What are trip cancellation and trip interruption insurance?
Trip Cancellation Insurance will reimburse you for the amount of pre-paid, non-refundable travel expenses (e.g. airline, cruise, train, hotel, etc.) that you have insured, should you cancel your trip before departure for an unforeseen covered reason.
Trip Interruption Insurance is similar to cancellation coverage, but covers you while you are on your trip for a list of covered reasons. In case of a covered reason you are required to return home, Trip Interruption Insurance will reimburse you for the lost portion of your trip, as well as any additional expenses for a last-minute flight home.
Trip Cancellation and Trip Interruption Insurance are often sold together as a bundle. You can also add Travel Medical Insurance to the bundle.
How does Trip Cancellation and Trip Interruption Insurance Work?
Here are two examples of how Trip Cancellation and Trip Interruption Insurance works:
Rob and his wife Leslie are planning a Caribbean cruise vacation from Miami, and they’re wondering if they should buy Trip Cancellation Insurance. The trip will be expensive, and they will have to pre-pay for a number of things in advance, most of which will be non-refundable — such as airfare and the cost of the cruise.
They are worried that should they have to cancel their trip before they leave, they would completely lose the money that they have pre-paid for the non-refundable parts of their trip. And it could take years before they could save that much money again to take the same trip.
Leslie suggests they purchase Trip Cancellation Insurance. She finds a policy she likes because it will reimburse her and Rob for the full amount of pre-paid, non-refundable travel expenses that they have insured, should they have to cancel their trip before departure for an unforeseen event covered under the policy.
A week before they are scheduled to leave on their trip, Rob breaks his leg in a skiing accident. His doctor deems him unfit to travel. So they make a claim under their Trip Cancellation Insurance and receive a full reimbursement of their pre-paid travel expenses.
Linda and Vince are thinking of purchasing Trip Interruption Insurance for their upcoming European holiday.
Trip Interruption Insurance is similar to Trip Cancellation Insurance, but the former covers insured travellers for unforeseen events that occur after a trip has begun, rather than before it starts. If they have to return home for a covered reason, Trip Interruption Insurance will reimburse Linda and Vince for the lost portion of their trip, as well as for any additional expenses for a last-minute flight home.
Since Trip Interruption Insurance can be purchased along with Trip Cancellation Insurance, Linda and Vince decide to get both at the same time so that they will be protected should an unforeseen covered event cause them to have to cancel their trip or end it prematurely.
Are there any conditions not covered with Trip Cancellation and Trip Interruption Insurance?
Trip Cancellation and Trip Interruption insurance covers you for the perils listed in the Description of Coverage. This does not cover events known to you at the time you buy the insurance. In other words, if what was expected causes a claim, your claim will not be covered. It also does not cover things like getting detained by customs and missing your flight, cancelling because of a work obligation, and cancelling due to an illness or injury related to a pre-existing medical condition that is not covered.
Coverage for some pre-existing medical conditions is available under most Trip Cancellation and Trip Interruption Insurance policies, but the condition usually needs to be stable for a specific period of time prior to buying the insurance and it must take “a turn for the worse” after to qualify for coverage. Depending on the insurer, you may have to purchase your Trip Cancellation and Trip Interruption Insurance within a certain period of time before you depart – typically before the cost of what you are insuring is non-refundable (e.g. when cancellation fees for cruises or hotels take effect).