Am I covered if I need to cancel a trip?
As much fun as planning a vacation is going on the trip is even better. Unfortunately sometimes life interferes with our plans. So what happens if you need to cancel a trip before you leave or return home earlier than you intended? Are you covered if you cancel a trip? Are you out all that money? Are you on the hook for return expenses? That depends.
If you purchased travel insurance when you booked your trip or have an ongoing policy your insurance may help you out. Travel insurance comes in many forms including travel medical trip cancellation trip interruption lost baggage and more. What’s important here are the trip cancellation and trip interruption coverage.
What is trip cancellation and trip interruption coverage?
The difference between the two is in timing. Trip cancellation coverage provides reimbursement when you must cancel the trip before your departure date. Trip interruption coverage provides the same when you must return home partway through your trip.
Trip cancellation and trip interruption travel insurance will cover expenses related to the cancellation or interruption of your trip. That includes things like airfare accommodation cancellation fees and more. This will vary depending on the policy as will the amount you’re eligible to receive as payment. Your broker can help you decide which policy is best for you based on your needs.
The following are just a few of the scenarios that can be covered by trip cancellation and trip interruption travel insurance:
- A personal medical or dental emergency
- A death or major illness in your family
- The person you are travelling with has a change of plans due to a personal or family emergency
- Your destination has an extreme weather warning such as a hurricane or flood
- The tour company or airline you booked with goes out of business
- You lost the financial resources needed to take the trip (i.e. you lost your job)
It’s important to note that not every circumstance is covered by trip cancellation and trip interruption insurance. You will not be covered if you could have been reasonably informed that you may have to cancel a trip or go home partway through. What does that mean exactly?
Many travel insurance companies use official government websites such as the Government of Canada’s Travel Advice and Advisories website as their basis of “reasonably informed.” If a recommendation or precaution is listed there before you book your vacation and you cancel or interrupt your trip on account of one of those listed items you will not receive compensation. If it is not listed however or is added after you book your trip you would be covered.
For example let’s say in March you book a trip to Colombia for September. In July you decide to cancel the trip because you’re worried about the Zika virus. You would not receive compensation from your trip cancellation insurance because the Canadian Government had warned of the virus before you booked your trip. However let’s say you cancelled your trip due to a different new illness that you were concerned about and the government recommended caution about. You would be covered as this illness was not listed at the time that you booked.
When it comes to personal emergencies the determining factor on whether you’ll be covered or not is if you knew before you booked your trip that you may have to cancel. For example let’s say you book that same vacation to Colombia. Your grandmother has been in very ill health for a while before booking. Unfortunately she passes away three days after you began your trip. Due to her poor health before you booked the trip you would likely not be covered by your trip interruption insurance. However let’s say a different family member passed away suddenly or due to an accident. This would be covered.
The important thing is to talk to your broker about your policy and determine exactly what is covered. Some travel insurance companies are more lenient than others when it comes to “reasonably informed.” It’s important to find a policy that fits you and your travels.
What about the travel insurance provided by an employer or credit card?
Some people may have travel insurance provided by their company or through their credit card. The most important thing is to ensure you understand this coverage including the limits on it when it comes to number of travel days covered and dollar amount you will receive in the event of a claim and what is exactly covered. Ensure that this insurance provides enough coverage for your travels and that you’re not relying on too basic of coverage. To learn more about credit card travel insurance click here .
No matter your situation talking to your broker about your travel insurance options is a great place to start. If nothing else you’ll want to understand any coverage you do have and what’s available to you.