Trip Cancellation Insurance – Forbes Advisor

If you like to travel frequently or 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 trip cancellation protection is the most valuable benefit they receive from these policies.

While trip cancellation insurance can help reimburse you if you have to cancel your trip, it won’t cover every possible problem. Before you buy a policy, it’s important to understand what it does and doesn’t cover.

Reading: Where can i buy trip cancellation insurance

see more: best travel insurance cfar 2022

what is trip cancellation insurance?

If you are unable to take a trip due to an unforeseen event, a trip cancellation policy will reimburse you for prepaid, lost 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 stand-alone policy. Some basic trip cancellation policies allow you to purchase additional types of coverage, such as cancellation for any reason coverage.

what does trip cancellation insurance cover?

Although coverage rules and limits vary by policy type and insurer, here are some examples of issues commonly covered by trip cancellation insurance:

  • Any serious injury or unforeseen medical condition that makes you or your traveling companion unfit to travel (by order of a licensed physician).
  • the death of you or your traveling companion, or the death of a non-traveling family member.
  • strikes or bad weather that prevent the operation of travel services.
  • unforeseen natural disasters in the home or destination that make it uninhabitable.
  • a legal obligation, such as jury duty or receiving a court order or subpoena.
  • It’s also worth noting that some trip cancellation insurance policies may include a benefit for trip delay or interruption. With a travel delay benefit, the policy can pay for unexpected short-term delays in your trip, which can include meals, lodging, and transportation costs. A trip interruption benefit can help cover costs in the event your trip is interrupted due to a problem covered by the policy.

    Since policies can vary drastically, it is advisable 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” can mean two completely different things depending on policy guidelines.

    What does trip cancellation insurance not cover?

    See also: A Financial Planner Explains How to Choose a Life Insurance Policy

    While each traveler may have a unique circumstance for canceling a trip, not all issues are covered. Generally, trip cancellation insurance does not cover problems arising from foreseeable events. a foreseeable event is a situation that may have been known or expected before it happened. Essentially, if you’re buying a policy with a certain situation in mind or an expected problem, it’s probably a foreseeable event.

    For example, let’s say you purchase trip cancellation insurance for a family vacation to Cabo San Lucas when a hurricane is on the way. Depending on the policy, trip cancellation may not be covered.

    foreseeable events are not the only events excluded from trip cancellation insurance. here are some other examples of some issues not normally covered:


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