel for a 75% cash refund and 25% FCC, where in normal times that 25% would have been a penalty for cancellation during that time period.  But it does represent money previously paid.  Is that FCC insurable?  

 

There is an administrative penalty if the passenger cancels before the 25% penalty phase, and this also turns into an FCC, ranging from $100 to $500 per person on Crystal.  It has been my understanding that this is not insurable.  Is that likely to change?

 

I have funds in the second (75/25) type of FCC already, and am likely to have funds in both the other types that will need to be utilized for future bookings before the end of the year, so you were going to be getting these questions from me privately anyway.  Since they seem to be variations on the theme of this thread, I thought I would share them here. 

 

I had been thinking that when I get my booking confirmation showing their use, that if they are "above the line" they are not insurable, and if they are "below the line," then they are insurable.  But if that is how it will work, it would seem like that would be the answer to the thread starter's question.  But from your response, it sounds like it might be more complicated than that.

[iamtrustworthy]

7 hours ago, SusieQft said:

Hi Steve.

What if the cruise line issues the 100% FCC (or FCP -- Future Cruise Payment) for the amount you paid, and a separate FCC for the 25% incentive bonus.  Is the 100% FCC or FCP insurable, or is that still being figured out also?  I do understand that the separate 25% FCC is not insurable, since it is an incentive and not representing actual money paid by the customer.

 

Also, Crystal has an offer to cancel for a 75% cash refund and 25% FCC, where in normal times that 25% would have been a penalty for cancellation during that time period.  But it does represent money previously paid.  Is that FCC insurable?  

 

There is an administrative penalty if the passenger cancels before the 25% penalty phase, and this also turns into an FCC, ranging from $100 to $500 per person on Crystal.  It has been my understanding that this is not insurable.  Is that likely to change?

 

I have funds in the second (75/25) type of FCC already, and am likely to have funds in both the other types that will need to be utilized for future bookings before the end of the year, so you were going to be getting these questions from me privately anyway.  Since they seem to be variations on the theme of this thread, I thought I would share them here. 

 

I had been thinking that when I get my booking confirmation showing their use, that if they are "above the line" they are not insurable, and if they are "below the line," then they are insurable.  But if that is how it will work, it would seem like that would be the answer to the thread starter's question.  But from your response, it sounds like it might be more complicated than that.

Hi SusieQft,

 

Thanks for this info and questions. I'll add them to what I'm asking the companies.

 

Steve

[iamtrustworthy]

Hello,

 

I'm sorry about the delay adding my answer to this thread. I have not been able to get a definite answer from all my companies, so this is the best I can come up with. I put it on this page, too: https://tripinsurancestore.com/what-is-your-trip-cost/

 

Q. Are Frequent Flyer Miles, Future Cruise or Travel Credits, Credit Card Travel Awards Insurable?

 

A. Thanks to the Coronavirus, this has become a much more complicated answer. For all of our plans:

• If you have a trip that was cancelled due to the Coronavirus and you were issued a Future Cruise or Travel Credit that is equal to the amount of money you had prepaid for the cancelled trip; and
• You already have a trip cancellation policy for the cancelled trip that you are changing the dates on; and
• The Future Cruise or Travel Credit is not for any additional bonus value (i.e. – the 100% not the 125% or 150% of the credit).

The Future Cruise or Travel Credits are insurable with the same policy if the Travel Credit was issued because your travel supplier canceled your trip due to the Coronavirus. Credits issued for other reasons may be insurable.

 

I suspect that all the companies will be doing this, but I haven't been able to get a definite answer from some of them.

 

I hope this makes sense.

 

Steve Dasseos