Tuesday, October 19, 2010

Regent Seven Seas Voyager - Cancelled Cruises...The Insurance Issue

Like a moth attracted to a light bulb, I admit I have been checking Cruise Critic and Luxury Cruise Talk message boards to see what the few vocal folks have to say and, now what those non-lawyers have to say about Regent Seven Sea Cruises' refusal to reimburse the cost of the RegentCare Insurance it sold to many guests for these cancelled cruises.

As an attorney and a travel agent and a member of the International Forum of Travel and Tourism Advocates I think I may have a bit of better handle on this topic than TravelCat2 and the others.  Maybe, huh? 

Travel Law - yes there is such a thing - comes into play.

First, what does the policy actually say?  While a certain usual suspect quotes certain language out of context, I was drawn to General Plan Exclusions on Page 11 of its Terms and Conditions (here are the RegentCare terms).  It states, quite clearly, "IN PARTS A & B:  WE WILL NOT PAY FOR ANY LOSS CAUSED BY OR INCURRED RESULTING FROM:...12. failure of any tour operator, Common Carrier, or other travel supplier, person or agency to provide the bargained-for travel arrangements".

Part A covers "Travel Arrangement Protection" and Part B covers "Medical Protection" The policy defines a Common Carrier as "any land, water or air conveyance operated under a license for the transportation of passengers for hire."

In other words, there is no insurance coverage under the RegentCare policy for Regent's failure to provide the cruise.

Second, what is Regent's obligation under the law?  There is no question that under the laws of various countries in Europe, Regent would be held responsible for not only the return of the cruise fare, but the cost of repatriating the passengers and their incidental expenses as well as, possibly, damages from inconvenience and the like.  Although I do not have any cases on point at the moment, I am quite confident from reading many cases in the past, that a future cruise credit that requires to you purchase another cruise in order to utilize same is not satisfactory under those laws.  (There is a poster on Cruise Critic, CruisinGerman, that has been asserting this point, but has been abused - as is done on Cruise Critic - rather than asked for more information.  Don't get me started again on that!)

There are very few cases in the United States on this point, but the fact is that the economies associated with bringing such a claim just aren't there.  It is not that the case itself is necessarily that difficult or time consuming, it is that there are contractual provisions in the cruise contract that make the burden far greater than it should be.  (This is not a slight on Regent, almost all of the cruise lines do this.)

But there is a simple concept that seems to be missed by many:  There is a contract to provide a cruise and there was a clear breach of that contract.  The same party that breached the contract to provide the cruise sold the insurance policy as part of the cruise package; it may have been optional, but it was sold as part of the package.  It was charged on the same invoice and is integrally linked to the cruise. 

The interesting part to me is that the policy specifically states it does not apply to Regent's failure to perform (breach).  Hence, Regent has sold an insurance policy that is, to my mind, void ab initio (or void from the outset) and/or possibly violative of the applicable Consumer Fraud Acts.  For example, here in New Jersey if there is a material omission, whether intentional or not, by a seller it triggers a violation under the CFA.  The fact that Regent does not expressly disclose that the insurance does not insure against a breach by Regent in my opinion triggers the significant penalties under the Act. 

Third, does it matterTo me the incident and its handling is a customer service nightmare for Regent Seven Seas Cruises.  When you have spent millions and millions of dollars marketing yourself as a "6 Star" (whatever that is) Cruise Line; as everything being "Free.  Free.  Free"; as being "The Most Inclusive Cruise Line"...and you have some of the highest fares in the industry, you better do more - much more - than a cruise line that has people spending $1,500 per person on a cruise (Celebrity Century, for example, who gave a 25% cruise credit plus much of the same as Regent did...it didn't need hotels because the ship was used for days). 

Regent's providing hotels because the ship was no longer available and tours was definitely the right thing to do.  Regent's not providing the ideal connections at whatever cost was totally appropriate.  But it ends there:

1.  Limiting compensation for third party air;

2.  Providing a lousy $1,000 future cruise credit (small enough so it will still turn a profit on the damaged guests when (if) they take their next cruise!); and,

3.  Keeping the insurance premiums which became worthless due only to Regent's breach of contract,

are not things that win me over or, I believe, even marginally meet Regent's legal, moral or marketing obligations.

So read on how those guests used their cruise insurance or how it might be able applied to another Regent cruise..and then ask yourself:  "I wonder what Regent is getting paid from any insurance policy it may have for such an incident or any liability of the azipod manufacturer or repairer under a warranty or contract claim?"

You think there is a "super" travel agent that knows all things Regent?  Think about whether she explained these things to you...or if she is more concerned with protecting her commissions (present and future) and not rocking the boat with the cruise line she does the most business with. 

As for me (the obvious question):  I write this stuff and it is out there for ever.  Do you really think I would change my position? Nope:  My clients are my main concern. But then again, it is also why I am so supportive of The Yachts of Seabourn.  I am extremely confident this would never happen.