Travel insurance is an insurance type that covers you for unexpected events that may occur during your trip, such as cancellations, medical expenses, lost luggage, and more. It provides a safety net for unexpected events that could disrupt travel plans or result in extra expenses.
Typically, travel insurance policies cover a wide range of situations, depending on the type of plan and the insurance provider. However, in this guide, I’ll focus more on the trip cancellation side, what it covers and what not, and more. Be with me to learn more about the topic!
Trip cancellation coverage reimburses prepaid, non-refundable expenses if you cannot go on a trip because of an unexpected event.
This coverage protects you from losing money on things like flights, hotels, or tours you have already paid for but can no longer use. The unexpected events can be anything from minor issues to major problems, like if the airline cancels your flight.
However, the specific coverage and limits may vary depending on the type of travel insurance plan you choose and the insurance company. The policy typically covers expenses up to your trip’s scheduled departure date and time.
So, if something unexpected happens and you must cancel before your trip starts, this insurance can help you recover the costs you would otherwise lose.
Although the specific rules and coverage limits for trip cancellation may differ depending on the type of policy and the insurance company you choose, the following are some common examples of situations typically covered.
Always remember that some trip cancellation insurance policies may include extra benefits, such as trip delay and interruption coverage.
Trip delay coverage can cover expenses like meals, accommodations, and transportation if your trip is unexpectedly delayed. Trip interruption coverage can aid in covering costs if your trip gets cut short due to a covered problem.
You can be sure that you’re protected if your flight gets cancelled by the airline for any reason. The reasons for cancellation can vary and might include things like a pandemic, emergency evacuation, or if the airline decides not to allow more passengers on the flight. In such cases, you should be covered by your trip cancellation insurance.
Trip cancellation insurance may have certain exclusions, which means there are situations where the insurance coverage won’t apply. The following are some circumstances that are typically not covered.
If you had a medical condition or other issues before getting the insurance that led to the need for trip cancellation, you wouldn’t be reimbursed.
For example, suppose your doctor advised against air travel due to a recent surgery, and you booked a flight anyway and later had to cancel. In that case, the insurance won’t cover it because you were already aware of the risk.
If you were aware of a situation at your travel destination that could lead to trip cancellation (e.g., natural disaster, political unrest), but you still chose to book a flight and later cancelled it because of that reason, the insurance won’t reimburse you.
If you experience a reason for cancellation, it’s essential to inform your travel agency and insurer immediately. If you delay in notifying them, the reason for cancellation may no longer be considered valid, and you won’t be reimbursed.
Situations like announced strikes or organised disruptions by common carriers that affect all travellers from the same region, won’t be covered.
Cancellations due to government regulations or prohibitions are not covered.
Changes in the financial situation of the insured, travel partner, or insurer won’t be covered as a reason for trip cancellation.
The cost of trip cancellation insurance can be influenced by several factors:
Generally, the older you are, the higher the insurance cost. Older travellers are considered riskier because they may have more health issues and are more likely to make a claim.
The type of insurance plan you choose affects the cost. Basic policies with fewer coverage options are cheaper. For instance, basic plans may have lower limits for trip cancellations and medical emergencies.
TIP: You should pick a plan that includes only the benefits you need to avoid paying for coverage you won’t use.
Insuring more people increases the premium. If you have multiple travellers on the policy, the cost will be higher than insuring just one person.
The duration of your trip plays a role in the insurance cost. Longer trips may result in higher premiums.