Trip Cancellation Insurance: What You Need to Know

When you’re booking a big trip, especially one with nonrefundable expenses like flights or hotel stays, trip cancellation insurance is worth considering. This coverage protects your financial investment if an unforeseen event forces you to cancel your plans. However, it’s important to understand what qualifies for coverage—and what doesn’t.

What Is Trip Cancellation Insurance?

Trip cancellation insurance, often included in comprehensive travel insurance or offered as a perk with some premium credit cards, reimburses prepaid, nonrefundable trip costs if you need to cancel due to a covered reason. Covered expenses typically include flights, hotel bookings, and other trip-related reservations.

Each policy has specific conditions outlining what counts as a valid reason for cancellation. For example, sudden illness, severe weather, or jury duty might qualify, but personal preference—like deciding not to travel due to rising COVID-19 cases—likely won’t.

Want the ultimate flexibility? Consider adding Cancel For Any Reason (CFAR) coverage to your policy. While it costs extra, CFAR allows you to cancel your trip for any reason and recover up to 75% of your expenses as long as you cancel at least two days before departure.

Covered Reasons for Cancellation

Imagine you’ve booked a $5,000 Italian getaway with nonrefundable flights, hotels, and excursions. One week before departure, you break your leg. With trip cancellation insurance, you can recover the full cost of your prepaid reservations, provided you insured the entire trip and the cancellation falls under a covered reason.

Common covered reasons include:

• Illness, injury, or death of the traveler or a traveling companion.

• Severe weather that disrupts travel plans.

• Jury duty or subpoena.

• Terrorist incidents at your destination.

• Job termination or financial insolvency of your travel provider.

While policies differ, the cancellation typically must result from unforeseen and extraordinary circumstances. Be sure to review your policy’s fine print to understand exactly what qualifies. You’ll also need to provide documentation, such as medical records or proof of job loss, when submitting a claim.

What Isn’t Covered?

Trip cancellation insurance has its limits. It won’t reimburse you for:

• Losses due to foreseeable events or self-harm.

• Acts of war or terrorism outside the scope of coverage.

• Injuries sustained during high-risk activities like skydiving or bungee jumping.

• Routine dental or medical treatments.

• Childbirth or pregnancy-related cancellations if the policy was purchased after conception.

For full details, consult your policy and ensure your coverage matches your needs.

Ready to buy travel insurance?

Trip cancellation insurance provides peace of mind for travelers facing the unexpected. By understanding what’s covered—and what’s not—you can make informed decisions about protecting your trip. For even greater flexibility, consider CFAR coverage to recover costs from cancellations outside standard policy limits.

Protect Your Trip Today!
Compare travel insurance companies, explore policies, and get quotes at Squaremouth. If you purchase through this link, Wunderbird earns a small commission—thank you for your support!

👉 Affiliate Link: Squaremouth
👉 Travel Partner ID at Checkout: 22443

Thank you for choosing travel insurance and traveling with confidence!