What is Trip Cancellation Insurance?
Trip cancellation insurance is a benefit of a trip insurance plan that helps protect you from financial losses if your trip is unexpectedly canceled. It reimburses you for prepaid, nonrefundable expenses such as flight tickets, tour bookings, and hotel reservations, if you have to cancel your trip for a covered reason.
Common Reasons Why You May Need Trip Cancellation Insurance
When plans fall through, trip cancellation insurance helps you recover some of the costs and avoid further stress during an already difficult situation. It is designed to cover a wide range of unforeseen events that force you to cancel your trip before you depart. Here are some of the most common reasons:
- Medical Emergency: A sudden, serious illness or injury to you, a travel companion, or a family member.
- Bereavement: The unfortunate demise of a close relative before your trip begins.
- Natural Disasters: If a hurricane, flood, or wildfire affects your home or destination.
- Severe Weather Disruptions: If dangerous weather grounds flights or closes airports.
- Unforeseen Job Loss: Being laid off from your job after you've booked your trip.
What Does Trip Cancellation Insurance Cover?
It's not fun to imagine canceling your vacation before it even begins. But trip cancellation insurance makes sure that if something does go wrong, you don't also face the financial blow of losing your nonrefundable bookings. Think of it as a safety net that catches you when plans fall apart. Trip insurance acts as a financial safeguard for your investment in case you need to cancel your trip for a covered reason.
Does Trip Insurance Cover Canceled Flights?
One of the biggest questions travelers ask is, "Will my insurance cover a canceled flight?" The answer is yes, but only if the cancellation is tied to a covered reason. For instance, if a winter storm grounds your flight, your insurance can help reimburse the extra hotel night or meals while you wait for rebooking. This is often covered under a 'Trip Delay' benefit.
Trip insurance is likely to reimburse you for nonrefundable costs if your flight is canceled due to a covered reason, such as:
- Severe weather
- Mechanical failure of the airline
- Strikes affecting the airline or transportation service
- Medical emergencies before departure
What's Not Covered by Standard Plans? Common Exclusions
While trip cancellation insurance offers valuable protection, it's important to understand that it doesn't cover every situation. It's equally important to know which types of reasons for cancellations are not covered, so there are no surprises later. Some common exclusions include:
- Canceling because you changed your mind: Simply deciding you no longer want to travel is usually not a covered reason. Insurance is designed to protect against unforeseen events, not personal preference changes. For this type of flexibility, you might consider adding Cancel For Any Reason (CFAR) coverage.
- Known or foreseeable events at the time of booking: If you book a trip knowing about certain risks or issues, such as a pre-planned surgery or a scheduled work event, and then cancel because of those, your policy would exclude the claim. Insurance covers unexpected problems, not those you already anticipated when making your plans.
- Pre-existing conditions (unless a waiver is purchased): Most trip cancellation policies exclude cancellations related to medical conditions that existed before you bought the policy. However, some insurers offer a pre-existing condition waiver if you meet certain criteria, like purchasing coverage shortly after your initial trip deposit.
- Travel disruptions from elective procedures: If your cancellation is due to elective or cosmetic medical procedures that you planned before the trip, these generally won't be covered. The insurance focuses on emergencies and unforeseen medical events rather than planned treatments.
Understanding these exclusions upfront can help you select the best plan and avoid surprises if you need to cancel your trip.
Understanding Cancel For Any Reason (CFAR) Coverage
Sometimes your reason for canceling doesn't fit neatly into a policy's list. Maybe you're uneasy about traveling because of rising health risks, or you just don't feel comfortable anymore. Cancel For Any Reason (CFAR) coverage gives you the freedom to cancel your trip for virtually any reason, with partial reimbursement for your prepaid trip costs.
CFAR is an optional upgrade that allows you to cancel your trip for any reason at all, including:
- Fear of traveling due to rising health risks
- Change of heart or personal preferences
- Concerns over safety or politics at your destination
This type of coverage is ideal for travelers who want the ultimate flexibility and peace of mind.
To purchase the CFAR add-on benefit, there are caveats in place:
- You typically must purchase it within a set time after your initial trip deposit (usually within 21 days).
- You'll usually receive reimbursement of up to 50–75% of your insured trip cost, should you use CFAR and cancel your trip.
- You will need to cancel your trip at least 48 hours before the departure date to take advantage of this benefit.
Trip Cancellation Insurance vs Cancel For Any Reason (CFAR): Which One Is Right For You?
