Trip Cancellation Insurance: What Is it & What Does it Cover?

Key Takeaways

• Travel Cancellation insurance can reimburse 100% of your non-refundable expenses if you need to cancel your trip unexpectedly due to unforeseen events like illness, injury, or severe weather.
• Trip cancellation coverage can reimburse you for the full cost of your trip, including prepaid, non-refundable trip expenses like flights, hotels, rental cars, and more.
• This benefit strictly applies to the list of covered reasons listed in your plan certificate and doesn’t reimburse travel that you cancel by choice or on a whim. For that, you need a CFAR upgrade.
• Comprehensive travel insurance that includes Trip Cancellation insurance costs around $31 per day on average, according to our internal data.
• To find a trip cancellation policy, get started using our quote tool to compare coverage.

What is Travel Cancellation Insurance?

Travel Cancellation insurance reimburses up to 100% of your non-refundable, prepaid trip costs if you need to cancel your trip for a covered reason. It’s a pre-departure benefit, which means it starts the day after you purchase your policy and ends the day you leave for your trip.

Examples of commonly covered expenses include:

• Cancelled flights
• Prepaid hotels and vacation rentals
• Cruise payments, train tickets, and shuttle services
• Pre-paid excursions, tours, and event tickets (e.g., concert tickets)
• Cancellation fees

Trip cancellation coverage is triggered if you’re forced to cancel due to a sudden, unforeseen, and uncontrollable event that fits a list of covered reasons in your plan certificate. Reimbursement comes once you’ve submitted a claim, including receipts for all your bookings and other required paperwork like medical diagnoses, and received approval from your travel insurance provider.

Trip Cancellation insurance only reimburses prepaid, non-refundable trip costs. Any refunds you receive from your bookings, like a credit from your airline toward a future flight, are excluded.

What Does Trip Cancellation Insurance Cover?

Vacation cancellation insurance protects against unexpected events out of your control that force you to cancel for a covered reason, such as medical emergencies, death, severe weather, terror attacks, financial default, layoffs, involuntary work reassignments, and more. Details vary by policy, so be sure to check your policy’s fine print.

Here is a closer look at the various ways trip cancellation insurance can cover you:

• Illness, injury, death, or Covid-19
• Hurricanes, severe weather, and natural disasters
• Jury duty or other legal obligations
• Work-related cancellations
• Employment layoff
• Government shutdowns

Cancel for Illness, Injury, or Death

Cancel for Medical Reasons covers cancellations due to an unforeseen medical emergency, like serious illness, injury, or death.

Coverage generally includes cancellations due to:

• Injury, illness, or hospitalization to you or a travel companion, including Covid-19 or another covered pandemic-related virus
• Severe injury or illness of an immediate family member that requires your care
• Death to a non-traveling immediate family member

This benefit applies to very serious illnesses that prevent you from starting your trip and won’t cover:

• The cost of medical care, emergency evacuations, or other out-of-pocket expenses. These fall under mid-trip benefits and are covered by travel medical insurance instead.
• An injury or illness that was present at the time a policy was purchased, unless your policy offers a Pre-existing Medical Condition waiver
• An illness or injury that was not treated or seen by a physician
• A medical cancellation that is not supported by a doctor’s note or written opinion of a medical professional
• A family member’s condition that does not require your presence or care

Cancel for Hurricanes, Severe Weather, & Natural Disasters

Severe Weather & Natural Disaster coverage can trigger cancellation protection and reimburse you if adverse weather makes travel impossible or causes an extended delay. Generally, weather has to be severe enough to be classified as a natural disaster, cause destruction, major closures, or a complete cessation of services to be sufficient enough for cancelling your trip altogether.

However, some more flexible plans can cover any cancellation by a common carrier due to severe weather conditions. Certain travel insurance policies may even cover obstructions to public roadways or public transportation that prevent you from getting to your common carrier.

You may generally be covered for:

• Floods
• Wildfires
• Earthquakes
• Volcanoes
• Hurricanes
• Cyclones
• Tornadoes
• Blizzards and winter storms

One important caveat: Coverage only applies to unforeseen events and excludes named storms and forecasted weather events that occurred before you bought your policy.

Cancel for Covid-19

Cancellation for Covid-19 Sickness is a covered reason under nearly every Trip Cancellation and Trip Interruption policy and is treated as any other illness these days.

