Ken Smith isn’t the only person affected by the untimely demise of Cruise West. But he thought he wouldn’t be in the same boat as the other stranded passengers. After all, he had travel insurance.

He thought wrong.

His insurance company, Access America, said it wouldn’t cover a company for financial default. I got involved to see if I could help, and I’ll get to the resolution in a moment. But first, let’s hear from Smith.

My wife and I booked a cruise to Patagonia for February, 2011, and paid cash ($9,392) for quite a bit of it to get additional discounts. The deposit of $2,559 we paid with a credit card. We also bought travel insurance online through Access America, a company Cruise West’s agent recommended to us.

Well, with the default, we’ll likely get the deposit amount back from our credit card company, but the cash is in doubt.

Access America says that, even though their online system asks what cruise line is being used, and their dropdown box displays the Cruise West name, they do not in fact cover Cruise West cruises for financial default. We purchased the insurance on August 26, 2010, and Access America says they stopped covering Cruise West sometime in July, 2010.

I spoke to a supervisor who acknowledged that our file shows Cruise West as our carrier, but also says there is no recourse, and I should have checked the last page of the 24-page document they sent me after purchasing the policy, and I would have seen that Cruise West’s name does not appear.

That was our only warning that we had no coverage.

They have offered us nothing except their standard script of “you should have read the fine print,” but this seems more like fraud to me. A quick look at ripoffreport.com shows that Access America and their affiliates have hundreds of complaints against them for failure to pay claims.

Is there anything we can do here to get any money from Access America?

I asked Access America to review Smith’s case. Here’s its response:

We are very sorry that Mr. Smith was one of the customers affected by Cruise West’s closure on September 18, 2010. We understand and sympathize with his situation. The closure of Cruise West has affected many and we are very sorry to see this occur.

While we have provided coverage to many of our customers who had cruises canceled by Cruise West, the policy Mr. Smith purchased did not offer coverage for financial default of Cruise West, nor did he meet the financial default requirement of purchasing his insurance policy within 14 days of making his initial trip deposit.

His policy did include a 10-day money back guarantee, but as that timeframe has long expired, we are unable to honor his request for a premium refund.

Again, we are sorry that Mr. Smith was affected by the closure of Cruise West and we wish him well.

At this point, I would probably jump in and say, “Look, this wasn’t a covered event. Smith should have known.”

I can’t do that.

Anyone who tells me Smith should have read a 24-page document and noticed that Cruise West was missing, is smoking something illegal, and they’d better share.

Seriously, folks, this guy bought a policy in good faith, and he was led to believe it would cover him. Do you really expect me to tell him his $6,833 is lost forever?

I’m sorry, but I can’t. I’m not siding with Access America on this one.

Smith is right. His policy should have covered him.

Update (10/29): Access America sent me the screen shots from Smith’s insurance purchase.

A representative adds:

I wanted to also point out that since Mr. Smith purchased his travel insurance plan through AccessAmerica.com, he was provided with very detailed information about our financial default requirements, as well as a warning that not all travel suppliers are eligible for financial default coverage and that customers should check our list of covered suppliers to see if their supplier is covered.

Certainly, Mr. Smith also had the opportunity to view this information in his policy when he received it, but he also clearly had the opportunity to review the financial default coverage prior to purchasing his policy.

(Photo: Word Ridden/Flickr Creative Commons)