As a travel insurance expert, I often get asked whether travel insurance covers non-refundable tickets. The short answer is yes, but there are some important caveats to understand. In this article, we’ll dive into the details of how travel insurance can protect your non-refundable tickets and what you need to know before purchasing a policy.
What Is Trip Cancellation Insurance?
Trip cancellation insurance is a key component of most comprehensive travel insurance policies. It reimburses you for pre-paid, non-refundable travel expenses if you need to cancel your trip for a covered reason. This can include the cost of non-refundable airline tickets, hotel stays, cruises, tours, and more.
Some of the most common covered reasons for trip cancellation include:
Illness, injury or death of you, a traveling companion, or a close family member
Jury duty or being required to give testimony in court
Cancellation of your tour by the tour operator
Severe weather or natural disaster that renders your pre-paid
accommodations uninhabitable
Theft of travel documents like your passport
Involuntary termination of employment
It’s important to note that trip cancellation insurance has certain exclusions. For example, it typically doesn’t cover cancellations due to pre-existing medical conditions, travel for work purposes, or changing your mind about taking the trip.
The policy also has a maximum coverage limit, so you won’t be reimbursed for more than what you paid for the trip.
SEE ALSO: How to Claim Aig Travel Insurance
How Much of My Trip Can I Insure?
When purchasing trip cancellation insurance, you can typically insure up to 100% of your pre-paid, non-refundable trip costs. This includes the cost of your airline tickets, hotel stays, cruises, tours, and any other non-refundable expenses you’ve paid for in advance.
However, there are a few important caveats:
You can only insure the portions of your trip that are non-refundable. If you’ve booked a refundable airline ticket or hotel stay, you don’t need to insure those portions of your trip.
You can’t insure more than you’ve paid for the trip. For example, if your airline ticket cost $500 but you insure it for $1,000, the insurance company will only reimburse you up to the $500 you actually paid.
Some policies have maximum coverage limits per person or per trip.
For example, a policy may have a $10,000 per person limit or a $50,000 per trip limit. Anything over those limits won’t be covered.
When Should I Purchase Trip Cancellation Insurance?
It’s generally recommended to purchase trip cancellation insurance as soon as you start paying for your trip. That’s because most policies have a pre-existing condition exclusion waiver that requires you to purchase the policy within a certain time frame, often 10-21 days, of making your initial trip deposit.
If you wait too long to purchase the policy, you may not be able to get coverage for pre-existing medical conditions. And if you develop a medical condition after purchasing the policy but before your trip, that condition would be considered pre-existing and may not be covered.
What If I Need to Cancel for A Reason Not Covered by Insurance?
If you need to cancel your trip for a reason that’s not covered by your trip cancellation insurance, you won’t be able to file a claim. However, some policies offer an optional “Cancel for Any Reason” (CFAR) upgrade.
CFAR coverage allows you to cancel your trip for any reason, even if it’s not covered by the standard policy. However, there are some important limitations:
You typically have to purchase CFAR within 10-21 days of making your initial trip deposit
CFAR only reimburses you for 50-75% of your pre-paid, non-refundable trip costs
CFAR is more expensive, often adding 40-50% to the cost of your premium
Even with those limitations, CFAR coverage can provide valuable peace of mind if you’re worried about needing to cancel your trip for a reason not covered by the standard policy.
What If I Need to Interrupt My Trip?
In addition to trip cancellation coverage, most comprehensive travel insurance policies also include trip interruption coverage. This reimburses you for the unused, non-refundable portion of your trip if you need to cut your trip short for a covered reason, as well as the additional transportation costs to return home.
Some common covered reasons for trip interruption include:
Illness, injury or death of you, a traveling companion, or a close family member
Severe weather or natural disaster that makes your destination uninhabitable
A terrorist incident at your destination
Bankruptcy or default of your travel provider
If you need to interrupt your trip for a covered reason, your travel insurance policy will reimburse you for the unused portion of your trip, up to the policy’s maximum coverage limit. This can help recoup some of the costs of non-refundable airline tickets, hotel stays, and other pre-paid expenses.
Conclusion
In summary, trip cancellation insurance can provide valuable protection for your non-refundable airline tickets and other pre-paid travel expenses. By purchasing a comprehensive travel insurance policy, you can get reimbursed for your trip costs if you need to cancel or interrupt your trip for a covered reason.
