Trip Cancellation - What's Covered?
Trip Cancellation Insurance can save your hide if your plans fall apart. Make sure you understand what's covered.
Anticipating your next vacation is a lot of fun. But with that fun comes the risk that your plans will fall through.
What happens to your prepaid travel arrangements if you cancel before you travel? It all depends on whether you purchased Trip Cancellation insurance.
How Does Trip Cancellation Work?
Trip Cancellation protection is an integral part of every comprehensive travel insurance. It protects your prepaid and non-refundable expenses if you must cancel your trip unexpectedly.
Add up all the prepaid, non-refundable travel arrangements you made. You can include things like airfare, cruise fare, train and bus tickets, rental cars, transfers, excursions, tours, and more.
Even if a hotel does not charge you until 72 hours before check-in, you would include that too. If you had to cancel within 48 hours of departure, you could recover that loss.
What Are Covered Trip Cancellation Reasons?
Every travel insurance policy includes a list of Covered Cancellation reasons. It provides a full refund if you cancel the trip for any of the named circumstances.
So, what kinds of circumstances does Trip Cancellation insurance cover or not cover? Not every policy covers the same situations, but almost all plans include the following list:
- Death, disease, or serious injury of traveler or family member
- Jury duty or subpoena
- Military deployment
- Mandatory quarantine detention*
- Fire, flood, burglary or natural disaster at your home or destination
- Traffic accident on the way to airport/cruise port
- Strike of common carrier workers
- Inclement weather interfering with common carrier operations
- Military called to service for natural disaster
- Bankruptcy of airline, cruise line, tour operator or other travel providers
- Terrorism at destination
- Victim of felonius assault
*Quarantine does not include stay-at-home or shelter-in-place orders, or government-issued travel bans/advisories.
Here are some of the more comprehensive cancellation reasons:
- Host living abroad becomes gravely ill or dies
- Evacuation orders at destination due to natural disaster or adverse weather
- Hurricane warning issued for destination
- School year extends beyond pre-defined year
- Delayed 50% or more of trip length by common carrier
- Airport security breach
- Air travel or control tower shut down
- Roadway obstruction or closure
- Mechanical failure of common carrier
- Called for organ donation
- Overseas child adoption curtailed
Again, not every policy covers each reason named above. Check the policy certificate to see if it includes the coverage you need.
Some policies cover pregnancy and attending childbirth, but only if the pregnancy occurs after purchasing the policy. Generally, we recommend Cancel For Any Reason coverage for pregnancy-related concerns.
Does It Cover Work Cancellations?
Many policies cover work-related Trip Cancellation. Be sure to check the policy's covered cancellations terms. We refer to these situations as Cancel For Work Reasons:
- Involuntary termination after you made your travel plans
- Employer rescinded previously-approved vacation
- Directly involved in company merger
- Revocation of military leave
- Employer transfers you to a distant location
- Place of employment suffers burglary or natural disaster
Suppose you paid a deposit for a vacation rental on a Greek island that's six months away. But three days before you're supposed to leave for Athens, something dreadful happens at work. They need you to stay and help during the crisis. That's incredibly disappointing, especially since you cannot get a refund on the vacation rental deposit.
Fortunately, Trip Cancellation protects the non-refundable deposit if you cancel the trip for a reason listed in your policy. In this case, if your plan covers "required to work" cancellation, then you are all set—except for the fact that you'd be stuck in the office and not enjoying the warm Greek sun.
Each policy has different requirements for Cancel For Work Reasons. For example, some plans require only one continuous year of service to cover termination. Other policies may require three or five years of service.
If there is a particular circumstance you want to cover, check the policy certificate, or ask one of our licensed travel insurance agents.
Want More Cancellation Reasons Covered? Get Cancel for Any Reason
Generally, Trip Cancellation insurance covers reasons for cancellation that aren't your fault and were unavoidable.
If you want the freedom to cancel for no reason, look for policies that offer Cancel For Any Reason benefits.
Let's consider another scenario. You paid a deposit for a villa in France and bought airline tickets for a trip next Fall. Two weeks beforehand, civil unrest erupts in Paris, and a bombing occurs in the subway.
The authorities managed the situation, and life goes back to normal for Parisians. But you feel uncomfortable about taking the trip. Cancel For Any Reason travel insurance allows you to recuperate 75% of your rental and airfare expenses.
Cancel For Any Reason insurance has a few rules. First, you have to buy the insurance within 10-21 days of your initial trip deposit. That means the very first dollar you spend toward the trip.
Second, insure 100% of all prepaid, non-refundable travel arrangements. Third, you must give at least 48 hours notice if you use Cancel For Any Reason. You cannot use it last minute.
Finally, you have to be fit to travel the day you buy the policy. If you're currently recovering and bought the insurance in case you do not heal in time for the trip, it will not pay any benefits.
How Much Trip Cost To Cover?
You can calculate your Trip Cost by adding all of the prepaid, non-refundable travel arrangements. We recommend covering 100% of your Trip Costs with the policy because many benefits are Time Sensitive.
Time sensitive policies include extra benefits at no cost if you buy it within 10-21 days of your Initial Trip Deposit. Pre-existing Condition coverage, Cancel For Any Reason, and bankruptcy/default of a travel supplier are three examples of Time Sensitive benefits. If you buy your policy after those three weeks, it will not cover any of those benefits.
If you do not need a Time Sensitive benefit, then you may cover any amount less than 100% that suits you. If you only need Medical Insurance, you can use a $0 Trip Cost. But most policies will not cover Pre-existing Conditions with a $0 Trip Cost, even if you bought it within the Time Sensitive Period (10-21 days of deposit).
Want to learn more? AARDY helps you compare quotes from major travel insurance carriers in seconds. We have answers to your questions about Trip Cancellation and more. Start a chat with us, send an email, or call us if you have any concerns.