If you contract Covid-19 before your scheduled departure date, you can be reimbursed for non-refundable expenses. You must be healthy when you purchase a policy. You’ll need to show proof that you contracted Covid-19 and had to cancel your trip. A PCR test with the date, results, and doctor’s information is typically sufficient.

Cancel for Terrorism

Cancellation coverage can also extend to terrorism and reimburse you if an act of terrorism takes place at your destination before your trip starts, causing you to cancel your travel plans altogether.

Typically, the following conditions must be met for Terrorism Cancellation coverage to apply:

• The attack must occur in or near a city listed on your itinerary
• The attack must occur within 7-30 days of your scheduled departure date
• There have been no other terrorist incidents in the same city within a specified period of time prior to your departure date, usually 90 days

Most insurance companies require the event to be a certified act of terrorism by the U.S. Department of State, the Secretary of the Treasury, or the federal government where the attack occurred. Some providers won’t consider an event an act of terrorism unless there is loss of life or major property damage. Plans may also require a Level 4 “Do Not Travel” advisory from the U.S. Department of State.

Cancel for Jury Duty or Other Legal Obligations

Most policies let you cancel your trip and receive reimbursement if you are forced to attend legal summonings, including:

• Jury duty
• A court subpoena
• Other mandatory legal obligations

To file a claim, you’ll need to supply an official copy of your subpoena or summons. Note, however, that this coverage generally does not apply to legal obligations arising from illegal acts, or drug or alcohol offenses.

Cancel due to Financial Default

Some policies offer Financial Default coverage that reimburses you if your travel supplier unexpectedly stops operating due to financial insolvency.

This coverage is a time-sensitive benefit, which means it’s usually only available for purchase within 10-21 days after making the initial deposit for your trip, so we recommend purchasing travel insurance as soon as possible to obtain stronger coverage.

Important note: Bankruptcy, where travel services may continue to be offered by the provider, is not the same as financial default. Read the terms of your policy closely, since it may only cover financial default but not cover bankruptcies.

Cancellations Due to Work Reasons

Cancellation for Work Reasons covers travel cancellations due to unforeseen work requirements, like:

• Revoked PTO
• Required work attendance during your trip
• Mandatory schedule changes

This coverage does not apply to foreseen or voluntary work changes, and not all travel insurance plans include this benefit, so we recommend making sure it’s mentioned as a covered reason in your plan’s trip cancellation terms if it’s important to you. While rarer, some plans may also offer this benefit as an optional add-on.

Cancellations Due to Being Laid Off

Employment Layoff Insurance, also known as Job Loss Insurance, covers cancellations due to involuntary layoff or termination of employment before your trip.

Covered cancellations due to a layoff come with eligibility requirements that may include:

• Full-time employment: Coverage does not usually apply to seasonal, part-time, self-employed, or short-term employees.
• Minimum employment length: Typically between one to three years.
• No fault: Coverage only applies to terminations due to things like mass layoffs or budget cuts, not due to job performance.
• Waiting period: Terminations are only covered after a set amount of days after your policy’s effective date, typically 14-30 days.

This is another benefit that’s not included in every plan, so be sure to check your plan’s details.

Cancellations Due to a Government Shutdown

Some policies may cover cancelled flights due to a government shutdown in very limited situations. An airline or other common carrier must report that travel was cancelled for a “mechanical issue”, “operational issue”, or use similar phrasing for issues due to staffing shortages and furloughs. Otherwise, you may need to rely on a CFAR upgrade for cancellations due to government shutdowns.

However, standard cancellation coverage won’t cover missed flights due to long TSA lines or cancelling your flight simply to avoid the hassle of flying.

Note: This is another time-sensitive benefit that requires you to purchase it before the event has been named or foreseen for coverage to apply. Otherwise, this can only be covered by CFAR insurance.

Cancellations Due to a Transportation Strike

Some policies can also cover travel cancellations due to strikes from a common carrier, including airline, air-traffic-control, and train strikes. For this coverage to apply, you must have purchased your policy before the strike became a foreseeable event. If the strike was announced before you purchased your policy, coverage won’t apply.

What Does Trip Cancellation Insurance Not Cover?

One of the most important exclusions to look out for with Trip Cancellation insurance is “foreseen events”.

Travel insurance won’t cover situations that were known, expected, or publicly announced before you purchased your policy. Additionally, every policy has a very strict list of covered reasons. If a reason isn’t explicitly mentioned, it may not be covered.

