Is the Jones Act a legitimate reason for a travel insurance company to deny a claim, or a convenient excuse? Depends on your perspective.
The Jones Act prohibits foreign-flagged cruise ships from transporting passengers between two ports within the United States. And if you’re Mariann Cutroneo, it’s a cop-out. She and a friend recently missed their Celebrity Alaska cruise because of a mechanical problem with a flight, and were unable to meet the ship at the next port. Her travel insurance company paid her $150 in compensation — just a fraction of the cost of her vacation.
If you’re Access America, it’s a legitimate reason to deny her claim. Not only is the Jones Act a strictly-enforced law, but there’s a provision in its insurance contract that addresses a Jones-related cancellation.
So who’s right?
Let’s begin with Cutroneo’s case.
I planned a trip to Alaska for last June. It was a cruise tour with Celebrity. My airfare was with Air Canada.
I arrived at the airport in plenty of time, was seated on the aircraft. As we taxied out, the airplane developed mechanical problems and had to be returned to the terminal. About an hour later, we were informed me that we had to leave the aircraft and the plane would be delayed until it could be serviced. That later changed to canceled.
We were schedule to board ship that afternoon in Vancouver. The airlines tried to accommodate us by redirecting us to another airline, but nothing would get us to Vancouver in time to board the ship. Air Canada offered to fly us to Seattle, provide lodging and fly us to the first port of call. However, due to the “Jones Act” we were not able to board in Ketchican, Alaska.
Before we go any further, I should probably tell you a little about the Jones Act, also known as the Merchant Marine Act of 1920. It states that “no foreign vessel shall transport passengers between ports or places in the United States, under penalty of $200 for each passenger so transported or landed.” And since cruise ships are foreign-flagged vessels, that applies to Cutroneo’s case.
And now, back to her story …
Since I had insurance with Access American covering the entire trip, I called them immediately to notify them of the problem. They assured me they would take care of it, just write them with all the information including the letter about referencing the “Jones Act”. I did all that. They later informed me that the trip was not canceled but considered a trip delay and would only give us $150 in compensation.
I have argued my point to deaf ears. I have written letters, the last one dated August 19, asking them to reconsider. I have written to the Insurance Commissioner of New Jersey, asking for his help. I have heard from neither.
My travel agent also tried to no avail. Access American insists this is a trip delay, not cancellation and therefore we are not entitled to further compensation.
Can you help?
I asked Access America about Cutroneo’s situation.
We are very sorry that Ms. Cutroneo and Ms. Marshall were not able to embark on their cruise. We understand and sympathize with their frustration. We are glad that we could cover them under the Trip Delay benefit of their travel insurance policy. Unfortunately, we could not honor their claim for Trip Interruption because the reason they could not continue on their trip was that they were prohibited from doing so by a government regulation (the Jones Act) and “government prohibitions or regulations” is a specific exclusion within their travel insurance policy.
In other words, they canceled because of the Jones Act. Case closed.
Or is it?
Cutroneo contends that her trip was interrupted because of a mechanical delay on her inbound flight. Access America says the mechanical problem was just a delay.
The bigger issue, though, is the value of travel insurance. Travel agents and cruise lines rarely miss an opportunity to tout the benefits of reliable coverage. But Cutroneo just lost her entire cruise — a cruise she had taken the trouble to insure. A case like this really undermines your faith in travel insurance. At least it does for Cutroneo.
(Photo: Tomas Mascardo/Flickr Creative Commons)
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{ 18 comments… read them below or add one }
I would suggest she take them to court. She can prove that it was a cancellation and NOT a Jones act matter. Small Claims might be her only option. She has proof that the flight was canceled. No matter what, she would have missed her port of call, and been unable to board via the Jones Act. Missing the ability to board is a cancellation as there are no other possible options to rectify once you miss your port of call, other than to try and catch it at another port. Maybe she would find some sympathy there?
Justin
Note to self … make darn sure if I join a cruise that docks in the US that I make the ship. Guess I’d have to fly in the night before like every TA I’ve had in the past 15 years has recommended and I’ve done. Oh and read and understand the DOC for any travel insurance policy I buy.
Sounds like their travel insurance made sure they were covered. I wonder if they would have a claim against Celeb if they purchased their airfare through Celeb?
Travel insurance is a ponzi scheme.
Travel insurance always finds ways not to pay.
