Why drinking on a cruise may sink your finances

Many of the 27 million people taking a cruise this year will spend a fair amount of shipboard time cozying up to the bar. But liquid lubrication may cost consumers more than it's worth. 

That's because drinking alcohol can void your travel insurance policy, or what travel insurance website SquareMouth warns is one of the "biggest mistakes" cruise-goers make. In other words, don't drink on board and assume your emergencies will be covered if you incur an injury. 

The health insurance policies that protect Americans where they live and work don't always extend to cruise ships. Because of that, many cruise passengers buy an additional policy from companies such as AXA, Berkshire Hathaway and Nationwide. Those policies include coverage for medical emergencies, but there's sobering fine print: coverage doesn't apply to intoxicated passengers. 

"Travel insurance can cover expensive cruise ship medical costs unless the traveler is intoxicated," said SquareMouth Director of Marketing Carolyn Leckie. "This is a standard exclusion in all policies. The language used is 'claims resulting from expenses incurred as a result of being intoxicated above the legal limit.'"

It's important to realize that a serious injury, such as a fall on a stairway or in one of the ship's pools, can mount into an emergency that costs far more than it would on dry land. If onboard medical personnel don't have the skills or equipment to treat the passenger, they might decide to lift the passenger by helicopter to an onshore hospital at a cost of up to $25,000. International evacuations could be even more costly. 

Chartering a plane to then fly the patient back to a U.S. hospital from a foreign country with limited medical services could tack on another $100,000. None of this is ordinarily covered by a standard health insurance policy.

A cruise passenger involved in an accident while drunk may mount the same defense as a motorist charged with driving under the influence, claiming they weren't intoxicated. But this is where the passenger and the cruise line could part company. The cruise line will have to "provide documentation during the claims process, such as medical records or a police report," that could undermine the passenger's claim for coverage, according to SquareMouth.

Cruise lines aren't unique in excluding drunkenness as a reason not to collect on travel insurance. It also applies to both domestic and international resorts. 

"If a traveler has a medical emergency while intoxicated, they will not be reimbursed for those medical expenses," said Leckie. Travel insurance policies can also exclude "dangerous activities," such as bungee jumping or skydiving, as well as "lower impact" activities like kayaking or riding in a hot-air balloon.

Cruise lines may offer cheap deals during "Wave Season," from January to March, but the discounted price is often made up by the high profit margin earned on the onboard sale of liquor, which is free-flowing and always available. Before passengers drink up, they may want to give a sobering thought to the downsides.