Common Trip Cancellation exclusions include:

• Refunding trips booked on points or credits
• Reimbursing you for refundable bookings (e.g., you get paid twice)
• Cancelling on a whim, change of plans, or schedule conflicts
• Being scared or worried about taking your trip
• Pregnancy, childbirth, and fertility treatments
• War, civil unrest, or military actions
• Foreseen events: a storm, government shutdown, or strike was already announced
• Self-inflicted injuries, such as intentional self-harm or substance abuse
• Voluntary job changes
• Death, illness, or injury of a pet that isn’t a service animal or someone who isn’t an immediate family member (e.g., spouse, cohabitant of more than 12 months, direct relative, in-law, aunt, uncle, niece, nephew, or a legal guardian)

Consider Adding Cancel For Any Reason (CFAR) Coverage

Cancel For Any Reason coverage is an optional add-on that will provide partial reimbursement for reasons typically excluded from standard cancellation coverage.

This add-on is available for roughly 36% of the plans on Squaremouth. Our online quote tool allows you to locate policies with CFAR coverage.

Consider adding cancel anytime travel insurance to your plan if there’s a high chance of cancelling for a non-covered reason. It’s a time-sensitive benefit, so be sure to purchase early.

How Much Is Trip Cancellation Insurance?

Travelers pay around $25 per day on average for a comprehensive travel insurance policy that includes Trip Cancellation coverage. According to our internal sales data from the past 12 months, the average premium for comprehensive travel insurance is $438 for an average trip lasting 14 days.

That said, premiums can vary widely depending on many factors, including:

• Trip cost
• Destination
• Age
• Trip length
• Types of coverages and limits
• State of residence
• When you purchase insurance

>> Learn how to calculate your trip cost

Should I Buy Trip Cancellation Insurance?

With the cost of travel on the rise, you may be tempted to forego trip cancellation protection to save a few dollars, but this is unwise.

Uncertainty for travel is high in 2026, due to the government shutdowns, geopolitical events, and growing jet fuel shortages. Meteorologists also predict a Super El Niño event that could cause more severe weather around the world and cause further travel disruptions.

According to our summer 2026 travel survey, 56% of Americans purchasing travel insurance are worried about trips getting cancelled or interrupted, and 85% say travel insurance is essential.

You should strongly consider insuring your trip if you fall into one of the following groups:

• Seniors and retirees: Seniors tend to spend the most on travel, and therefore, have the most to lose if a trip is cancelled.
• Cruise passengers: Cruises are switching to stricter cancellation policies post-pandemic, with non-refundable deposits and steeper penalties.
• Group tour travelers: Cancellations may depend on group coordination and factors outside your control.
• Travelers with elderly or ill family members: You may want trip cancellation coverage in case you need to cancel for a funeral or medical emergency.
• International travelers: International trips cost more and have a higher risk of disruption.
• Travelers booking “bucket list” or once-in-a-lifetime trips: It’s a good idea to protect the time and money spent on planning these trips.
• Those travelling during hurricane season or winter: These seasons have a high risk of weather-related cancellations. Even if you aren’t traveling in a hurricane-prone area, the entire flight network can be disrupted by delays and cancellations at major air hubs due to regional weather events.

When to Buy Trip Cancellation Insurance

You can purchase trip cancellation insurance up to a day before your scheduled departure, but we strongly recommend purchasing your policy as soon as possible after booking your trip. Many policies have time-sensitive benefits, like pre-existing condition and financial default coverage, that require you to purchase coverage within 14-21 days of your initial trip deposit.

Buying early can also help ensure broader protection. Once an illness, injury, or other disruption becomes known, it’s considered a “foreseeable event” and therefore excluded from coverage.

As mentioned, many policies let you increase your trip cost if you’re unsure about your final trip cost.

What Is the Best Trip Cancellation Insurance?

The plans offer the best travel insurance for trip cancellation. They’re the top three most popular plans for Trip Cancellation Insurance on Squaremouth due to the value and benefits offered:

IMG iTravelInsured Travel LX

This is our top-of-the-line plan for people who want the most cancellation coverage possible. It automatically includes CFAR coverage and covers the widest range of cancellation reasons.

• Trip cancellation: 100% of trip cost, up to $150,000/person
• Trip interruption: 150%
• Medical coverage: $500,000 Primary
• Medical evacuation: $1,000,000
• CFAR coverage: 75%

Travel Insured International FlexiPAX

This is a great choice for families, with free coverage for children under 18.