Understanding the difference between standard trip cancellation insurance and Cancel For Any Reason (CFAR) coverage can help you choose the right protection for your travel investment. Use this comparison to decide which option best suits your travel needs.
| Feature | Trip Cancellation Insurance | Cancel For Any Reason (CFAR) |
|---|---|---|
| What it covers | Only specific reasons listed in your policy | Any reason, even those not listed in the policy |
| Examples of covered reasons | Illness, injury, death, natural disaster, job loss, etc. | Any reason not covered by standard plans. Fear of travel, changing your mind, political unrest at the destination, etc. |
| Flexibility | Reasons for cancellations are limited to the listed events | High flexibility, voluntary cancellations are not an issue |
| Cost | Included in base trip insurance | An optional add-on for an extra premium cost |
| Reimbursement amount | Up to 100% of nonrefundable expenses | Typically, 50 to 75 % of nonrefundable expenses |
| Purchase window | Can be purchased right up to the departure date | Must be purchased within 21 days of your initial deposit |
| Best for | Travelers with fixed plans and specific concerns | Travelers who want maximum flexibility and peace of mind, traveling with uncertainties, and/or have invested heavily in the trip |
| Deadline for cancellation | Can be cancelled up until the time of departure | Needs to be cancelled at least 48 hours ahead of the departure date |
How to Choose the Right Trip Cancellation Plan
Choosing the right trip cancellation plan can feel overwhelming, but keeping a few key points in mind can make it easier. These three simple questions can help you:
- What are the risks I'm most concerned about?
- Do I need the added flexibility of CFAR?
- Am I protecting my full trip cost?
Buying early can unlock more benefits, like CFAR eligibility and pre-existing condition waivers. And if you're not sure, our team is here to walk you through it.
Best Trip Cancellation Insurance Plans
Here are our top-of-the-line recommendations for the best trip insurance plans, which should suffice your needs for flexibility around travel.
Choose the Appropriate Trip Insurance Plan with Visitors Coverage
VisitorsCoverage offers an excellent selection of trip insurance options to fit your unique requirements. You can compare trip insurance plans on our platform to find a plan that offers the right coverage and benefits for your trip.
For specific questions regarding trip insurance or the related jargon, please do not hesitate to contact our customer success team. We're always here to help and simplify the complex insurance landscape for you.
Get Quotes for Trip InsuranceFrequently Asked Questions About Trip Insurance
What does trip cancellation insurance cover?
Trip cancellation insurance is a part of trip insurance that helps you recover prepaid, nonrefundable trip costs if you have to cancel your trip due to unexpected events. These covered reasons vary by policy but commonly include illness, injury, death of a family member, natural disasters, or other emergencies outlined in your plan. Always check your policy documents to understand the full list of covered reasons before purchasing.
Does travel insurance cover trip cancellation?
Trip insurance typically includes trip cancellation coverage, but it's important to note that standalone travel medical insurance plans usually do not cover trip cancellation. If you want financial protection against losing prepaid trip expenses due to cancellations, you'll need a trip insurance plan that specifically includes trip cancellation benefits.
Does trip insurance cover canceled flights?
Coverage for canceled flights often falls under trip interruption rather than trip cancellation. Trip insurance may reimburse you for missed connections or unused trip portions if your flight is canceled due to covered reasons like severe weather, airline strikes, or mechanical failure. However, cancellations due to voluntary changes or airline policy refunds are generally not covered.
What are the common covered reasons for trip cancellation?
Covered reasons can vary between policies but often include serious illness or injury to you or a family member, death of a travel companion, natural disasters at your destination or home, job loss, jury duty, quarantine orders, or travel advisories. Be sure to review your plan's terms carefully to know which situations qualify.
How much does trip cancellation insurance cost?
Trip cancellation insurance usually costs between 5 and 10 percent of your total prepaid trip expenses. The exact price depends on factors such as your age, trip cost, destination, and any optional upgrades like Cancel For Any Reason (CFAR) coverage, which increases flexibility but also the premium.
What documents do I need to file a trip cancellation claim?
To file a claim, you generally need proof of your prepaid, nonrefundable expenses, such as receipts or invoices. You'll also need documentation supporting your reason for cancellation, for example, a doctor's note, death certificate, employer letter, or official quarantine notice. Keep all travel and medical documents organized to make the claim process smoother.
Can I get reimbursed if I cancel for COVID-related reasons?
Reimbursement for COVID-related cancellations depends on your specific policy. Some trip insurance plans cover COVID-19 illness or quarantine as a covered reason. Others may not, unless you add Cancel For Any Reason (CFAR) coverage, which offers broader protection, including cancellations due to concerns about health risks or travel restrictions related to COVID.
