Travel Cancellation Insurance: Protecting Your Trip and Your Wallet

Traveling can be a wonderful experience, but it also involves many risks that can ruin your plans and cost you a lot of money. Unexpected events such as illness, accidents, natural disasters, or even political upheavals can force you to cancel your trip or cut it short. This can mean losing your non-refundable deposits, tickets, reservations, and other expenses. Fortunately, you can protect yourself and your investment by purchasing a travel cancellation insurance.

What is Travel Cancellation Insurance?

Travel cancellation insurance (TCI) is a type of travel insurance that reimburses you for the non-refundable costs of your trip if you have to cancel it or interrupt it due to a covered reason. The covered reasons may vary depending on the policy, but typically include:

Note that some policies may also cover other reasons, such as pregnancy, divorce, passport theft, or travel supplier bankruptcy. However, most policies do not cover pre-existing medical conditions, mental health issues, or risky activities such as extreme sports or self-inflicted injuries. Make sure to read the policy carefully and ask questions to the insurer if you are unsure about the coverage.

Why Do You Need Travel Cancellation Insurance?

Even if you are a careful and healthy traveler, you cannot control the unexpected. A sudden illness, a family emergency, a flight cancellation, or a missed connection can disrupt your plans and cost you a lot of money. Without TCI, you will have to bear the financial loss and the inconvenience of rescheduling or cancelling your trip. With TCI, you can get reimbursed for the prepaid and non-refundable expenses, such as:

• Airfare
• Lodging
• Tours and activities
• Cruises
• Rental cars
• Theme park tickets
• Event tickets
• Visa fees
• And more

The amount of reimbursement may depend on the policy limits, deductibles, and exclusions. Some policies may cover up to 100% of the total trip cost, while others may have a capped amount per person or per incident. Some policies may also require you to provide a proof of the covered reason, such as a doctor’s note or a police report, before processing the claim.

How Do You Buy Travel Cancellation Insurance?

There are several ways to buy TCI, depending on your preferences and needs:

• Through a travel agent or a tour operator: Many travel agents and operators offer TCI as part of their packages or as an add-on option. They may partner with one or more insurance companies and provide you with a quote and a policy. Make sure to compare the coverage and the price with other options before making a decision.
• Through an online travel insurance aggregator: Many websites specialize in comparing and selling travel insurance policies from multiple insurers. They allow you to enter your trip details and preferences and receive a list of quotes to choose from. Make sure to read the reviews and the terms and conditions of each policy before buying.
• Through an insurance company or a broker: You can also buy TCI directly from an insurance company or a broker that specializes in travel insurance. They may offer more customization and flexibility options, but also require more paperwork and communication. Make sure to choose a reputable and licensed company and to ask questions about the coverage.

The cost of TCI may vary depending on several factors, such as:

• The total trip cost
• The age and health of the travelers
• The destination and the duration of the trip
• The covered reasons and the deductibles
• The level of coverage and the add-ons
• The insurer and the distribution channel

Expect to pay around 5-10% of the total trip cost for a standard TCI policy. However, the actual cost may be higher or lower depending on your situation.

FAQ

What is the difference between travel cancellation insurance and travel medical insurance?

Travel medical insurance is a type of travel insurance that covers the medical expenses and emergency medical transportation of the travelers while abroad. It may also cover other services such as trip interruption, baggage loss, and accidental death and dismemberment. However, it does not cover the non-medical expenses of cancelling or interrupting the trip. Travel cancellation insurance, on the other hand, focuses on reimbursing the non-refundable costs of the trip due to a covered reason.

Can I buy travel cancellation insurance after I book my trip?

Yes, you can buy travel cancellation insurance any time before the departure date of your trip. However, some policies may have time limits or exclusions for pre-existing conditions, so it is better to buy it as early as possible. Also, note that some policies require you to buy the insurance within a certain period after making the initial deposit or booking, in order to qualify for full coverage.

Can I cancel my travel cancellation insurance policy?

Yes, you can cancel your TCI policy anytime before the effective date, usually for a full refund. However, some policies may have a cancellation fee or no refund after a certain period. Make sure to read the cancellation policy and the terms and conditions of the policy carefully before buying it.

Does travel cancellation insurance cover COVID-19?

It depends on the policy and the date of purchase. Some TCI policies may cover COVID-19-related cancellations or interruptions if you or a family member get sick with COVID-19 before or during the trip, or if the destination becomes inaccessible due to travel restrictions or quarantine requirements. However, some policies may exclude COVID-19 or require a negative test result or a vaccination certificate. Make sure to check the policy details and ask the insurer about the COVID-19 coverage.

Is travel cancellation insurance worth it?

It depends on your risk tolerance, your budget, and your travel plans. If you have invested a lot of money in your trip and cannot afford to lose it due to a covered reason, then TCI may be a wise choice. However, if you have a flexible or low-cost trip and can easily reschedule or cancel it without significant loss, then TCI may not be necessary. Make sure to compare the cost and the coverage of TCI with other travel insurance options, and to read the policy carefully before buying it.