• Trip cancellation: 100% of trip cost, up to $25,000/person
• Trip interruption: 150%
• Medical coverage: $100,000 Primary
• Medical evacuation: $500,000
• CFAR coverage: 75% (optional)

Tin Leg Gold

Tin Leg Gold is Squaremouth’s overall top-selling travel insurance plan. It’s a well-rounded policy that balances cancellation protection and medical coverage with price.

• Trip cancellation: 100% of trip cost, up to $30,000/person
• Trip interruption: 150%
• Medical coverage: $500,000 Primary
• Medical evacuation: $500,000
• CFAR coverage: 75% (optional)

How to Buy Trip Cancellation Insurance

1. Calculate how much coverage you need. To get a quote, you need to know your total trip cost. Start by calculating major expenses like airfare, accommodations, and cruise bookings. Be sure to only include non-refundable expenses in your cost.
2. Determine what other benefits you need in your plan. Consider whether you’ll need other benefits like Emergency Medical, Medical Evacuation, and adventure sports coverage, as well as what amount of coverage you’ll need.
3. Compare plans. Use our quote form on Squaremouth to get a list of plans that contain all your required benefits and to compare quotes for your trip.
4. Balance affordability and coverage. Aim to find the best value for the money, but be sure to prioritize adequate coverage over lowest pricing.
5. Purchase your plan early. As mentioned, you should purchase coverage within 14-21 days of your first trip deposit to qualify for time-sensitive benefits.

Is Trip Cancellation Insurance Worth It?

Trip Cancellation Insurance is worth it if you need to protect an expensive vacation or your trip has the risk of disruption due to illness, airline, or weather-related issues. For a cost of around $31 per day, you can recover thousands of dollars in trip costs. If there’s a high chance of your trip getting cancelled or disrupted, you should strongly consider purchasing travel insurance.

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FAQs: Trip Cancellation Insurance

What Is the Difference Between Trip Cancellation and Trip Interruption Insurance?

Trip Cancellation insurance is a pre-departure benefit that covers 100% of your trip if you need to cancel it due to a covered reason. Trip Interruption insurance, on the other hand, is a post-departure benefit. It covers up to 150% of your trip costs, including your return ticket, if you need to end your trip early for a covered reason.

Does Trip Cancellation Insurance Cover Pre-existing Conditions?

Some trip cancellation policies will offer Pre-existing Condition waivers if you purchase your policy within a certain window (14-21 days) of your initial trip deposit.

Can I Buy Trip Cancellation Insurance Only Without Medical Insurance?

Yes, some policies offer Trip Cancellation insurance with no medical coverage for a slightly lower cost. Look for plans with a $0 limit for Emergency Medical and Medical Evacuation coverage when comparing plans on Squaremouth’s quote page.

Does Travel Cancellation Insurance Offer Refunds for Flight Credits?

No, you won’t get travel insurance for cancelled flights if you receive a flight credit. Flight credits are considered a refund, and flight cancellation insurance only covers non-refundable costs. If you want your travel insurance policy to refund your flight costs, you’ll need to turn down any flight credits that your airline offers.

What Is a Covered Reason for Trip Cancellation?

A “covered reason” for trip cancellation is a reason listed specifically in your travel insurance certificate that qualifies for Trip Cancellation benefits. Examples include severe weather, illness, death, or injury. If a scenario isn’t listed in this section, it’s likely not a covered reason.

Can I Buy Trip Cancellation Insurance After Booking?

Yes, you can buy Trip Cancellation Insurance after booking your trip. You can purchase coverage up to a day before your trip, though we recommend purchasing a policy as soon as possible to qualify for time-sensitive benefits and to take full advantage of your policy.

Does Credit Card Insurance Cover Trip cancellations?

Yes, many credit cards have Trip Cancellation coverage, such as the Chase Sapphire cards. However, coverage limits can be very low on some cards, and you generally won’t get other benefits like Emergency Medical insurance or Cancel For Any Reason (CFAR) coverage.

Can I Cancel Travel Insurance and Get a Refund?

Many Travel Cancellation policies, including plans on Squaremouth, offer a 10 to 15-day free look period. If you cancel your policy within this period, you can receive a full refund. Otherwise, Travel Cancellation insurance is non-refundable.

Does Travel Insurance Cover Cancellation Due to Illness?

Illness is a standard qualifying reason for Travel Cancellation coverage, but coverage depends on the circumstances of the illness. The illness must be medically documented and severe enough to prevent travel. Coverage generally only applies to you, your traveling companions, and your immediate relatives.

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Please be aware that coverage and eligibility requirements for this benefit differ by policy.