Travel insurance is a must-have for any avid traveler, regardless of the destination or mode of transportation. One key aspect of travel insurance that is often overlooked is cancellation cover. Cancellation cover is a type of travel insurance that protects you in the event that you need to cancel your trip due to unforeseen circumstances.
If you enjoy traveling often, or you book expensive vacations, you may have considered purchasing a travel insurance policy in case you have to cancel your trip. According to an AAA Travel survey, 88% of Americans who purchase travel insurance say that trip cancellation protection is the most valuable benefit they receive from these policies.
While trip cancellation insurance can help reimburse you in the event you have to cancel your trip, it won’t cover every possible problem. Before you purchase a policy it’s important to understand what it does and doesn’t cover.
In this article, we’ll explore what cancellation cover means on travel insurance and why it’s important to have it.
What is Cancellation Cover?
Cancellation cover is a type of travel insurance that provides protection if you need to cancel your trip due to unforeseen circumstances. These circumstances can include illness, injury, or death of the policyholder or a close family member, natural disasters, terrorism, or other unexpected events that prevent you from traveling.
Cancellation cover typically reimburses you for non-refundable expenses associated with your trip, such as airfare, lodging, and activities. The amount of reimbursement you receive will depend on the terms of your policy and the specific circumstances of your cancellation.
If you’re unable to take a trip due to an unforeseeable event, a trip cancellation policy will reimburse you for your prepaid, forfeited and non-refundable costs. Depending on the plan, your policy will help cover costs up to the time and date of your departure.
Trip cancellation insurance is often sold as an optional coverage to a base travel insurance policy, but some travel insurance companies sell trip cancellation as a standalone policy. Some basic trip cancellation policies allow you to purchase additional coverage types, such as cancel for any reason coverage.
Why Do You Need Cancellation Cover?
While no one wants to think about having to cancel their trip, the reality is that unexpected events can happen at any time. Without cancellation cover, you may be left with hefty financial losses if you need to cancel your trip.
For example, let’s say you’ve booked a trip to Europe and paid for your airfare, hotel, and tours in advance. A week before your trip, you become ill and are unable to travel. Without cancellation cover, you would be responsible for paying the non-refundable fees associated with your trip, which could add up to thousands of dollars.
With cancellation cover, however, you can rest assured that you won’t be financially responsible for non-refundable expenses if you need to cancel your trip due to unforeseen circumstances.
What Does Trip Cancellation Insurance Cover?
While rules and coverage limits vary by policy type and insurer, here are some examples of problems commonly covered by trip cancellation insurance:
Any serious injury or unforeseen medical condition that makes you or your travel companion unfit for travel (by order of licensed physician).
- The death of you or your traveling companion, or the death of a non-traveling family member.
- Strikes or severe weather that result in travel services being unable to operate.
- Unforeseen natural disasters at home or at the destination that make them uninhabitable.
- A legal obligation such as jury duty or being served with a court order or subpoena.
- Also noteworthy is that some trip cancellation insurance policies may include a trip delay or trip interruption benefit. With a trip delay benefit, the policy can pay for short-term unexpected delays to your travel, which can include meals, accommodations and transportation costs. A trip interruption benefit may help cover costs in the event your trip is cut short due to a problem covered by the policy.
Since policies can vary drastically, it’s wise to carefully review the reasons covered by the policy, to avoid surprises later. You’ll also want to understand the definition of terms in the policy. For example, “immediate family member” and “family member” may mean two completely different things under the policy’s guidelines.
How to Choose the Right Cancellation Cover Policy
When choosing a cancellation cover policy, there are a few key factors to consider:
1.Coverage Limits: Make sure the policy you choose provides adequate coverage for your needs. Review the policy’s coverage limits to ensure they are sufficient to cover any non-refundable expenses associated with your trip.
2.Covered Reasons: Check the policy’s list of covered reasons to ensure it includes the events that are most likely to cause you to cancel your trip, such as illness, injury, and death of a family member.
3.Exclusions: Review the policy’s exclusions carefully to ensure there are no surprises if you need to make a claim. For example, some policies may exclude coverage for pre-existing medical conditions or certain types of natural disasters.
4.Premiums: Consider the cost of the policy and whether it fits within your budget. Keep in mind that while a cheaper policy may seem like a good deal, it may not provide adequate coverage for your needs.
Conclusion
Cancellation cover is an essential aspect of travel insurance that can protect you from financial losses if you need to cancel your trip due to unforeseen circumstances. When choosing a cancellation cover policy, be sure to review the coverage limits, covered reasons, exclusions, and premiums to ensure you select the right policy for your needs. With cancellation cover in place, you can travel with peace of mind knowing that you’re protected in case unexpected events arise.
