Trip insurance when paying with gift cards

[tinytinkmom]

So we are Platinum Disney cruisers, and have paid for almost all of our cruises entirely with discounted Disney gift cards. I have always purchased trip insurance, and learned something on the Cruise Critic board recently that blew me away... Apparently, insurers DON'T consider the portion of your cruise paid with gift cards as reimbursable, if you have to file a claim.

I have used Roam Right to insure our last several trips, so I emailed them to see what they had to say:
"Thank you for your email. Our Pro and Pro Plus plans define payment as the cash, check, or credit card amounts, rewards, miles or points; actually paid or used for Your Trip. Certificates, vouchers, discounts and/or credits applied (in part or in full) towards the cost of Your Travel Arrangements are not Payments or Deposits unless they were provided as a Refund and the Insured provides original proof of payment as defined herein.

Gift cards do not meet this definition and are therefore not reimbursable under the insurance. The amount that you put on your credit cards towards the trip may be reimbursable under the policy if you cancel your trip due to one of the unforeseen reasons stated in the policy."

Curious if anyone has a trip insurance company where they have actually been able to confirm that the portion paid with gift cards IS reimbursable?

 

[PrincessShmoo]

define payment as the cash, check, or credit card amounts, rewards, miles or points; actually paid

A gift card is "cash" isn't it? I mean, someone paid cash for it. It has a cash balance, like a debit card. I think they're wrong defining a gift card as not cash.

 

[sadiecatie]

This is new information for me! And important here - a lot of people pay for large portions of their Disney cruises with gift cards (myself included). If that’s the case I’d want to know before starting to buy up gift cards for our next big cruise - I’d rather just pay on a card and have the peace of mind of trip protection than the few hundred savings I’d get from the discount.

 

[onesam319]

I want to know about this too. I use my Disney Premiere Visa to buy Disney gift cards at Giant Eagle which gives me fuel rewards. Except for my placeholder, all of my payments have been with gift cards. I bought my insurance from Disney.

 

[PrincessShmoo]

I want to know about this too. I use my Disney Premiere Visa to buy Disney gift cards at Giant Eagle which gives me fuel rewards. Except for my placeholder, all of my payments have been with gift cards. I bought my insurance from Disney.

Sounds like a good question to ask the DCL insurance people.

 

[Cfabar1]

Wow would be a big problem for many if this is the case! Would cause me to just start putting everything on the DCL Visa....

 

[tinytinkmom]

Response from John Hancock Travel Insurance:

“I apologize for my delayed response. I wanted to double check on the gift card question. We do only insure credit card or cash payment for non-refundable expenses.
Our Underwriters define that payment as:

Payments or Deposits means the cash, check or credit card amounts actually paid for Your Covered Trip.
Payments or Deposits do not include certificates; vouchers; frequent traveler rewards, miles or points; discounts
and/or credits applied (in part or in full) towards the cost of Your Covered Trip

Therefore, a gift card would not be insurable. You will be able to insure the other portion of your trip. The trip cost you would put down for the policy would exclude the gift card amount. Please keep in mind we also need the trip cost broken down per traveler.”

 

[ichoose2believe]

Response from John Hancock Travel Insurance:

“I apologize for my delayed response. I wanted to double check on the gift card question. We do only insure credit card or cash payment for non-refundable expenses.
Our Underwriters define that payment as:

Payments or Deposits means the cash, check or credit card amounts actually paid for Your Covered Trip.
Payments or Deposits do not include certificates; vouchers; frequent traveler rewards, miles or points; discounts
and/or credits applied (in part or in full) towards the cost of Your Covered Trip

Therefore, a gift card would not be insurable. You will be able to insure the other portion of your trip. The trip cost you would put down for the policy would exclude the gift card amount. Please keep in mind we also need the trip cost broken down per traveler.”

Thanks for the info.
ETA: I would think that gift cards would be considered guaranteed funds like cash and debit/credit cards.

Looks like I am going to just pay the rest of my cruise off with a credit card.

 

[SL6827]

Holy crap!!! I would have never thought of such. Unreal.

 

[Sleepyluke]

Thank you for this info, it is huge for us, as we buy all cards to pay for the trips. I am however curious if they are asking/answering a different question. Based on the way the response is worded I think the insurance company thinks the gift cards are a discount or a certificate issued by Disney with no monetary value changing hands. If this is the case, I agree with the insurance.

The Disney gift card that I walk in and pay $100 cash for is exactly the same as $$100 cash on a Visa gift card/pre paid debit. It is still a $100 expense for my trip. I don't think the actual mechanics of the payment change anything. I have no way to give DCL $100 cash before getting on the ship so I have to convert it to a for of payment that they accept.

BUT if they do deny these going forward, there is a giant loop hole that they have found to not pay alot of claims.

 

[sadiecatie]

Thank you for this info, it is huge for us, as we buy all cards to pay for the trips. I am however curious if they are asking/answering a different question. Based on the way the response is worded I think the insurance company thinks the gift cards are a discount or a certificate issued by Disney with no monetary value changing hands. If this is the case, I agree with the insurance.