In this case – sue them. Each PERSON should sue them indivdually in small claims court to get around the limits- you were the 3rd party beneficiary of an insurance policy. Next, given the Jones Act language – through no fault of her own, the OP was prevented from joining the cruise in progress. I fail to understand how the Jones Act can even be applicable since the Jones Act is not transporting the person between 2 points in the USA.
I would have just offered the cruise line $400 for the 2 people to pay the fine to join the cruise in Ketchikan. . . .
Why didn’t Celeb let the customer pay the fine and then board anyway? $200 is waaaayyy cheaper than the cost of the trip. (And $150 of it would have been covered under the delay insurance.)
I think this is a case where the insurance co.’s ass is well-covered, so she is going to get nowhere with regulators or the courts, but this is kind of a scummy exclusion.
It seems to me there’s one court where the cruise line would lose: the court of public opinion. This may be the time to contact the local networks and talk to the consumer reporter at each to see what they can do about putting Celebrity America’s name across the airwaves in a negative light. That might do something.
As a travel agent, I always strongly encourage clients to fly in the day before especially when flying cross country (i.e. NJ to Vancouver).
Trip CANCELLATION typically refers to cancellations that take place BEFORE the trip starts … i.e. before you leave home or board a plane. This scenario does fall under trip DELAY or at best INTERRUPTION.
I agree that Celebrity should’ve offered the opporunity to pay the fine for “violating” the Jones Act (which is archaic and should be abolished altogether, but that’s a whole different story). It would’ve been a lot cheaper, and they could’ve still enjoyed most of their cruise (and if I were them I would’ve tried to get AC to reimburse them if AA wouldn’t).
As for small claims court, read the AA policy closely, I bet they won’t be able to file in NJ and flying to wherever AA says court disputes need to be mediated, will add to their costs (and they probably will lose in court anyway).
The actual law in question is the Passenger Vehicle Services Act (the Jones Act applies to cargo) and the current fine for violating it is $300 per person.
Usually, at least on Alaska cruises, the cruiselines will let you pay the fine and catch up to the ship but they do have the right to deny you boarding (the opposite is true in Key West, they usually do not allow you to board). So the question would be was she told by the cruiseline that she wouldn’t be allowed to board in Ketchikan or had she heard something about the law and just assume that she wouldn’t be able to catch up to the ship?
If the cruiseline told her, no we won’t allow you to board then I would say keep going after Access America. If she just assumed they wouldn’t allow her to board, then I’d say she’s out of luck for not checking with the cruiseline and her travel insurance.
For others reading this, for me the biggest issue is not the travel insurance (I’ve made several claims over the years without problem – but just like anything there are good providers and bad providers, you really need to read what is and isn’t included before deciding to purchase), but the fact that she chose to fly from NJ to Vancouver day of cruise which didn’t leave her any leeway in case something went wrong with the flights. Even if she’d been allowed to board in Ketchikan by paying the $300 fine, it would’ve cost less to fly in a day in advance and get a hotel room for the night – that would’ve been just as beneficial as travel insurance.
The Jones Act has to be one of the dumbest laws on our books. Serves no real purpose and is clearly antiquated. But I’m sure travel insurance companies love it!
I had a similar problem, but it was reversed. Our ship docked in Miami and I had to leave the ship there. The cruise line charged me $200.00 to do this as they explained the situation to me, and told me that they would be fined for doing this, so the $200.00 was charged to my cc and I left the ship.
Cliche problem, I think. It also commonly happen to us, here. Anywhere. Bad service. Why does customer always be sacrifice ? Court will always lengthen our sufferings. No ideal solution so far.
Allison,
The Jones act serves at least one purpose. There may be others, but this is the first one that came to mind.
The Jones Act seems designed to encourage US flag shippers. And this seems to be a way to force shippers to pay for a military necessity. Why? The US military, like others, needs to ensure it can control a lot of transportation (such as ships) in the event of war. They then use the transportation to move men and materials. An example was the use of the Queen Elizabeth II during the Falklands war. There are two ways to ensure adequate shipping can be controlled (either seized or rented). The first is to ensure that the domestic economy uses ships and maintains trained crews. The second is to build a bunch of cargo ships and pay to train crews and have them sit idle until these is a war. The first way is cheaper for society because society gets some use out of the ships during peacetime. The Jones act seems to ensure that the less expensive option is chosen.
