What Is Trip Cancellation Insurance?

What Is Trip Cancellation Insurance?
  • Trip cancellation is only available with trip insurance, not travel medical insurance.
  • Most of the plans are available for U.S. or Canadian residents.
  • Basic trip coverage generally includes trip cancellation, trip delay, trip interruption, baggage loss/delay, emergency medical coverage.
  • The pricing and cost of a trip insurance policy depends on the trip cost and age of the traveler.

Trip cancellation insurance is a benefit of a trip insurance plan that protects you from certain financial losses that could occur if your trip gets canceled unexpectedly due to certain unforeseen events.

This can come in handy if you need to cancel your travel plans due to a covered reason under your plan and have invested nonrefundable expenses.

What Is Trip Cancellation Insurance?

Trip cancellation insurance will reimburse you up to the benefit maximum for prepaid and nonrefundable expenses if you have to cancel your trip due to a covered reason.

Learn more about what is considered a prepaid and nonrefundable trip expense.

What Does Trip Cancellation Insurance Cover?

What trip cancellation insurance covers will vary from plan to plan, so you'll want to read the plan details and policy fine print before buying trip insurance.

Here are some typical covered reasons that trip cancellation insurance covers:

  • Family or travel companion illness
  • Death of a travel companion or family member
  • Damage to your house due to a natural disaster, such as a flood, fire or earthquake
  • Complete cessation of travel services due to strike
  • Terror strike in your destination country
  • You or your companion are affected by a job termination or a layoff Inclement weather
  • You or your travel companion becomes pregnant and is not allowed to travel during pregnancy
  • You or your travel companion is quarantined
  • You or your travel companion is summoned to appear in court

What Is a Covered Reason for Trip Cancellation?

The covered reasons for trip cancellation under a standard trip insurance plan will vary depending on the insurance company and the description of coverage of the plan. Additionally, whether or not your cancellation reason is covered is at the discretion of the insurance company.

Here’s an example of a potential situation in which trip cancellation may be covered: say you and your spouse planned a trip to Hawaii. You picked your flight, got hotel rooms and even rented a car. Unfortunately, your spouse gets sick a day before your departure. If you don't have trip insurance, canceling the trip might be costly. However, if you've purchased trip cancellation insurance, you may be able to recoup financial losses for your insured prepaid and nonrefundable expenses.

Trip Cancellation Insurance vs Cancel For Any Reason 

With basic trip insurance, the reasons you can cancel your trip and recoup some financial losses are limited to those reasons explicitly listed as covered in your plan documents.

If you decide that you just don't feel like traveling or are concerned about a recent illness spike in your destination country, basic trip cancellation coverage won’t likely protect your investment.

However, most trip insurance plans offer an optional Cancel For Any Reason (CFAR) benefit which can be added for an additional fee. Adding Cancel For Any Reason insurance to your trip insurance means that you can cancel your trip for literally any reason and still be reimbursed for certain prepaid travel expenses that would have otherwise been nonrefundable.

The Cancel For Any Reason insurance benefit has a time sensitive period to purchase, which varies by plan. Typically, adding CFAR on your travel insurance plan during the application process must be done within 15-21 days from your initial trip deposit date.

Why You Need Trip Cancellation Travel Insurance

Whether you opt for the basic trip cancellation coverage that comes with trip insurance, or the more expansive coverage that CFAR insurance offers, it’s wise to get some type of trip cancellation insurance, especially for the following reasons:

  • Expensive trips: If you’re going on an expensive trip, it’s always a wise decision to insure yourself in case you need to cancel the trip. This will help you protect yourself against the financial loss that you might face due to cancellation of the trip.
  • Travel plans made in advance: If you’ve booked your travel tickets far in advance of your departure date, the chances of an unforeseen incident may be higher.
  • Cruises: It can be hard to cancel a cruise and still recoup prepaid expenses. Trip cancellation coverage would give you peace of mind, knowing that you’re covered against unforeseen incidents.
  • Traveling with kids: Kids can get sick unexpectedly. If you have to cancel your trip due to a child's illness, insurance can protect your investment.

If you have any questions about trip cancellation or Cancel For Any Reason Insurance, visit our extensive knowledge center to learn more or reach out to our award-winning Customer Success Team for help.

Frequently Asked Questions


What does trip cancellation insurance cover?

Trip cancellation is a benefit of trip insurance that can help you recoup prepaid nonrefundable trip costs in the event of having to cancel your trip due to covered reasons as specified in your policy’s wording.


Does travel insurance cover trip cancellation?

Trip insurance covers trip cancellation, however trip cancellation insurance is not included in travel medical insurance plans.


What is the best trip cancellation insurance?

The best trip cancellation insurance will depend upon your individual needs. Compare trip insurance plans to find the right policy for you.


Does trip insurance cover canceled flights?

Trip insurance may offer coverage for canceled flights as a trip interruption benefit under certain circumstances.


What is a covered reason for trip cancellation?

Covered reasons vary from plan to plan but can be found in your policy’s description of coverage.