If you frequently travel or take expensive vacations, you may have thought about getting travel insurance in case you need to postpone your trip. Trip cancellation protection is regarded by 88% of Americans who buy travel insurance as the most valuable perk of these policies, according to a AAA Travel poll.
Trip cancellation insurance won’t cover every conceivable issue, but it can help you get reimbursed if you have to cancel your trip. It’s crucial to know what a policy covers and doesn’t before you buy it.
What exactly is travel insurance?
A trip cancellation policy will pay you back for your pre-paid, forfeited, and non-refundable expenses if you are unable to go on your trip because of an unforeseen circumstance. Your policy may help with expenditures up to the time and date of your departure, depending on the plan.
However, some travel insurance providers also offer trip cancellation as a stand-alone policy. Trip cancellation insurance is sometimes offered as an additional coverage to a standard travel insurance policy. You may add more types of coverage, like cancel for any reason coverage, to some basic trip cancellation policies.
What is covered by trip cancellation insurance?
Here are some instances of issues typically covered by trip cancellation insurance, though regulations and coverage limits differ by policy type and insurer:
Any severe illness or unanticipated accident that renders you or your travel companion unsuitable to travel (by order of licensed physician).
the passing of a family member who isn’t traveling, you, your traveling companion, or both.
strikes or extreme weather that prevent travel services from running.
Unexpected natural disasters that render them uninhabitable either at home or at their destination.
a binding court order or subpoena, jury duty, or other legal responsibility.
It’s also important to understand that some policies for travel cancellation insurance might also cover trip delays or interruptions. With a trip delay benefit, the insurance can cover unexpected short-term delays to your vacation, including the expense of meals, lodging, and transportation. If your vacation is cut short due to an issue covered by the policy, a trip interruption benefit might be able to help with expenses.
To prevent unpleasant surprises in the future, it is advisable to carefully analyze the grounds covered by the policy because policies might differ greatly. You should also be familiar with the policy’s definitions of key terminology. According to the terms of the regulation, “family member” and “immediate family member” could signify two entirely different things.
What Does Trip Cancellation Insurance Not Cover?
While every tourist may have a different reason for postponing their trip, not all issues are covered. Generally speaking, issues that result from predictable circumstances are not covered by trip cancellation insurance. A circumstance that was possibly anticipated or recognized before it occurred is referred to as a foreseeable event. Basically, an occurrence is generally predictable if you’re buying insurance with a certain scenario in mind or an anticipated difficulty.
Consider buying trip cancellation insurance for a family trip to Cabo San Lucas when a hurricane is forecasted. Trip cancellation might not be covered by the policy.
Not all occurrences are excluded from travel cancellation insurance, including predictable ones. Here are a few more instances of issues that are often not addressed:
- intentional self-harm, attempted suicide, or suicide
- normal pregnancy, in vitro fertilization, childbirth, or choice abortion
- abuse or use of alcohol or other drugs
- illnesses of the mind or neurological system, such as sadness, anxiety, or psychosis
- Acts of war, declared or unproven war, and military service
- taking part in training and amateur or professional athletic events
- Failure of a carrier’s finances (such as an airline)
What Is the Price of Travel Cancellation Insurance?
You can anticipate paying between 5% and 10% of your trip expenses if you buy a fundamental travel insurance policy that covers trip cancellation. For instance, you might anticipate paying between $500 and $1,000 for a $10,000, nine-day trip across the Greek Islands.
Remember that choosing an insurance with “cancel for any reason” coverage can cost an extra 40% to 60% more than a regular policy, according InsureMyTrip.
Several other elements can affect how much a policy costs, including:
- Age of travelers: Generally, the cost of the insurance will increase as you get older. Because they frequently have more health issues and are more likely to file a claim, older travelers are considered to be riskier.
- Travel costs: The cost of a policy is determined by your nonrefundable and prepaid travel costs. Therefore, when looking for an insurance, it’s crucial to estimate all of the fees you’ll incur before leaving. Deposits for travel, lodging, and excursions may be included.
- Plan choice: Less expensive basic policies will provide fewer options for coverage. Basic policies, for instance, typically have lower medical emergency and trip cancellation thresholds. To avoid paying for coverage alternatives you won’t use, it’s crucial to choose only the advantages you require.
- The number of travelers: Your premium will increase as you insure more travelers.
- Vacation duration: The cost of a policy will vary depending on how long the trip is.
Travel insurance: Is it worthwhile?
Consider trip cancellation insurance if you’ve paid a significant amount of money toward nonrefundable travel expenses. Travelers who are worried about protecting the money spent on a trip due to unforeseen occurrences like natural catastrophes, an uncertain employment status, or a health problem might consider trip cancellation insurance.
Cassandra Brooklyn, the founder of EscapingNY, a global tour operator specialized in small group trips, says: “I recommend travel insurance to everyone because it’s designed to protect passengers from things they do not expect to happen leading up to a trip.”
Remember that trip cancellation insurance only covers issues covered by the policy. It won’t protect you against changing your mind or predictable occurrences like a pandemic that was already known.
You could not have other types of travel insurance coverage, such as emergency medical coverage or lost/damaged bag benefits, if you buy a basic trip cancellation policy. Depending on the travel insurance provider, you might be able to add these kinds of insurance coverages.
However, if money is limited, investing in trip cancellation insurance can provide you some peace of mind in case unanticipated circumstances arise before your departure.
“Getting a trip cancellation coverage is preferable than not buying a policy at all,” advises Brooklyn if purchasing a full plan is out of the budget.