Repealing the Jones act means that the Navy will need to buy a bunch of extra ships and hire and train a bunch of extra men. Nobody will lose their jobs because the Navy will hire the guys the shipping company lays off when business is lost to foreign carriers. Shipping prices will fall, but taxes will rise.
I guess I need some fine tuning on this law. Is Ketchican the only port the ship stops at before returning to Canada? It doesn’t stop at any other port in the inside passage, such as Juneau? If it does have other Alaskan ports of call, isn’t that transporting between places in the US?
When I go on any cruise or foreign land tour, I always travel 2 days ahead of time. Besides having more of a chance to arrive on time, I get to experience the city I’m departing from. Sometimes I even book my return a day later, just in case other problems come up.
Carrie, the government doesn’t care how many US ports you stop at in the middle of the cruise as long as you stop in at least one foreign port (for a roundtrip cruise, the rules are different for one way cruises between two different US ports). All they are looking at is where did you first get on the ship, where did you ultimately get off the ship, and did you leave the US at sometime inbetween.
There are travel insurance policies that cover this scenario, Access America just isn’t one of them. The problem being that you never know which “event” will arise to disrupt the trip, prior or during.
I think it’s disingenuous to state that “travel insurance always finds ways not to pay” and glibly calling it a ponzi scheme. If the first were true, the industry would not exist. Regarding the latter, all insurance companies, including your auto, medical etc collect premiums with the general historical knowledge of what percentage of policy holders will likely end up filing a claim. The difference being the intent. Insurance companies, while certainly guilty of hugging their own “little print”, are required to have a reserve of funds available for potential claims. While that accumulation may appear to be ponzi-like, the intent of ponzi schemes is to encourage more and bigger risks. How does that affect the individual traveler?
Madoff is the latest poster boy of how ponzi schemes can go awry, to the detriment of all involved.
Stories like this encourage our cynical side to stand up and spit. A more balanced approach would be to realize this can’t be the first time that Access America (or any other travel insurance company) has adjudicated a policy in this manner and it would be prudent to have travel industry gurus geared up on finding a solution specifically focused on how this antiquated law applies to leisure-travelers on ships in the Alaska, Florida and any other applicable market. Anyone wanna be a hero?
Has anyone successfully sued a travel insurance company in small claims court? I, along with many others in Fla., have been denied claims by Jerry Watson’s travel insurance companies (under 3 or 4 names). They deny based on conditions they say were not met but which do not appear in the “policies.” I am tired of corresponding with them only to get more “unmet conditions” and delaying tactics. It’s time to sue! Anyone know how?
One subtle but important fact- PVSA says *between* two US ports. If a cruise goes from Seattle to Anchorage for example, it must visit a foreign port. But a round-trip Seattle-Seattle or “cruises to nowhere” are not affected because they do not transport people “between” two points. In this case though, there would be a violation because it would be from Ketchikan to the US port where the cruise ends….if it ended in Vancouver that would be different.
The trip insurance shouldn’t play the “government regs” card. Government regs say airlines can’t fly in certain weather or with defective aircraft…so a weather or mechanical cancel would not be covered by their logic. (In their defense if that exclusion was *clearly* stated, then it’s the purchaser’s risk/price decision to make).
Kenish, one correction, roundtrip cruises must make a stop in a foreign port under the PVSA. It’s just cruises to nowhere that don’t require a foreign port stop.
You may be thinking though of the difference between a roundtrip and a oneway cruise. On a one-way cruise between two US ports, you must stop in a DISTANT foreign port (Canada doesn’t qualify). In Ms. Cutruneo’s case, I’m guessing her cruise was from Vancouver to Seward (if it had been roundtrip Vancouver it wouldn’t have mattered if she boarded in Ketchikan because the PVSA wouldn’t have applied), so if she had boarded in Ketchikan it would’ve been a one-way cruise between Ketchikan and Seward falling under the distant foreign port provisions.
What a pain. Unfortunately it does sound like their trip was cancelled because of government regulations, especially since the airline offered to fly them to Seattle.
I believe the biggest problem is the existence of a nonsensical law like the Jones Act. What on earth is that about?
It never fails to amaze me how Americans can be so anti big government when it actually helps people’s lives and yet put up with such idiotic legalism the rest of the time. So universal health care or introducing minimum vacation allowances is socialism but it’s okay for government to have a pathetic law that stops people embarking on a cruise in Seattle instead of Vancouver? Pah!