The Disney gift card that I walk in and pay $100 cash for is exactly the same as $$100 cash on a Visa gift card/pre paid debit. It is still a $100 expense for my trip. I don't think the actual mechanics of the payment change anything. I have no way to give DCL $100 cash before getting on the ship so I have to convert it to a for of payment that they accept.

BUT if they do deny these going forward, there is a giant loop hole that they have found to not pay alot of claims.

I wonder if it is more about the idea that you have paid real money (cash, credit) to X retailer (Target, Sam's Club, etc) for the gift card, then you are simply applying the value of the gift card to the cruise. It's not a meaningful difference to the consumer, but to the insurance company, they would only reimburse for real money spent toward payments for the vacation - as far as they are concerned, the real money paid was to unrelated retailers and therefore is not reimbursable. (I'm not going to risk it - from here on out I'll only do gift cards for our on-board charges - if something happens and we can't go, there's always the next Disney vacation to spend those funds! But I'll just put the actual cruise charges on my credit card).

 

[SL6827]

This is beyond valuable information.

 

[Calantha]

I reached out to the insurance company I used for our covid-cancelled trip to South Africa in 2020, because I was planning to use them for Europe next year. The response I received said, "As long as you can document your purchase of those gift cards through your bank/credit card statements, you would be reimbursed."

 

[Deb]

So it sounds like using a Disney Rewards card might not be insurable. Can't really document the "purchase" of the rewards. That's disappointing. I've been saving rewards for years with an eye on using them for a cruise.

 

[auntlynne]

So it sounds like using a Disney Rewards card might not be insurable. Can't really document the "purchase" of the rewards. That's disappointing. I've been saving rewards for years with an eye on using them for a cruise.

You still can! Buy DCL coverage for the cruise fare portion of your vacation. They have provisions for 75% of cruise fare credit (I don’t know all details - never filed a claim).

I get a policy to cover medical care and evacuation (a much bigger bill than any cruise fare). Annual fee of $75 from my bank - not total trip coverage; just the big expense if I am ill out of country (and covers all trips for a year).

Yes, insurance is a great idea. And one that most people never have to file a claim against.

 

[Deb]

You still can! Buy DCL coverage for the cruise fare portion of your vacation. They have provisions for 75% of cruise fare credit (I don’t know all details - never filed a claim).

I get a policy to cover medical care and evacuation (a much bigger bill than any cruise fare). Annual fee of $75 from my bank - not total trip coverage; just the big expense if I am ill out of country (and covers all trips for a year).

Yes, insurance is a great idea. And one that most people never have to file a claim against.

several people above have stated insurance won't cover you if you paid with gift cards or can not document the purchase of those cards

 

[auntlynne]

several people above have stated insurance won't cover you if you paid with gift cards or can not document the purchase of those cards

True. Actually, DCL insurance does include medical and evacuation coverage (maybe not enough).

There is the insurance part of the plan. Does DCL insurance have a stipulation about gift cards? (I guess I have to re-read this thread more carefully for that detail).

But they also have the Cancel for Any Reason section which provides a 75% credit for a future cruise (time limited). This is the part where it helps - when an emergency comes up after paying in full. As long as you can cruise again in the coming year, your loss of cruise fare is only 25%. This is not a return of money, it is a cruise credit - so payment source should not be a factor.

Cancel For Any Reason - Non-Insurance Feature Provided by Disney Cruise Line

Receive a future cruise credit up to 75% of the cancellation fee amount to apply toward a future Disney Cruise Line sailing if you need to cancel for any reason not covered by the insurance portion of the plan. Credits are valid for one year from issue date, are not transferable, and have no cash value. Certain restrictions apply. This benefit is provided by Disney Cruise Line.

Travel Insurance - Underwritten by Arch Insurance Company

The insurer will reimburse up to the following limits:

Benefit	Coverage Details
Trip Cancellation and Trip Interruption	Up to total trip cost ($20,000 limit) if you cancel or interrupt due to sickness, injury, death and other covered reasons
Trip Delay	Up to $500 if your cruise vacation is delayed for 6+ hours due to carrier-caused delays—including weather, unannounced strike and more
Accident/Sickness Medical	Up to $20,000 to cover medical treatment, hospitalization and more if you become sick or injured on your cruise vacation
Emergency Medical Evacuation/Repatriation	Up to $30,000 to cover emergency medical transport
Baggage Loss	Up to $3,000 to cover loss, theft or damage to your bags or personal possessions
Baggage Delay	Up to $500 to cover the purchase of necessary items if your bags are delayed for 24+ hours

 

[Deb]

but what makes you think DCL insurance will cover the purchase using reward dollars?

 

[Mommb]

but what makes you think DCL insurance will cover the purchase using reward dollars?

What auntlynne showed was that if a claim for the refund of cancellation fees is denied by the DCL-booked insurance, DCL will provide a credit for 75% of the cruise fare to be used on another cruise within the next year.

This credit is explicitly not part of the insurance, and it would apply if the insurance denies a claim due to the cruise being paid for with gift cards.

 

[auntlynne]

The cruise credit part does not require them to return money to you. You have paid for a cruise, they help you have a cruise at a later date. They aren’t losing money. And you would still have a good feeling toward them.