Trip cancellation insurance: 6 ways to expect the unexpected

When you plan a trip, you expect to get to your destination. But sometimes it doesn’t work out that way. No matter how carefully you plan, some things are beyond your control. Because anybody’s travel plans can fall through, it’s easy to see why travellers love trip cancellation insurance.

Updated September 14, 2021

Here are 6 situations that are covered among the causes of cancellation or modification recognized by your insurer:

1. Illness or injury

A family member or your travel companion (or even you!) suffers an illness or injury, or tests positive for COVID-19, making it impossible to travel. Or worse yet, a loved one dies.

2. Severe weather

Your plane is grounded due to bad weather, the flight is cancelled because of an approaching storm or your carrier is delayed due to de-icing. Or maybe the weather has made the roads so bad, it’s nearly impossible to get to the airport.

3. Political climate

The government issues a travel advisory for your country of destination just before you leave.

4. Civic duty

You’ve been selected for jury duty or called to testify in a trial.

5. Change in financial situation

You lose your job just before you’re scheduled to leave and can no longer afford the travel costs.

6. Accident

There’s a fire in your home just before your trip and you have to stay home to sort things out.

What does trip cancellation insurance cover?

All non-refundable travel costs, including:

  • Plane tickets
  • Hotel reservations
  • All-inclusive packages

What about the limitations and exclusions?

It might sound cliché, but it’s a fact: trip cancellation insurance has its limits. Here are a few common examples:

COVID-19

The pandemic slipped your mind for a moment, so you booked and prepaid your trip… but now you’re worried about catching the virus abroad and want to cancel. Anybody planning a trip these days knows that the coronavirus is everywhere. Cancellation insurance won’t cover a memory lapse or any reason that was known when the trip was booked. Cancellation fees will only be covered if the federal government issues a level 3 (avoid non-essential travel) or level 4 (avoid all travel) advisory for your destination AFTER you’ve purchased your trip.

Weather conditions

The forecast is calling for bad weather. It’s disappointing, but your insurance won’t cover you if you cancel your trip.

Personal situation

You and your partner split up just before your trip. Even if your partner was your travel companion, that’s not covered either.

Job situation

Your boss won’t give you the time off, so you have to cancel your trip. Unfortunately, that’s not covered by your insurance. Always make sure your vacation time is approved by your employer before you pay for your trip.

Important documents

It’s the day of your departure and you still haven’t received your passport—or you realize it’s expired when you get to the airport. These situations aren’t covered by your trip cancellation insurance either.

Speaking of travel documents, be sure to set some time aside to figure out what documents you’ll need to show to travel companies or authorities where you’re going (negative COVID-19 test, vaccine passport, etc.). Don’t let 1 missing document spoil your whole plan! Especially because your insurance won’t cover changes to your itinerary.

Practical tips about trip cancellation insurance

  1. Pay attention to what’s non-refundable when you plan your trip. Your coverage is limited to the amount of insurance you purchase.
  2. Get travel insurance as soon as you make a deposit or pay for your trip. Once you have a reason to cancel, it’s too late to get coverage.
  3. Read and make sure you understand the conditions, exclusions and limitations of your trip cancellation insurance—especially exclusions for injuries or unstable medical conditions. They vary from one insurance company to the next.
  4. Trip cancellation insurance is still valid even if you’re leaving in a few hours, because it includes trip interruption coverage. And after departure, it covers:
    1. The unused and non-refundable portion of payments you made in advance
    2. Living expenses for some specific situations, like if you have to stay later than planned
    3. Additional fees caused by changing the date or time of plane, train, boat or bus tickets

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